Organizational management is a vast and complex field, and the diversity of software available to support operations is remarkable. Each type of software plays a unique role, serving specific needs. Therefore, MyABCM stands out as a specialized solution that excels in addressing specific challenges of cost and profitability management in companies, not as a substitute for BI tools, despite having embedded BI to benefit companies without a BI solution.
While BI generates dashboards that merely compile and display information obtained from other software and data sources, MyABCM processes and transforms information cubes, cross-referencing and calculating from various sources to then generate new data that can serve as a basis for cost and profitability management, providing vital reports for decision-making. Thus, it plays a more strategic role, offering features that enable understanding the actual costs of the business across different dimensions, such as channels, customers, activities, and specific products, etc.
In other words, the goal here is to minimize the use of cost allocations throughout the organization and, consequently, eliminate the terrible distortions linked to these allocations that can be very dangerous for companies, impacting various managerial decisions on pricing, sales commissions, discounts, etc.
A BI, on the other hand, seeks existing data in the organization such as Accounting Accounts, Production and Billing Volumes, periods, and others, and presents this information in an organized and didactic way. However, note that here there is no transformation of information, and therefore, the allocations continue to occur. For this reason, Prof. Bala Balachandran from Kellogg University in the United States often comments that “these increasingly sophisticated BI systems allow extremely misguided decisions to be made very simply and quickly!” which is a danger!
Let’s see an example:
Imagine a factory that produces various products from the same raw material: plastic. The ERP records data such as the value of input purchases, payroll, accounting entries, production and billing volumes by product and customer. Potentially, we have here a flawed cost model, since allocations were used for the costs of support areas and, although we know precisely the billing customer by customer, this information is of little use when we want to understand the result customer by customer, after all, we do not have information on the “costs of serving”, we did not allocate marketing and sales expenses for these customers and channels and we do not even know to which areas the IT expenses are being allocated in the organization.
MyABCM, in turn, allows for a sophisticated modeling of costs and profitability, which essentially consists of designing a structure where the various accounting accounts of the company are allocated using allocation criteria that make sense and respect a cause-and-effect relationship through multiple levels until reaching the dimensions necessary for the client to manage their company. These dimensions may include Products, Customers, Channels, Markets, Projects, Businesses, Segments, etc., and also include the costs of support areas. In this way, we have a complete snapshot of costs with full traceability that allows managers to make the best business decisions based on facts.
And if you already have or intend to use a BI, do not worry. MyABCM integrates with all of them.
MyABCM stands out for its ease in the process of construction and data loading in the cost modeling structure. While BI software generally requires complex and extensive configurations, MyABCM is a ready-made calculation engine that requires only parameterization, without the need for development, simplifying implementation.
MyABCM has a robust calculation engine, optimized specifically for the requirements of cost and profitability management. Designed with a specialized distribution mechanism, it is capable of in-memory calculations, optimizing appraisal time.
The scenario-building function allows users to create and explore various hypotheses, providing a broader view of the financial implications of different situations.
Within the scope of scenario simulations, we have another important differentiator of MyABCM: push and pull simulations. The push simulation involves the sequential propagation of changes in variables throughout the model, to understand what the final result would be if some variables were changed. The pull simulation, on the other hand, goes back to identify the initial conditions necessary to achieve specific results, identifying bottlenecks and capacity constraints, and acting as a true sophisticated planning component in organizations.
This approach provides a deeper insight into the financial implications of different scenarios, allowing not only to anticipate changes but also to retroactively understand the factors that led to certain outcomes. This capability goes beyond the possibilities of BI’s, which do not perform such detailed and sophisticated analyses.
MyABCM offers detailed cost monitoring in different contexts, including Actual, Budgeted, Standard, and Goal, providing a holistic view of financial performance.
MyABCM is the only solution on the market that manages reciprocal costs in all modules and with optimized performance at the computer processor instruction level, an essential resource in interdependent organizational environments. By allowing allocations between sectors that share services and resources, MyABCM offers a more accurate and realistic view of costs.
As an example, imagine here that the IT area works for HR and also for Production; already the HR area also works for IT and for Production; note that between HR and IT we have a simultaneous cost allocation that must be calculated in order to avoid distortions in costs – MyABCM deals with this transparently and with extreme agility.
This process goes beyond the cost calculation tools offered by BI’s. The ability to handle interdependencies between sectors, essential for the financial health of the business, is not contemplated in BI’s, precisely because it does not align with their objectives.
BI software is powerful in generating reports. However, they depend on other tools to generate advanced calculations for cost management. MyABCM, on the other hand, offers the ability to create specific reports, tailored to the needs of cost and profitability management of the organization. This allows for a more in-depth and targeted analysis, optimizing the decision-making process.
Moreover, MyABCM offers integrations with other systems, such as ERPs and BI’s themselves, facilitating use in conjunction with various tools employed in the organization.
Ultimately, when choosing between BI software and a specialized solution like MyABCM, organizations should consider their specific needs for cost and profitability management. With its focused approach, advanced functionalities, and ability to provide precise insights, MyABCM stands out as a strategic choice for companies seeking more accurate and efficient financial management.
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