Profitability Cost Management is based on Activity Based Costing. It helps identify the most profitable customer, product, distribution channel. It allows organizations to run what if scenarios very effectively so they can make clear decisions knowing its impact.
Companies strive to maximize profits. You can cut cost or increase revenue or do both. This means understanding the various factors that influences them.
A very key competitive advantage is to successfully formulate and execute strategy. Execution is not the end, we need to have a methodology and the tool to constantly measure and adapt.
The Traditional CO module within ECC does not provide the flexibility when it comes to analysis or to perform what if analysis etc. PCM was born out of these needs.
PCM has its own inbuilt Activity Based Costing engine. It is can consume data from SAP and Non SAP source system.
PCM offers capability to do what if analysis based on various alternatives.
The PCM tool is a part of EPM and integrated with BPC and other EPM components. You can use the drivers generated from PCM in BPC for planning.