Cost Estimation and Data Mining Tool Determines the Cost of New Products or Services

You’d like to think that the cost of your products and services is nailed down in the form of negotiated contracts with suppliers, but that isn’t always the case:

If you’re re-engineering a product using parts of different dimensions to those you use today, you’ll need to know if it’s financially viable to do so.

If you’re submitting a sales proposal for a significant contract or customer win, you should know what elements will drive your pricing.

What those two examples have in common is ‘cost estimation’ – having the ability to estimate cost in seconds, with confidence is pretty powerful stuff. I came across a SaaS platform recently, easyKost. It’s a global company with its roots in France, and in itself it is a simple concept.

Co-founders Pierre Rougier and Lionel Muller were also co-founders of Keplar, a consulting firm that specialises in operational margin optimisation including, innovation, purchasing and supply chain. It partnered with easyKost (according to a press release) in 2016 to “propose a complete set of costing solutions and services which help their clients grow their business and improve their operating margin through significantly improved rapid cost modeling.”

“EasyKost estimates the price of a new product or service in less than 5 seconds by analyzing the historical data of our customers. Based on our proprietary powerful algorithm, we offer a disruptive approach to product costing activities. The usability of our solution is significantly enhanced with our user friendly and dynamic graphic interface”- said Jean-Marc Pichery, COO.

At its core, it is a cost-estimation and data mining tool, but to understand that it takes its points of reference from your own historic data sources (multiple sources) and uses a combination of algorithms, AI and machine learning to produce the estimated cost, giving a much greater degree of confidence in the estimation.

There’s a reverse costing element to the platform too; you can enter your budget cost and the system works out what characteristics of your product (in the example I saw, it was a screw) you can change to align with your budget price. It also identifies the cost-driving characteristics on your product and which global regions are more competitive for the product in question.

We have not seen a demo of the product, so cannot attest to its speed and effectiveness, but I see such a platform being really useful in the automotive, aerospace, manufacturing, construction and retail sectors. Nice to see a procurement technology that can add value on the sales side too.

If you would like to check it out for yourself, there are a couple of short YouTube videos that give a flavour of what the technology can do.

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