Profitability & Cost Management Software Vendors

 

PCS Consulting maintains an intelligence knowledge base of the top Profitability & Costing software solutions and vendors. This software intelligence and vast experience implementing these software solutions, allow PCS Consulting to provide clients with critical insight for making informed profitability software selection decisions and provide the implementation assistance expertise required for success. Learn about our Software Intelligence Briefings. Software Briefings


Profitability & Cost Management Software Vendors

A brief introduction of the most prominent Profitability & Cost Management software vendors is provided below. To obtain a software briefing for one or more of these vendors Go To Briefings

SAP currently has two profitability costing solutions.  Profitability & Cost Management (PCM) and Profitability and Performance Management (PaPM).  Mainstream Maintenance for PCM is scheduled to end December 31, 2020.  SAP obtained PCM with the acquisition of BusinessObjects in 2008, who had acquired it from ALG Software in 2006, who originally developed and sold the solution since 1990.  The product’s multi-dimensional calculation engine was and still is unique among the activity-based costing software solutions.

While SAP has not announced a PCM replacement upgrade path, it has introduced a new product called Profitability and Performance Management (PaPM), which is effectively SAP’s replacement of PCM.  PaPM was previously named Performance Management for Financial Services (FS-PER) and Cost and Revenue Allocation for Financial Products before that.  As the names suggest, it was originally targeted to financial services companies with a focus on funds transfer pricing, insurance valuations, and integration with SAP’s Finance and Risk Data Platform.  In late 2018 the tool was refocused and renamed to target a broader range of customers beyond the financial services industry.

PaPM was built specifically to run natively on SAP’s powerful HANA in-memory platform, first released in 2010 as the recommended database for all SAP applications.  HANA provides the ability for PaPM to easily process huge volumes of data, and perform intensive allocation and calculation rules at lightning speed.  Implementations of PCM and other ABC software require performing huge volume transaction level calculations outside of the ABC modeling engine in other tools.  PaPM provides ability to calculate and trace costs and profitability to the lowest cost object level regardless of model size.

No predefined allocation levels, rules or structures are provided and users need to define their own structures and cost calculation paths.  In this way, the tool is very flexible, minimizing frequent workarounds of the older PCM.  However this may cause more time to be required for design and build a PaPM solution.  SAP has developed sample content, covering different industry use cases to help as getting started examples. PaPM is more of an application development tool to accomplish different use cases than it is a packaged costing application. PaPM also leverages the user experience principles of SAP Fiori with the goal to make building, maintaining, and using PaPM as easy as possible. SAP says built-in integration functions and capabilities to integrate with other solutions provide for integration without heavy coding or IT involvement.  A lofty goal.

PaPM is still a relatively immature product and may lack some of the features of other more mature solutions in this space, but the power that HANA provides significant opportunity.  Especially for organizations with large and complex calculation rules. to.

SAS Acquired ABC Technologies in 2002, who had OROS, then the top selling ABC software. The current product is SAS Cost and Profitability Management (CPM) and continues to provide the proven cost modeling capabilities, plus many enhancements over the years.

The latest versions of CPM provide improved flexibility and performance.  The basic cost architecture remains the same from the Oros days, with some key improvements such as unlimited user defined dimensionality, up to 10 user defined cost modules, and running on the SAS calculation engine. CPM is often sold as a bundled solution along with complimentary SAS Profitability Management, SAS Visual Analytics (utilizing SAS LASR Analytic Serve) and SAS Data Integration studio (an ETL tool) products. Pricing is annual subscription based. Leveraging the SAS technology, Profitability Management provides the ability to leverage cost rates calculated in CPM to calculate large volumes of transaction data, for example at the customer account or transaction level.

Oracle has two costing and profitability applications. Hyperion Profitability and Cost Management (HPCM) is the on-premises product and Profitability and Cost Management Cloud Services (PCMCS) is their cloud product. HPCM was announced in July 2008. Eight years later the cloud solution (PCMCS) was announced as a software-as-a-service (SaaS).  Both products were built ground up on the Essbase platform, Oracle’s multidimensional OLAP (Online Analytical Processing) server for multidimensional calculation, modeling, reporting and analysis, and are part of Oracle's Enterprise Performance Management (EPM) on-premises and cloud suites.  It is very different than Oracle’s previous ABC products, in that it is more a platform to build costing and profitability solutions to meet each customers unique needs.  No or limited predefined allocation methodology rules are provided and users need to specifically define their own dimensions and allocation rules logic.  In this way, the tool is very flexible, but may require more time to properly design and build versus the traditional activity-based modeling tools.

While both products are based on the same Essbase platform, they are not exactly the same.  PCMCS takes advantage of the standard EPM Cloud user interface that is more current, while the older HPCM has the older look and feel interface.  The cloud solution has nicer graphical reporting and dashboards and may provide some integration advantages as an Oracle EPM Cloud solution.  However, the HPCM solution provides some advance modeling capabilities that the cloud solution doesn’t and the cloud solution has limits on dimensionality and rules that might impact very large or more complex models. The newer PCMCS is sold as a monthly service based on number of users.  The HPCM solution has a traditional perpetual licensing pricing model.

With the 2008 HPCM release, Oracle retired two “old” Activity Based Costing solutions Oracle ABM and HBM, which they obtained through acquisitions. Oracle ABM (originally developed in the 80s and known as Activa) was acquired from Price Waterhouse in 1998. Hyperion Business Modeling (HBM) came with the 2007 Hyperion acquisition (which came from Hyperion's acquisition of Sapling in 1999). The PeopleSoft ABM, which came with the PeopleSoft acquisition in 2004, has also been retired.

CostPerform is provided by QPR CostControl BV, headquartered in Vianen, Netherlands with offices and alliance partners throughout Europe, North America, Australia, Asia, Africa and South America.  The company is dedicated to their single costing & profitability solution “CostPerform”.  Beginning as a cost management consulting firm successfully implementing the QPR ABM solution for several years, in 2001 the firm purchased the ABC solution from QPR Software Plc, a Finish software company to form QPR CostControl BV.  The US sales office and support is in Baltimore, MD.

CostPerform supports all of the activity based costing functions and features expected with modern cost modeling software. Some unique features include; robust multi-level resource and activity cost assignments for waterfall and shared-service cost allocations, strong resource capacity consumption modeling, flexible cost assignments from and to folder levels in hierarchical structures, and visual business process modeling of the model structure and calculated results. The “Big Data” layer provides ability to support higher volume cost object models.  The ETL (Extract, Transform and Load) feature provides flexible and easy to use functionality to automate the collection of source data, straightforward transformations and data mapping and load into CostPerform without or limited IT support. It also provides capability to convert model results from CostPerform into appropriate formats for external data warehouses and reporting systems.  It is not intended to be a full functioning ETL tool like typically used by IT. It provides the appropriate level of functionality for business cost model owners to be more self-sufficient with less reliance on IT, and for them to be more efficient with less dependence on source data manipulation in excel.

While the CostPerform solution does not have as modern a user interface as the other vendors on our list, it is a proven solution with an impressive user base of over 500 customers currently using the solution, mostly in Europe and now growing in the U.S., Australia and beyond. Most if not all the other vendors on this list do not have that many current customers using their costing solution.  It is also very reasonably priced, offering most of the functions, features and technology provided by the larger vendors for a fraction of their price. The solution is sold globally through its Netherlands, U.S., and Australia offices, and through distribution partners in the rest of Europe, Asia, Africa and South America.

Prodacapo has been a Stockholm Sweden based software vendor providing activity-based costing software across multiple industries and countries around the world since 1994. The costing has many strong features with like capabilities provided by the top vendors on this list, with an attractive price point. While costing is the primary focus, the suite of products also provide Scorecard, Business Planning and Process Management solutions. The North American office is located in Seattle, WA.

In 2017 Prodacapo was acquired by FCG Finnish Consulting Group and merged with FCG Datawell to form the FCG Prodacapo Group.  FCG is a Finish consultancy headquartered in Helsinki, Finland, providing consultancy services for organizational development predominately in the public sector. The company is owned by Kuntaliitto Holding Ltd in Finland. FCG acquired Datawell in 2015.  Datawell specializes in providing software for the health care industry.  The merger provides ability to provide the Prodacapo costing solution to Datawell customers and Datawell customers to Prodacapo.

myABC/M is one of the newest players in the North American ABC market. The Brazilian based company, with offices now also in the U.S. and Mexico, was founded in 1993 as a reseller of the ABC Technologies' Oros software in Brazil until ABC Technologies was acquired by SAS in 2002. MyABC/M is pretty much a clone of Oros (now SAS CPM) software, with several functional and ease of use enhancements, but also some of the things we never liked about Oros. For example, the three modules (resource, activity and cost objects) structure, lack of bi-directional web-based user interface, single period centric, and limited "what-if" and planning capabilities. However, the primary ABC functionality is provided at an attractive price point, compared to the other major vendors. Cloud and on premise purchase options.

3C Software provides its single solution ImpactECS platform for cost and profitability management.  The company was founded in 1989 with the initial costing system for the pulp and paper industry.  The solution has evolved to serving multiple industries including the semiconductors and electronics, chemicals and pharmaceuticals, distribution, food and beverage, forest products, metals, project-based manufacturing, plastics, rubber, glass, pulp and paper, textiles and apparel industries.

ImpactECS is a proprietary platform to build costing and profitability, planning and budgeting, pricing, etc. solutions customized to meet the specific needs of each customer. It is more like an application development tool for costing and profitability systems then it is a packaged application.  No predefined allocation calculation methodologies are provided.  The model builder must prescribe the specific math calculations for each allocation result from a set of math equation options. The user interface to manage resources, activities and cost objects data typically prescribed and set with most other costing applications does not exist with ImpactECS. They are designed and created as part of the implementation project within the tools' model development functions and features.

The ImpactECS approach provides great flexibility with ability to incorporate unique user interfaces and functionality that is not in traditional activity-based costing applications.  That flexibility comes with the cost to design, build and maintain the specific logic to be used for the costing and profitability calculations.

Acorn Systems was acquired by Ignite Technologies in July 2014.  Ignite, who was purchased by Versata the year prior, specializes in Video Content Delivery and Human Capital Management.  After the Acorn acquisition Ignite significantly reduced the Acorn development and support staff, eliminating a large portion of Acorn expertise.  The specialty of the Acorn solution is providing activity costing at the transaction record level with activity equations that recognize how different services, products, customers and channels consume activities differently.

 
 
 

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