Using Margin, Profitability, and Cost Management to Dodge Bullets - Oracle’s New PCM and IMP Apps
This week the earnings reports are beginning to show signs of economic recovery, and the stock markets are rewarding those companies that were able to show signs of either improvement in profits, or results less bad than expected. Like Neo in The Matrix, dodging bullets for these companies meant cutting costs quickly, adjusting their operations to match the drop-off in demand, and improving their cash positions.
If you want to stay on top, be prepared to deal with more bullets.
Here’s how using the latest tools from Oracle.
- Profitability and Cost Management - Continue to trim costs; if you’ve already found the low hanging fruit you should consider using some advanced analytic tools that go way beyond ERP reports and Excel spreadsheets and focus on the drivers of profitability and cost to help you answer questions including;
- What is the profitability of each customer and product?
- Who are the most profitable?
- Which products have higher margins?
- How much does it cost to serve customers?
- What is the total cost of producing the products?
- Margin Planning - the ability to predictably manage margins and the cost of goods sold (COGS) can have a direct and significant impact on the bottom line. Understanding how changes to COGS elements such as materials, labor, and transportation costs can impact margins, managers and analysts in finance and operations are able to proactively manage margins in the face of extreme variability related to cost and revenue drivers. For example:
- How will the anticipated shifts in demand across products and regions affect revenues and margins?
- What will be the impact of variability in material costs on product costs and margins?
- How does a proposed product allocation scheme impact our revenues and margins? Is it in line with customer service targets?
- What feasible choices are available for us to make up a projected revenue shortfall?
- If we decide to prune non-performing SKUs, what is the inventory exposure at global facilities?
Both Oracle’s Profitability and Cost Management (PCM) and Integrated Margin Planning (IMP) applications were designed specifically to deploy quickly using pre-defined models that help enterprises address these issues. They are both new in Oracle’s portfolio and are what I consider to be some of their most exciting!
For more information on either of these applications, please feel free to reach out to me.
Subscribe to the comments for this post
1 Trackback(s)