Profitability and Cost Management (PCM) got released during the OpenWorld in September 2016 as the software-as-a-service (SaaS) replacement for its on-premises Oracle Hyperion Profitability and Cost Management (HPCM) solution. PCM is a great tool to analyze costs, revenue and profitability. We often receive questions about the similarities and differences between PCM and HPCM, and the intent of this blog post is to provide a high-level response to these inquiries.
Overview
PCM is part of the EPM cloud suite solutions. The EPM cloud suite includes planning and profit management which contains the solution of EPB, and PCM. The cloud suite also includes complete financial close, which are FCC and AR. Meantime time, Narrative reporting and enterprise data management are part of the EPM cloud suite as well.
PCM Differentiators
When you log into the PCM application, the first thing you notice will be the EPM cloud interface.
Compared with the on-premises HPCM Workspace, PCM offers the more modern interface:
Some other critical PCM differences include:
- PCM Provides improved analysis functionality in the Intelligence cluster, including:
- Analysis Views
- Scatter Analyses
- Profit Curves
- Trace Allocations
- Queries
- Key Performance Indicators (KPIs)
- Supports graphical reporting and dashboards to more easily analyze corporate performance
- Integrates with Data Management (DM) for enhanced data integration and governance
- Integrate with Financial Reporting Web Studio for improved financial and managerial reporting and analysis
- Provides application management and metadata loads
- Offers simple calculation execution
- Integrates with EPM Automate for better system administration
- Does not require infrastructure investment because this is a cloud-based service offering
- Use Planning connection to connect to other EPM solutions
HPCM Unique Capabilities
Even with all the great PCM advantages, HPCM offers some unique capabilities that aren’t available in the cloud. HPCM provides a “Standard Profitability” application type, which is used for highly complex allocation models, especially when indirect costs play a major role. HPCM leverages the Essbase calculation database (BSO) and reporting database (ASO). In the meantime, HPCM provides a “Detailed Profitability” application type, which is used for the cases that the allocation logic is straightforward, but the metadata and data are huge. This application type provides a single allocation process to analyze profit and cost. Finally, HPCM has the “Management Ledger” application type. It is used for medium allocation complexity, and high metadata and data granularity allocation models. Since it is an on-prem application, customers control the server side. They will have more flexibility to create multiple applications.
Back to the cloud side, PCM combines these 3 application types. In reality, an allocation process supports the whole planning and budgeting process. A single allocation application is efficient enough to achieve most business requirements.
The HPCM unique functions including:
- Provides a standard profitability application type
- Provides a detailed profitability application type
- Provides a management ledger application type
- Enables multiple applications
- Connects to EPMA
- Uses Essbase as a metadata source
- Offers the Essbase Administration Services Console
PCM Considerations and Limitations
PCM is a cloud software as a service (SAAS) product. As we mentioned earlier, it does not require any infrastructure investment and Oracle takes care of the server and patching service for customers. In order to provide a better user and admin experience, also meet most real-world business requirements, Oracle sets some basic limitations for cloud applications.
Some of the limitations of PCMCS include:
- Two environments per service instance
- Test
- Production
- Each environment provides 150GB storage
- Each environment can only create one application
- Dimension limitations
- 14 dimensions in total
- 1 to 4 POV dimensions (Period, Year, Scenario, and Version)
- 1 to 11 business dimensions (such as Account, Entity, Product, etc.)
- 2 system dimensions (Balance and Rule dimensions)
- Each dimension can have maximum 100k members
- Each attribute dimension can have maximum 500 members
- Each application can have maximum 300k members
- Rule limitations
- Each application can have maximum 5000 Rules
- Each application can have maximum 10 billion potential cells of source range
- Each application can have maximum 1 trillion potential cells of destination
- 1GB maximum file size per upload
Another consideration when evaluating PCM is related to the database configuration. PCM offers a relational repository and an Oracle Essbase multidimensional database.
- Relational repository
By leveraging the relational repository, customers can set up the basic allocation dimensionality and define proper allocation logic to support the general planning requirements. It also provides embedded application management and metadata load process. The intelligence and dashboards, such as Profit Curves, KPI’s and Analysis Views will be available for the relational repository as well. The relational repository provides the following key functionalities:
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- Business dimensions
- POV dimensions
- Rules
- Rules sets
- Intelligence and dashboard
- Essbase
PCM uses Essbase as database which provides the multi-dimension functionality. To support high metadata and data granularity, PCM only connects to Essbase reporting database (ASO). With that being said, the Essbase query scripts, MDX will be used occasionally. Essbase provides the following major items for PCM:
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- Only provide reporting database (ASO)
- Store cost data
- Store revenue data
- Calculation scripts functionality
The PCM application maintains the model design and dimensions, and uses Financial Reporting Web Studio, Dashboards, Smart View and out of the box (OOTB) traceability maps to perform reporting and analysis.
I hope you enjoyed this comparison of cloud PCM and on-prem HPCM. See you next time.