In my private equity days, we consistently urged management teams to assess profitability using a fully allocated cost analysis on a unit basis. This unit was typically a factory or a large enough division to manually allocate G&A and other fixed costs. The management team would often download factory level P&Ls into Excel spreadsheets and then manually allocate corporate expenses into each factory.
A key limitation of this approach was the inherent subjectivity in allocating fixed costs as well as the level at which the books were managed. For example, how much sales expense should one plant bear compared to another? How much corporate overhead was truly utilized by a specific factory?
The goal of these cost allocations was to understand true unit economics, where a unit bore the full expenses associated with the revenue it earned. For example, one could have a high gross margin product that has a very expensive sales process, such that its fully allocated economics are less profitable than a lower margin product that sells itself. While these analyses offered value, they relied on arbitrary estimates and could not easily go below the level of the bookkeeping. Today, however, advancements in data tracking, connected devices, and greater computational power have removed the need for manual estimation.
The device in my pocket has more processing power than my computer in the late 2000s, and, more importantly, similar devices can be built into or connected to assets providing a granular, real-time data stream on the assets.
One of the features of ZetiOS currently under development is asset-level P&Ls, representing a significant leap beyond the analyses I encountered 15 years ago. At Zeti, a core principle is that robust data is essential for informed decision-making. ZetiOS directly interfaces with hard assets, capturing any data the device is capable of reporting. Using this data and pre-defined allocation rules, revenue and expenses can be attributed directly at the individual asset level and then seamlessly consolidated to a portfolio, a group of assets, or any logical aggregation.
We apply this same approach across both mobile assets, such as fleet vehicles, and fixed assets, including charging infrastructure, battery systems and other energy assets. By integrating telematics and operational data directly into financial workflows, ZetiOS provides clear visibility at the asset level, supporting more precise performance measurement and consistent portfolio-level analysis as asset bases scale.
The result is real-time, actionable profitability data that eliminates the subjectivity of estimates and empowers our clients with unprecedented clarity. As asset portfolios grow in size and complexity, this level of transparency becomes increasingly critical.