We Do Not Know Which Products Make Money
in Energy & Utilities Services

The short answer

Every utility contractor has a service line that everyone assumes is profitable, and it is usually the one being subsidised by master service agreements. The version of this question that applies to utility contractors is not the generic one. Margin improvement requires shifting revenue to automation and controls but that reduces overhead line work and operating profit unless utilization exceeds 79 percent which outage scheduling prevents — so an answer that ignores 18.0 will be confidently wrong. The analysis has to start from 71.4 and 23 rather than from revenue.

Line profitability is genuinely hard because most costs are shared across regulated utility asset projects, and the usual allocation by revenue quietly guarantees the answer. Allocating overhead in proportion to the 248.6 million dollars in project revenue makes high-revenue overhead line work look expensive and automation and controls look efficient, which is precisely backwards when automation reduces craft utilisation.

A workable approach allocates only what is genuinely traceable to a master service agreement and leaves the rest unallocated. You end up with contribution by line and one honest pool of shared cost, which is far more useful than a fully-absorbed number that nobody trusts when outage windows and backlog affect the same crews.

The result is usually uncomfortable. In most portfolios a minority of lines carries the whole thing, and at least one long-standing overhead line has been losing money for years with everyone assuming otherwise unless utilisation exceeds the level outage scheduling prevents.

How to tell this is actually your problem

These three together are the signature. One on its own usually points somewhere else.

✓ Product profitability is quoted as a company-wide gross margin that mixes project write-downs across all master service agreements.
✓ Nobody has discontinued a service line even though backlog keeps shifting toward automation and controls.
✓ Two people give different answers about the same line when one cites craft utilisation and the other cites outage windows.

The move that usually makes it worse. Fully absorbing overhead into service lines, which produces a precise number built on an arbitrary rule and gets defended because it looks rigorous.

Who this is for — and who it is not

It is for you if you run or finance a utility contractor and product profitability is quoted as a company-wide gross margin. It is the situation where the numbers are available but nobody has put them in an order that produces a decision.

It is not for you if Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.

What this looks like when the analysis is actually run

Below is an excerpt from a real run of this analysis on a utility contractor. It is a sample profile rather than a customer, and it is unedited engine output — this is the format you get, on your own numbers.

The subject is Verrick Energy Services, a sample company profile used for testing rather than a customer — 248.6 million dollars revenue from regulated utility asset projects.

This is one move out of a full analysis. Read a complete report — every page, no email required.

What the engine does with this question

This question routes to Matrix Strategy, one of 29 engagements the platform runs. For utility contractors it works through 18.0, 71.4, 23 and 6.6, then produces the sequence rather than a list of options — which move first, what it funds, and the observation that would say the sequence is wrong.

You watch the analysis get built before paying anything. Read a complete report here if you would rather see the depth first.

Questions people ask about this

Do I need activity-based costing?

Almost never for the decision at hand. Traceable costs plus an unallocated pool gets you the ranking, and the ranking is what you act on. Full ABC is a project that frequently outlives the decision that prompted it.

What about products that support others?

Say so explicitly and price the support. A loss-making line that genuinely pulls profitable revenue is a marketing cost with a name, which is a fine thing to be — as long as somebody decided it.

How often should this be redone?

Annually, and after any significant mix change. The ranking is more stable than the numbers, so the exercise gets cheaper each time.

Is this different in energy & utilities services than in other industries?

Materially, yes. Margin improvement requires shifting revenue to automation and controls but that reduces overhead line work and operating profit unless utilization exceeds 79 percent which outage scheduling prevents — which changes both the diagnosis and the order of the fixes. The metrics that decide it here are 18.0, 71.4, 23, and an answer built on industry-general benchmarks will usually point at the wrong one first.

What data do I need before this analysis is worth running for a utility contractor?

Less than most people expect. Your last twelve months of revenue and cost split the way you already split it, plus whatever you hold on 18.0 and 71.4. The analysis is explicit about what it is assuming where your data stops, which is more useful than waiting for numbers you may never have.

When is Percision the wrong tool?

Percision is the wrong tool if you already know the answer and only need execution capacity, or if the business is pre-revenue — then the constraint is evidence about the market, not analysis of your own figures. Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library. Also wrong if you need facilitation, politics, or someone to sit with a lender or buyer. Those are human jobs.

Does Percision replace a lawyer, tax advisor, auditor, or AI implementation team?

Percision is not a lawyer, tax advisor, auditor, licensed appraiser, clinical or regulatory filer, or an AI implementation shop. It does not do HR casework, creative-only brand work, or impersonate a named consulting firm. It is a strategy analysis engine — not a template library.