HPCM

Need for Cost & Profitability Management

In spite of vast amounts of data residing in the companies’ software systems, managers and executives are constantly challenged to answer questions around cost and profitability management such as:

Which customers, products or channels are profitable – and which ones are incurring losses?
What are the cost-to-serve customers/segments?
How to provide superior customer service at a lower cost?
What is the optimal price for key customers/products/segments/channels?
How to allocate the cost of shared services to individual departments?

Lack of detailed visibility and tracking of costs across various processes (eg: order to cash etc.) fundamentally inhibits an organization’s ability to make informed decisions and improve profitability. While cost and profitability management are typically on every manager’s radar, very few firms monitor and account for it at the necessary level of detail. Fixed costs, write-offs, user time spent, resource time spent etc. are only a subset of the numerous types of sub-costs that contribute to the overall cost of a project or process.

Activity-Based Costing (ABC) for Improving Profitability and Cost Management

Many leading companies are turning to activity-based costing analysis to better manage and track costs, with the goal of improving their performance and profitability. Unfortunately, most of these organizations are unable to implement or take full advantage of such a system and the rich cost information that it provides. Key reasons include poorly designed solutions, readiness of the organization to model and execute the ABC framework, inadequate data collection techniques, and lack of ability to scale. As a result, ABC has only had marginal adoption and success in enabling cost and profitability management.

Profitability and Cost Management – Syntelli Helps Move Beyond Spreadsheets

Oracle Hyperion Profitability and Cost Management (HPCM) provides actionable insights into costs and profitability. It drives business performance by discovering the drivers of cost and profitability and empowering users to improve resource alignment. Oracle Hyperion Profitability and Cost Management provides a complete understanding of all revenue and cost values and offers a flexible allocations platform which includes activity-based costing (ABC) and time estimation. In addition, traceability maps and audit trail capabilities provide new levels of transparency for greater confidence in the analysis and the reported results.

Notable benefits of a well designed and implemented cost and profitability management system include:

Accurate allocation of direct and indirect costs across processes, resources and activities that enable profitability measurements for customers, products, channels, regions etc.
Optimal pricing for products and services
Effective segmentation of customers
Optimal resource allocation and alignment for profitable and high value-add activities

Syntelli Solutions can help firms move beyond spreadsheets into implementing a robust and flexible cost and profitability management solution. Syntelli can leverage its value-based methodology and deep expertise around multi-dimensional analysis and change management to establish a technology and process framework that is embraced by both business & IT users. For existing Essbase and Planning customers, Syntelli can leverage the common foundation and extend it further with seamless integration to HPCM.