What’s the deal about Profitability and Cost Management?

Hyperion traditionally holds strength in Essbase reporting, planning & budgeting and Consolidation. But, in recent times, Oracle with its aggressive marketing strategy is launching number of decision making systems.

Let’s enlighten ourselves with one of Oracle’s high profile product ‘Hyperion Profitability and Cost Management’.

We all got used to implementing Hyperion planning for customers budgeting and forecasting needs. It got me over as to where does HPCM fit into this. It is not an alternative to Hyperion Planning; neither does it make much sense implementing HPCM without Planning. The only ideal way, according to me is co-existence of Planning and HPCM.

Now, the big question arises, what does HPCM do? In simplest of terms HPCM does allocations. If you compare it with the way we do allocations in Planning, then its altogether different ball game in HPCM.

Allocations in HPCM are completely driven by Business User’s. Business users create allocation models, select drivers, allocation type, and assignments in workspace interface and deploy HPCM application. The underlying Essbase application and calculation scripts are generated on the fly. Business User even calculates database in workspace interface, which then executes the generated calculation scripts in a precise sequence. The most appealing feature I found is tracing allocations graphically. This is one of the USP of Profitability and Cost Management. One BSO application and database is created where complex allocation scripts are executed and one ASO application is created where data is moved from BSO databases post calculation and is then used for reporting purpose. All this happens in real quick time. Believe me, all this on the fly requires real lot of scripting in the backyard.

Now, where does it score over allocations done in Hyperion Planning?

To start with, Allocations in HPCM are driven by end users. Tracing allocations graphically is the feature which will attract the End User most. Business Users love to have least dependency on the technical and support team, which this product promotes very well, as all is controlled by Business users. Complex allocations once written in Planning are hard to change by. Once, the Implementation team leaves and support team is in place and the allocation logics change, then it’s an uphill for the support team and will take decent amount of effort and time. And in today’s world, one vendor does the implementation and the other support. So, for the support team to incorporate the changes, they need to have crystal clear understanding of the entire application in terms of requirement and system technicalities. This rarely is the case.

For organizations where allocation logics are very complex involving number of stages and their drivers keep on changing, HPCM is the best fit.

From an architecture standpoint, where an end to end budgeting and forecasting solution is to be implemented with Essbase, Planning and HPCM licenses in hand, I would recommend following architecture. Again, this can have its own course based on specific requirements.