Signal ABB's FP&A-embedded team built a gross-profit-per-headcount metric to steer cost behavior

Summary

Deloitte highlights ABB Group, the electrification and automation manufacturer, as a model of disciplined cost management. Global CFO Timo Ihamuotila explains that the company's dedicated cost team sits within its financial planning and analysis function. The team searches for efficiency and profitability opportunities across ABB's network of businesses. One of its creations is a gross profitability metric that measures how much gross profit is produced for each unit of headcount. Ihamuotila calls this metric a very powerful tool for encouraging the right quality of revenue, cost and profit behavior throughout the network. He adds that building rigor around cost measures has placed productivity and efficiency at the heart of ABB's culture.