In the next few minutes, we will explore the main functionality of allocations in

Board. With allocations in Board, we can determine the true

profitability of any product, service, or customer by

relying on very accurate cost attribution.

These attributions are visible and transparent to all users, helping us

understand how costs, especially non-controllable and indirect

costs, are consumed across entities, products, and departments.

This process is usually done in a simulative way, allowing us to simulate

different rule structures, methodologies, and drivers to assess their

impact on profitability. From the main Board application homepage for

allocations, we are directed to an example of a process workflow.

This workflow shows how we start by importing data to be allocated, whether it

is actual, budget, or forecast data.

Before running allocations, we need to define some drivers.

These can be statistical, financial, or calculated drivers.

Once drivers are set, we can run the allocations and, if needed, run

diagnostics to ensure all information is properly accounted

for. After this, we can report and compare multiple versions of

structures and rules before sending the data for manager review.

Looking at the reporting capabilities, we can start with a simple example of an

income statement, where we see results before and after allocations.

For example, we might see that fixed expenses have decreased by around

$300,000, and this amount has been allocated to other

expenses. You can use Board's drill-down functionality to understand the

allocation role impacting your business.

Here we see the impact comes from a departmental cost center

allocation. If you need more details, you can use the drill anywhere

capabilities to examine the details of the allocations.

In this case, we see that within the rule, there are two lines showing the

impact on our business. We have received expenses from both shared

services and corporate governance allocations.

We can further drill down to understand the cost centers, entities, and

senders responsible for these allocations.

Before allocations, all data for the specific account, other

expenses, was marked as not available and not assigned to any cost

center. After the allocation, data is distributed to field marketing,

content distribution, and other sales and marketing cost centers.

This demonstrates the full traceability of the Board allocation engine.

All of this comes to life through business-owned configuration of different rules

in Board. In fact, you'll have the ability to create multiple

different rules. These rules can include product allocations,

allocations across entities, allocations for HR purposes,

reciprocal allocations, overhead allocations, or

departmental allocations like the one we are looking at in this example.

Within each rule, there are multiple details or lines.

For example, in the departmental allocation rule, we are allocating

from shared services to sales and marketing, and also performing some

central function allocations. We are also including corporate governance

allocations. For each allocation rule, you can define the sequence

in which allocation details and lines are processed.

All allocation lines can be processed simultaneously, or you can set a

sequence so that the result of the first allocation is used as input for the second

allocation. Each allocation detail comes with a driver well

defined. In this example, we are using a statistical driver, but it

is also possible to use a financial driver such as revenue.

If the driver is not fully complete, the system will highlight this in

yellow, making it easy to identify where the problem is.

Before running these allocations, you can also verify senders and receivers

of each allocation line. For instance, we are allocating to the account,

legal entity, and cost center dimension.

By clicking on the indicator, you can see that we are allocating from general and

administrative expenses to other operating expenses.

In a similar way, by clicking on the cost center dimension, you can see that

the allocation goes from general services to various cost

centers, such as field marketing, sales, events, and

competitive intelligence. At the core of allocations in Board is the

concept of drivers, senders, and receivers.

By filtering specifically for the shared services allocation, it becomes

possible to see who the sender is and who the receivers are.

For example, if we want to allocate from general services, we select the

sender cost center. If we need to allocate, we can allocate to

multiple cost centers, or we can choose to allocate only to a

specific department by filtering on the receiver.

Let's say we want to allocate costs from general services to sales and marketing.

We simply select the cost centers we want to allocate to.

By clicking on run allocations, we can immediately check the results of the

allocation. For example, in this scenario, since we filtered on a

specific allocation, we can see that we allocated to one account, to

one legal entity, and to four cost centers.

If we remove the initial filters we applied, we can see the results of the

allocations before and after. This ensures that nothing is lost in

the allocation process between these two rules.

You can review the allocations by nature or by individual account.

Alternatively, you can change our view at any time.

For example, you might want to look at the cost center instead of the group

account. By swapping the view, we see that for general services,

general services has been written off by 186, and this amount

has been allocated to other cost centers.

Similarly, for the second rule, corporate governance, our local expenses

have been written off by around $112,000 and then

allocated down to other cost centers.

We have full traceability into where the senders are, who the receivers

are, and the related amounts. All of this translates into a full

profitability analysis. We can analyze not just at the cost center

level, but also at the product and service level, or any other dimension.

In this case, we are looking at profitability and margin analysis by product

family. Here we drill down to the individual product level to

understand the impact on contribution margin based on different allocation

rules and steps. It is clear that after allocations, the

networking product family contributes the most to revenue and profitability.

The chart below shows that revenue is mostly concentrated on a few products.

While the contribution margin is more stable and spread more evenly across

different products. Profitability remains steady, while

revenue is highly concentrated in just a few products.

To recap, regarding allocations in Board, all allocations are

multidimensional. We can allocate across any dimension, including the

legal entity dimension. Any methodology can be used, whether

directory class allocations, driver-based allocations, parallel

or sequential allocations, and even reciprocal allocations are

supported. Allocations can be based on both financial and statistical

drivers, and all allocations are scenario based.

This means we can evaluate the impact of sequencing rules in different ways,

using different drivers and methodologies.

And of course, all of this is managed in a very traceable and auditable way,

really thanks to the data lineage capabilities that we have available in Board.