Service economics in DigitalCore
Service economics is the discipline of understanding how services make or lose money. It pulls revenue, cost, performance, and capacity into one view per engagement, per service, and across the portfolio.
For the wider concept, see the public guides:
This page is about how DigitalCore puts the discipline into practice.
What you get
- Real-time P&L per engagement. Revenue, cost, and margin tracked monthly with plan and actual values. The view updates as you record data, not weeks later.
- Automatic cost attribution. Hours times the right rate become labour cost on the right finance line, with no spreadsheet formulas to maintain.
- Penalty detection from contracts. When a KPI crosses a contract limit, the penalty is calculated and posted as cost.
- Modelling before you commit. Build response options for a decision and compare projected impact, then approve and apply the chosen option.
The four pillars in practice
- Revenue attribution. Each finance line categorises revenue by type. Combined with delivery attribution, you can answer “how much revenue from this engagement?” and “which customer or unit is responsible for it?”
- Cost visibility. Direct, indirect, and labour cost, each tagged to a delivery party. Labour cost is automatic; external cost is entered during check‑in. Every entry is traceable.
- Margin analysis. With revenue and cost tracked monthly, margins stay current:
- Gross margin = revenue minus cost of goods sold.
- Contribution margin = gross minus allocated operating expense.
- Net margin = the bottom line after all attributed cost.
Why this is not a spreadsheet
- No fragile formulas. Hours always become the right cost, on the right line, at the right rate.
- Domains are connected. A change in capacity flows to finance. A missed term in performance posts a cost. There are no separate tabs to reconcile.
- No month‑end surprise. Variance is visible the moment actuals are recorded.
Related
- Engagements: the unit where P&L is tracked.
- Data domains: the four pillars in detail.
- Automatic costs and penalties: how the connections work.