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.
Learn more about how MyABCM can help your organization. Fill out the form below and talk to our experts!
There are various system options for cost calculation in SAP, varying in value and features.
In this article, we will introduce a Brazilian alternative that not only integrates seamlessly with SAP but also specializes in cost and profitability calculation, offering numerous advantages for your organization.
For companies looking to optimize cost calculation in SAP, MyABCM stands out as a specialized option with many attractive features. Available on the SAP Store, the system integrates smoothly with SAP and offers a series of functionalities that allow companies to get a snapshot of their cost structures, simulate scenarios, and make more confident decisions.
MyABCM offers a series of advantages for companies wanting to efficiently calculate costs and profitability:
While many available solutions may represent a significant cost, MyABCM is more affordable, delivering valuable and efficient features. This makes it an attractive option for companies of various sizes, enhancing the return on investment.
MyABCM is notable for its ability to provide a high degree of cost traceability. This is essential for companies that want to understand the origin of their expenses, optimize pricing, comprehend the role of each product, service, and customer to the organization, and make informed decisions based on accurate data.
The ability to gain insights in less time is invaluable for companies that need to make agile decisions in a dynamic business environment. One of the major benefits of MyABCM is the speed of implementation, calculations, and information availability, combined with smooth data integration between SAP and its system.
MyABCM is used by large companies in more than 50 countries to calculate costs in SAP, covering a wide variety of sectors, including banking, industrial, governmental, healthcare, and many more. This global adoption is a confirmation of its effectiveness in meeting the needs of organizations of all sizes and in different segments, with flexible tools that adapt to the specifics of each business.
For companies looking for specialized solutions to enable integrated cost management within the SAP ecosystem, MyABCM stands out for being accessible and offering functionalities specifically developed to optimize the identification and calculation of costs, with excellent cost-effectiveness. Make this strategic decision: fill out the form below and speak with our experts.
Cost management is an essential but often complex discipline that challenges both students and business administration professors. Going beyond theory and showing how the process is done in the reality of an organization may not be an easy task, but it adds value to teaching and helps prepare students for the realities of the job market.
Therefore, we have developed our academic program with the aim of promoting good practices in cost management and helping educational institutions prepare their students for professional life. See what Professor Alex, who uses MyABCM at Universidad Católica Boliviana San Pablo Regional La Paz, has to say.
“Over the past few years, I have been using MyABCM to teach cost management to my students. This program has completely transformed the way I present and analyze cost information in the classroom.”
One of the key features of MyABCM is the ability to create customized cost models that simulate real businesses. Professor Alex emphasizes, “I can configure different costing systems, such as job order costing, process costing, and activity-based costing. This allows students to experiment with different costing strategies and understand the financial impact of each decision.”
MyABCM stands out for its intuitive interface and ease of use, even for students with little experience. The Professor emphasizes, “The platform generates automated reports and charts that facilitate the analysis of results. This helps students develop critical thinking skills and interpretation of accounting data.”
In summary, MyABCM has significantly improved the effectiveness of Professor Alex’s classes. He highlights, “It allows students to learn by doing, rather than just reading texts and abstract theories. I would definitely recommend this innovative software to any cost accounting lecturer looking to make their classes more interactive and engaging.”
Professor Alex’s testimonial highlights the transformative impact of MyABCM on cost accounting teaching. By providing a practical and interactive experience, our platform not only simplifies complex concepts but also inspires critical thinking and prepares students for the challenges of the professional world. Together, we are raising the standard of cost management teaching, empowering the next generation of financial professionals.
Entel, a leading technology and telecommunications company, is transforming its cost management with the assistance of MyABCM. The organization, with operations in Chile and Peru, is renowned for its more than 20 million mobile subscribers and an extensive fiber optic infrastructure spanning approximately 11,000 kilometers, ensuring the continuity of interurban and international communications in both countries.
With the growing expansion of its services, technologies, and coverage areas in recent years, Entel has faced significant challenges. Managing an increasingly vast volume of cost information became essential, as well as providing an integrated and agile view of this data for relevant departments and decision-makers.
In response to this need, the company sought a solution capable of optimizing cost management and enhancing the traceability of cost information across its various activities.
The solution came in the form of MyABCM, chosen by Entel for meeting its specific needs. Firstly, it offered the ability to trace costs to the most granular levels, providing a detailed view of cost sources in all company operations, linking them to relevant service revenues and offering a precise visualization of the organization’s cost structure.
Furthermore, the tool provided users with the autonomy to explore and use its functionalities. This reduced dependence on external support and facilitated integration with other technologies used by the organization.
Another benefit of MyABCM was the agility in consolidating data and generating reports. With it, Entel accelerated the processing of analyses and data availability, making access to information faster and more efficient. This provided a clear and immediate view of costs, enabling more informed and agile decision-making.
MyABCM also brought greater transparency and reliability to the obtained data. The solution eliminated dependence on spreadsheets and ensured the integrity of cost information, essential for effective management.
By centralizing cost information and reducing the time needed for analysis issuance, Entel gained greater autonomy in operating its cost model and obtaining analyses. With the support of MyABCM, the company is charting a successful path in cost management and making strategic decisions for the future of telecommunications in its coverage region.
Universidad Alberto Hurtado is a public, non-profit institution of higher education with its primary campus in Santiago, Chile. Member of AUSJAL and FLACSI, two large groups consisting of over 200 educational organizations in Latin America, the university has great prestige and offers undergraduate and graduate programs in more than 20 areas of disciplinary areas in the humanities and exact sciences, as well as exchange programs.
Throughout its structure, the institution employs around 500 teachers and serves a community of more than 6 thousand students across its multiple faculties located on two campuses. Confronted with the challenge of providing quality education by effectively managing the resources received from its benefactors, Universidad Alberto Hurtado was looking for a solution to identify the primary cost drivers and allocate investments to strategic areas of the institution.
MyABCM arrives at Universidad Alberto Hurtado at a very special moment. With a structured strategic plan consisting of 13 goals to be achieved by 2030, the institution has chosen our solutions to manage resource allocation and facilitate the achievement of its plans. The goals for the near future include topics in the educational and administrative spheres, such as:
In this context, comprehending the financial collection process and which of your activities consume the most resources “is the initial step in balancing investment distribution and achieving all the strategic objectives within the designated timeframe.
Using MyABCM, Universidad Alberto Hurtado will be able to have a clear view of how resources are utilized in each teaching and research activity. In this way, it can confidently make critical decisions and strategic allocations, investing in resource-needy areas that provide growth potential for the institution and its activities.
It will be possible, for example, to understand how much investment is needed to achieve the goals of new students and campus expansion and to eliminate or adjust possible deficit activities to reallocate resources to them and obtain better results. These resources are expected to support the institution in providing high-quality education while expanding its operations into essential areas.
Providing sanitation and electricity to hundreds of thousands of people is no simple task. But it is the mission that Radees has taken on in Morocco, serving several communities with urban infrastructure solutions essential to the quality of human life.
Responsible for the distribution of drinking water and energy, Radees has just signed a contract to use the MyABCM solution in its cost and profitability management. Assisting in the software implementation process, the renowned consulting and auditing company BDO will be a strategic partner in the project.
With not only a corporate but a social commitment to provide quality drinking water and energy to over 300,000 people, the organization needed a tool to visualize the costs associated with managing miles of infrastructure equipment. Therefore, MyABCM is the chosen software to visualize the multiple sources of costs and the possible impacts of making decisions before subjecting hundreds of thousands of people to them.
The version of the software selected to serve the company offers features for flexible and intuitive multidimensional modeling with a relatively low implementation time. The system will allow allocations to be made through clear visual representations and with the application of business rules at various levels of complexity to allocate values from sources to destinations.
The organization will also benefit from advanced cost-tracking solutions that control resource consumption and pass-through to customers, as well as model summaries that allow potential distortions to be identified quickly and corrected before they damage business results.
To learn more about the solutions that serve Radees and other large companies distributed in more than 50 countries, contact us! Use the form below.
Samara Lima e Andrade
Captain Intendant
Head of the Production Division of the Pirassununga Aircraft Farm
This case study aims to present how the Pirassununga Aeronautical Farm (FAYS), a Military Organization based at the Air Force Academy (AFA), employed cost analysis as a beacon for the optimization of management and public spending. The entire project aimed to meet the organizational demand of maturing public management and had as its scope the knowledge of the historical unit cost of assets produced in the fiscal year 2019. The analysis used the ABC (Activity Based Costing) method to prepare the report and sought to serve as a subsidy to assist management in making more assertive decisions to improve public spending.
Founded in 1942, FAYS has an area of 6,502 hectares in the State of São Paulo. It is a Military Organization of the Brazilian Air Force, whose mission is the productive occupation of the lands of the Pirassununga Air Force Garrison with agricultural activities, which result in the production of food products sold internally and externally to the organization, according to the Strategic Planning in force.
Public opinion has become increasingly demanding as to the efficiency of public management and the optimization and improvement of public spending, culminating in the strengthening of the cost culture as a promising solution to achieve these goals. In this context, to meet the organizational demand for knowledge of the historical unit cost of assets produced by the Treasury, FAYS has engaged in a survey of the costs of processes and macro-processes developed within the OM, studying the possibilities of tracking indirect costs, to produce useful information to assist management.
The first decision to be made for the preparation of the report was what will be the focus of the cost accumulation system, considering that it can occur either by project or by activity. Project costs must be accumulated by order, and are those related to the provision of services or production of goods linked to specific projects, with scheduled start and end dates; whereas activity costs must be accumulated by process, and refer to activities of a typical nature, which occur continuously. In the case of the FAYS project, the accumulation system by process was applied, setting as the analysis scope date of the Plant Production Unit the period from 06/01/2018 to 05/31/2019 and as the scope date of the Animal and Industrial Production Unit the period from 01/01/2019 to 12/31/2019.
Considering that, unlike the legal practices in the private sector, the choice of the public sector costing method is not restrictive, it was necessary to choose which costing method would be used in the analysis. Taking into consideration that previous FAYS projects have already used the Activity Based Costing method, the ABC method was the most favorable for the execution of this project.
With the costing method defined, the organizational structure of FAYS was analyzed and it was established that the work would be dedicated to the analysis of the primary processes of the entire organization, these being considered those essential for the fulfillment of the institutional mission, i.e., the processes that relate directly to the farm’s production complex, which is divided into three Production Units: Plant, Animal and Industrial. Along with these three units, the commercial aspect of the mission, which is the distribution of goods produced or processed on the farm, makes commercial activities also included under the list of primary processes. For the other non-primary processes, such as personnel management and infrastructure activities, the costs were registered as expenses.
Under the optics of this approach, it became essential, to ensure the continuity of the engagement in the Cost Accounting area with the desired fluidity, the acquisition of a software that could optimize the work required for the project. In this search, a temporary license of the MyABCM software was hired.
As recommended by the Cost Information Manual of the Federal Government (MIC), it is from the development of their own modeling that organizations begin to advance in the cost culture. In this sense, to optimize the analyses and understand the logic of the calculations to be performed, it became necessary to elaborate cost flowcharts (with cost sub-centers) that reflected the interrelationship between the activities that comprised the processes of the FAYS Productive Complex in the referenced scope.
Once the Cost Sub-Centers that reflect the consumption of resources by activities were known and their interrelation understood, it became necessary to calculate the monetary values cumulatively spent in the processes to calculate the unit cost of the objects of interest.
Therefore, the following order of priority was considered for the allocation of costs to the activities and objects of interest: direct allocation (when there is an objective identification of the sacrifice of resources for the development of an activity or an activity for the delivery of a product); tracing (when a cause and effect relationship is sought through the use of drivers); and apportionment (a more arbitrary criterion that should be avoided from the management point of view).
After completing the preliminary steps, the desired result was obtained by processing the application itself. This has the parameter of calculating the Unit Cost by dividing the costs that were accumulated in the allocations, by the “Volume Entered” of each verification object, i.e., by the total quantity of units produced during the period considered.
In this context, to optimize the managerial analyses, “triggers” were created along the cost modeling to enable a certain roll of results based on the same input. Thus, it was decided to name the different compositions to improve the understanding of the coming analyses, which are Basic Cost, Budgeted Cost, Production Cost and Cost Price.
Basic Cost:
Comprised of the consumption of materials used in production, and the settlement of services applied in production activities.
Budgeted Cost:
Comprised by the consumption of materials used in production; the settlement of services applied in productive activities; and the depreciation of permanent assets allocated to productive sectors in the asset controls of SILOMS (Integrated System of Logistics of Material and Services).
Production Cost:
Composed by the consumption of materials used in production; the settlement of services used in productive activities; the depreciation of permanent material allocated to productive sectors in SILOMS; and the labor allocated in productive sectors in SIGPES (Personnel Management Information System).
Its main application is the optimization of the Organization’s horizontal vision, providing an opportunity for process analysis and improvement, using activity performance improvement, and it can also be used as a benchmark for pricing items intended for external sale and the Reimbursable Section.
Cost Price:
Composed of the consumption of materials used in production; the settlement of services applied in production activities; the depreciation of permanent material allocated to productive sectors in the asset controls of SILOMS; the military manpower allocated to productive sectors in SIGPES; and the commercialization expenses.
With this in mind, in addition to guiding public pricing, the valuation of production stocks, the retro-analysis of operational practices employed in the production chain, the promotion of improved performance by managers through benchmarking actions, product reengineering, waste reduction, as well as the feasibility of changes to the current portfolio, the practice of measuring unit costs of goods produced by the Treasury can certainly be employed as a continuous improvement tool for the organization.
From the theoretical approach and the analysis of the results obtained through the implementation of a cost management model using the ABC methodology, it is expected that the proposed objective has been achieved and it is suggested that FAYS continues to pursue continuous improvement in terms of Cost Accounting, focusing on the goals of quality public spending.
With 30 years of history, Quatá, a dairy products manufacturer, impresses with its potential and speed of growth. The company, founded in 1990 in the countryside of São Paulo, started its operations with only 16 employees and a processing capacity of 3,000 liters of milk per day. Today, the company is responsible for more than 1,600 jobs and has a production capacity of around 1.1 million liters of milk a day. The industrial plant has expanded and currently six factories are producing the various goods in the industry’s portfolio, which includes dry and refrigerated lines among cheeses, kinds of milk, creams, zero lactose options, and specialty cheeses.
Growth is undoubtedly one of the greatest goals of any business. However, it is a process that brings with it great challenges. And for Quatá it was no different. The company uses in its management one of the best ERPs available in the market, TOTVS. However, even with all its versatility, the platform proved to be insufficient to offer the level of detail required to control the indirect costs of such a complex industry. Thus, to support the cost management process, Quatá employed in its logistics and distribution areas a costing model partially by absorption and by activities, using Excel spreadsheets.
Even with the association of these resources, the company still had difficulty in visualizing the costs of all the processes accurately and productively. With a varied portfolio and different production methods, one of the biggest challenges was to efficiently measure profitable and loss-making products. In this context, the production of the industry’s refrigerated goods line proved to be particularly challenging. With an almost manual process for manufacturing their specialty cheeses, accurate costing was not an easy task, but it was a must.
MyABCM has provided Quatá with the possibility of implementing a new cost management model, capable of serving all sectors of the business, integrating smoothly with the ERP already in use. The cost modeling by activities (ABC/M) is now applied from the industrial plant, in the Production area, to the Commercial sector (covering delivery, logistics, and customer service) and also in the back office and the correct allocation of the indirect costs of the business.
The company, which does accounting and management closing every 5th business day, uses MyABCM to extract various dimensions of analysis, which are then published at a very high level of detail. Through integration with Power BI, the findings are quickly made available for viewing by the entire company, which can use the data provided to improve the decision-making process.
Quatá is a company that is growing a lot and it is essential to understand where it is making and losing money, so one of the company’s greatest gains was in the diversity of the performance information and its analysis. And the outcome of this process is the empowerment of the management teams, who now have much more control over the business performance, since strategic decisions are taken based on the data provided by the software. Among them, it is worth highlighting the contribution margin analysis, which is now performed by Product, Channel, Customer, Management, Salesman, Representative, and Region.
With this detailed vision, Quatá has gained an important competitive advantage. The tools of the MyABCM solution are also used for Planning and Budgeting, in addition to providing historical budget data and solutions for scenario simulations that are fundamental in pricing studies and in obtaining sophisticated forecasts.
This is another benefit of great prominence for the organization. With the agility of the market transformations in the dairy segment, being ready for all the possible unfolding of the sector facing economic and supply chain fluctuations put Quatá ahead of the competition. And it is not only in preparing for market fluctuations that the resources for costing, simulation, and scenario forecasting have optimized Quatá’s operations. The industry launches several products every year. As such, the previous studies with the application of target costing techniques produced with the support of MyABCM are a fundamental pillar in the decision-making process regarding these new launches.
According to the Controller Manager, Jullian Soares, who was responsible for the implementation of costing in Excel and later led the MyABCM project at Quatá, “The model has to make conceptual sense for the business. Today, we have everything tied to MyABCM: understanding key business dimensions, individual goal analysis… I can say that without MyABCM, it would be extremely difficult today to manage the organization with the agility that it demands.”
It is also important to note that the support of the MyABCM support team was evaluated by Quatá’s board as fundamental throughout this process. Not only for their experience with the platform itself and its tools but also their knowledge in the implementation of the activity-based costing method and expertise with 100% dedication focused on the topic.
The ability to process and analyze data is one of the cornerstones for the growth of companies. But success doesn’t just depend on the availability of information. Strategy is also a deciding factor. And this is the advantage that we added with our new partnership.
This month, we consolidated a valuable alliance with SAP. The world leading company in ERPs and business management now offers to its clients a flexible and efficient solution for cost and profitability management: the MyABCM Connector for SAP HANA.
It promotes strategic decision-making by combining its analytical power with advanced tools for managing and controlling costs and profitability.
Learn more about the partnership between MyABCM and SAP below!
The new MyABCM Connector for SAP HANA component is the key to the integration between the systems. It will allow SAP clients to access the features developed by our team to master their business finances.
The module will create an advanced planning and control environment, where users will be able to visualize and better understand their different cost sources. And most importantly, it will be possible to visualize, in real time, how they interact with the other areas of the business.
This means that the resources of both software can be used together, by consolidating and importing the information obtained between the platforms. Thus, with the MyABCM component, the SAP client will be able to develop a deeper understanding of how the costs impact the company’s management and how the different spheres of the organization relate and contribute to its profitability.
Learn about the technical features of the activation of the component:
Our priority has always been to offer advanced solutions in cost and profitability management. And with this partnership, SAP clients will now be able to control the business’s resources in a module that is fully integrated with their ERP, combining several features.
The management solution seamlessly integrates with SAP HANA, allowing you to apply specific allocation criteria and business rules. As a result, the users benefit from dynamic management analyses, which are obtained from a system developed with the particularities of their business in mind.
Learn about the advantages of integration:
More details about the partnership here.
More information about MyABCM on the SAP website here
