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SAP Profitability and Performance Management – the next PCM tool – Overview and Comparison

INTRODUCTION:

With the urge to get updated and provide the best solution in market, to enhance with the current business strategy and processes, SAP has also made some advancement in the field of Profitability Calculation and its corresponding Management tools. Speaking of which comes SAP Profitability and Cost Management (PCM).

 

MAIN ISSUE:

Streaming down in the mid of 2020, SAP has announced that its tool SAP PCM will no longer be available after 2020 and claims SAP PAPM (Profitability and Performance Management) as its future road map. In this Blog post, we will have a walkthrough on the overview of SAP PAPM and its features and a comparison between SAP PCM and SAP PAPM.

 

SOLUTION:

SAP PAPM is a not a brand new tool but it is a rebranding of SAP’s existing tool – Performance Management for Financial services (previously known as FS-PER) which focuses on Financial Services Industry delivering complex solutions for Fund based Pricing. However, PAPM provides a new set of integrated performance management applications.  It is a complete end to end analytical tool that can take data from different places, perform allocations and calculations, and also analyses data outputs. It also has the ability to run simulations and predictions, intelligently or manually.

The three main core functionalities of PAPM are:

  • Calculation engine: It can act as a planning tool as it can write back to systems (for instance BW) and can perform complex calculations and process large volumes of data. However, its standalone feature would be direct/indirect allocations.
  • Data Aggregator: It can be utilized to connect many source systems (Both SAP or non – SAP). Data replication can be done if needed even though it is not necessary.
  • Data Analysis: It also acts as a data analyst tool for getting data insights and provides traceability of data quality for identification of errors.

Standalone features of PAPM:

  1. On-premise and Cloud deployment available
  2. Data connectivity of source systems (SAP and non-SAP)
  3. Performs complex calculations and allocations for business having complicated cost allocations drivers
  4. Can write back to a BW database
  5. Provides a platform for data visualization
  6. Built only on HANA platform which is considered as SAP’s powerful database
  7. Performs What-if analysis on important business drivers for profitability analysis and decision making
  8. Purely Browser based and Web only frontend

With the new branding of the tool, PAPM focuses on expanding its content base not only on Finance related sectors but also a variety of industries like  Automotives, Transportation and Logistics, Oil and Gas, Healthcare, Aviation and other Public sectors.

Comparison of PCM and PAPM:

  • PCM was acquired from Business Objects whereas PAPM is a re-branding of an existing SAP tool – SAP FS-PER
  • The latest version available in PCM is PCM 10.0 SP12 and for PAPM it is PAPM 3.0 SP07
  • Configuration and administrator setup guide is available for both
  • Both are available for installation in SAP marketplace
  • SAP support for PCM to end by 2020 (small scale users) whereas SAP promotes PAPM as a road-map for SAP PCM
  • We need to create Universe and Book Manager for Data visualization but PAPM provides various set of integration for front-end data visualisation
  • PCM – On-premise solution for maximum utilization whereas PAPM has both cloud or On-premise deployment

 

CONCLUSION:

Thus, PAPM is becoming a powerful tool with its future iterations bringing improved stability and integrations with several other systems. It will be a perfect Analytical tool for allocation of costs for a business model which will compliment SAC in the mere future.  Hope from this Blog post you would have got an overview on SAP PAPM. Feel free to share your views or ideas and share your thoughts for the same.

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