Oracle has announced the launch of the Oracle Profitability and Cost management Cloud (PCMCS). This solution was originally released in September this year. Oracle has since issued monthly improvements. This is a purpose built solution for finance executives. It gives them an understanding of what drives profitability in their organisations using the data they hold.
The challenge of understanding cost and revenue
This is a cloud-based solution that allows organisations to extract data from their ERP solutions. Data covering revenues and their underlying costs can be rapidly analysed. Customers can identify which specific customers, products, regions and sales channels provide the best and worst profitability. Using this information business leaders can analyse the differences between spending profiles that are addressable. Alternatively do they need to look at another option such as cost reduction.
For example the analysis might indicate the cost of sale to a specific customer is far higher than others customers, or that delivery costs are the issue. Identifying whether delivery charges need amendment because specific customers are benefiting from the average profitability of a product line. Costs, revenues and operational systems are often fragmented across data silos. Oracle is using the cloud to bring that data into a single location. This allows Oracle to use its powerful database engine to analyse and provide insights that are not possible with fragmented on-premises solutions.
Hari Sankar, group vice president of enterprise performance management at Oracle commented: “What you don’t know about where your business is making and losing money can really hurt you. In today’s high-paced and increasingly competitive global business climate, it’s essential that your organization focuses resources and cash on the right priorities. PCMCS enables organizations to easily identify their profit winners and address inefficiencies, ultimately improving business agility and profitable revenue growth, while minimizing costs.”
So how does PCMCS it work?
PCMCS provides a data modelling capability using data extracted from ERP systems. Those systems include Oracle E-Business Suite Database, PeopleSoft, Oracle Fusion, JD Edwards, 3rd party General Ledgers, Oracle Cloud Planning and Budgeting Cloud as well asOracle Financial Consolidation and Close Cloud. Oracle has yet to say which third party ledger systems this is integrated with or how that data is extracted. PCMSC delivers pre-built reports that include including profit curves, scatter plots, and traceability. There is also the capability of designing new reports and detailed financial modelling.
PCMCS offers some interesting use cases across various industries. Within financial services bansk can analyse cost allocations and calculate costs down to product, consumer and branch. They could use additional data sets to identify the difference in profitability of these between rural and urban settings. Trend analysis can provide better information about the longevity of products across multiple industries as certain costs increase and revenues fall.
Oracle sees applications for PCMCS across other industries such as healthcare, education, telecommunication, transportation, utilities and public services. This solution provides an overlay to existing ERP solutions that can be used without the need for on-premises infrastructure investment.
Mike Killeen, senior vice president at Edgewater Ranzal, an Oracle partner commented: “The Oracle Profitability and Cost Management Cloud Service strikes the perfect balance between configurability and ease-of-use, and is a welcome addition to Oracle’s market-leading family of cloud-based Enterprise Performance Management applications. It’s the ideal solution for a wide range of allocation based business processes, including management reporting, product and customer profitability, shared service costing and chargebacks, and operational transfer pricing.”
End of on-premises support for Financial Reporting Web Studio
In the latest release Oracle announced the end of support for Financial Reporting Studio desktop client in May 2017. Interestingly the language used is the “tentative” end of support. This means that customers who do not wish to use the cloud-based version have the opportunity to make the case for its continuance. Oracle do not intend to distribute the desktop client after May 2017. Customers with concerns or questions can contact Oracle through the feedback option. They recommend that customers transition to the Financial Reporting Web Studio at the earliest opportunity.