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Session

Session

Achieving Accuracy and Performance – Combining Bottom-up and Top-down Approaches to Costing

Oracle Cloud PCM is a powerful and flexible application that is used for many purposes in the domain of costing and profitability. As users mature in their use of cost information, in certain industries there is a need to obtain very granular values such as orders and order lines in distribution, patient encounters in healthcare, and transactions in financial services. In such cases, recipients of cost allocations behave less like hierarchal dimensions that change slowly over time and more like data that is dynamic and ephemeral.

For example, in a single month, a retailer or distributor could have tens of thousands of orders associated with hundreds of thousands of order lines. These orders and order lines would disappear forever in the following month and be replaced with all new ones. As such points, the number of dimension members moves beyond the established allowable limits of PCM and there needs to be a transition from a purely “bottom-up” model which calculates the allocated cost at each dimension member based on one or multiple drivers, to one which uses a simplified “top down” rate times volume method across a high volume of cost targets.

In this session we will review:
• The trade-off between detail and accuracy
• Methodology choices: time-driven versus driver-rate based
• Splitting up the “heavy lifting” to optimized methods and volume
• Where to delineate the approaches

This session is for anyone who wants to better understand use of PCM to meet business requests for highly detailed costing and profitability. Whereas nobody would suggest that a significant business decision would or should be made about a product or service offering based on a single bank transaction, healthcare encounter, or retail order, one could argue that costs can meaningfully vary at these levels of detail, and it is through their aggregation at actionable levels that decisions can be meaningfully made.

The audience can include admins, developers, and power users. But it also can include consumers of cost and profitability information, and those who have been charged with building such applications.
Summit 5
June 28th 10:15 AM
June 28th 11:15 AM
Profitability
General Profitability & Cost Management
Tips, Techniques, and Tuning
Financial Systems Analyst / Administrator, Essbase Developer / Consultant, EPM Jack of all Trades Consultant

About the speaker:

Douglas D. Paul
Manager, PCMCS
Alithya

Douglas D. Paul is a manager with Alithya (www.alithya.com), an enterprise solutions and strategy consulting firm based in the U.S. and Canada. His experience includes positions in finance software, consulting services, and corporate roles in controllership and IT.

Release 1.0