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SAP Profitability and Performance Management and SAP Profitability and Cost Management: notes from the regular user

Hello, a few words about me: I have started my work with SAP Profitability and Cost Management in 2010. Since then, I have worked with more than 20 SAP Profitability and Cost Management implementations (some of them were long term).

Currently (during the last few years) I have completely transferred working with new SAP Profitability and Performance Management, so I am in the good position to compare the two solutions.

Here I will try to share my experience as a long time SAP Profitability and Cost Management consultant and business analyst, who is now working with new SAP Profitability and Performance Management.

SAP Profitability and Performance Management (known as PaPM) is a new generation SAP HANA solution for complex calculations, allocations, and simulations.

It is co-developed by msg and SAP to be a successor to the old SAP’s ABC solution SAP Profitability and Cost Management (known as PCM), which now is not supported anymore.

Here I will try to describe SAP Profitability and Performance Management’s advantages over SAP Profitability and Cost Management and share my experience as a long time SAP Profitability and Cost Management user and analyst.

First, I will cover the main advantages of the new solution from the point of someone who worked with SAP Profitability and Cost Management extensively, then I will list the disadvantages (spoiler: you will not find many) and then I will give a summary what to expect when working with SAP Profitability and Performance Management.

SAP Profitability and Performance Management advantages over SAP Profitability and Cost Management

Flexibility

When working with SAP Profitability and Cost Management, we had limitations of fixed dimension and value tables, which were predefined. All the data had to be forced into those tables or transformed outside the model (often in Microsoft Access or Excel).

SAP Profitability and Performance Management has no limitations in terms of data structures. It can process unlimited number of tables and dimensions (fields), which simplifies the design of the model significantly. So, no more Data Bridge when connecting to CSV files.

Different way of modelling

Data in SAP Profitability and Performance Management is manipulated and transformed using functions, where each function is one (or more if needed) step of data modification. This gives a consistent way of creating dataflows in the solution.

SAP Profitability and Cost Management had a mix of allocation engine and scripting language (it was called Rules – written in Visual Basic script) where some really advanced functionality could be implemented, however these rules might be really hard to follow, and accordingly, to maintain or to update.

SAP Profitability and Performance Management functions offer a more granular approach, where the input, output and configuration of the function can be set up and checked more easily, this way enabling efficient maintenance.

In addition, in SAP Profitability and Performance Management the results of every step are displayed after each function (a table is created). This way it is much easier to check the results, trace and understand the model.

Moreover, it has a visual modeler, where all the connections are shown visually – with arrows displaying the dataflows between different functions. Comparing to SAP Profitability and Cost Management, this offers an unprecedented clarity in understanding the model, enabling to follow the logic step-by-step, checking the results in between.

Performance

Few words about the performance. SAP Profitability and Performance Management is miles ahead of SAP Profitability and Cost Management, due its platform being executed on SAP HANA.

Source%3A%20msg%20global%20presentation

Source: msg global presentation

SAP HANA is a much more robust new generation SAP platform, so gone are these times when users needed to restart SAP Profitability and Cost Management Services due some development inconsistency or poorly written PCM Rule. Also, it ties with the next point – simulation.

Simulation

Even though SAP Profitability and Cost Management could execute simulations, usually, a special model with its own logic had to be built for this purpose. SAP Profitability and Performance Management is much more useful in this area as well, due to its better performance and rich functionality (such as parameters and processes, enabling to immediately see the differences within the whole transformation process).

Workflow

The reporting and user workflow is the another additional area where SAP Profitability and Performance Management is better than SAP Profitability and Cost Management. Because of SAP Fiori, users now can conveniently view their reports and update their data in a much more convenient way, including entering data and approving the steps.

SAP Profitability and Performance Management disadvantages compared to SAP Profitability and Cost Management

Because it is a new generation product, it was built to better in most ways, however few points might stand out. The most obvious one is – it is unfamiliar at the beginning. Yes, it is a completely new framework, so any prior SAP Profitability and Cost Management user will have to learn the solution mechanics from the beginning. Bear in mind that your ABC knowledge will remain immensely valuable, only the technical steps how to implement and maintain it will have to be learned.

Another minor point could be related to hierarchies. In SAP Profitability and Cost Management hierarchies were the main staple of a dimension. Now they are hidden under field configuration and even though functionality remains, this might look more confusing from the first glance.

My experience and summary

I have several remarks about the process of moving from SAP Profitability and Cost Management to SAP Profitability and Performance Management. It brought a lot of excitement that old SAP Profitability and Cost Management’s quirks will be fixed (if corporate software solutions can be exciting). This is a new and cutting-edge technology, which has a totally different feel of working, compared to a more than decade old SAP Profitability and Cost Management technology (the last SAP Profitability and Cost Management update was released in 2015 and last full version was in 2011).

Yes, you will have to learn to master it, but the process is intuitive enough and you will soon be solving your own puzzles. For this you definitely can leverage on your SAP Profitability and Cost Management’s allocation and calculation functional knowledge.

But most importantly, it can bring even more answers in a more efficient way about your business problems. If you are passionate about this – this will make your work much easier.

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