In this blog series, we have discussed why Oracle Cloud PCM has clear advantages over building allocation solutions in Excel and within the General Ledger. We now turn our attention to why Oracle Cloud PCM solutions have distinct advantages over Custom allocations solutions. As we mentioned before, we are using the word “Custom” here in quite a broad sense, any solution that is built outside of a purpose-built allocation tool is what we would consider “Custom.” This is because when we utilize a relational application, Essbase, Oracle Cloud Planning, and competing EPM products for our allocation solutions we are having to build our solutions from the ground up with little ability to draw on industry-standard leading practices and standardized documentation. In many ways, building our allocations solutions in Custom applications is like building them in Excel but with slightly more benefits and a lot of extra associated costs.
Custom solutions built-in technology, such as relational databases, have the advantage of being scalable for incredibly large datasets, can have controls built into place, and are built to the exact specifications of the organization. On the downside, they quickly become “black-box” solutions where only key personnel know how to maintain the solution with difficulty. Lack of reporting and traceability are also common complaints with relational tools.
Building simple allocations in Essbase, Oracle Cloud Planning, and competing EPM products is viable, but building allocations solutions is not. Forcing these allocations solutions into these tools is possible, but we come back to our theme of just because a technology can do allocations does not mean it is the correct tool for an application solution.
In this blog, we will look at some of the key advantages that Oracle Cloud PCM has over Custom-built allocation solutions.
Business User Focused
A common advantage of Oracle Cloud PCM is how the tool is focused on Business Users. Oracle Cloud PCM does not require complex coding knowledge and is purpose-built as an allocation solution that has very clearly defined leading practices and documentation. This means that the power of maintaining the allocations is in the control of the business user.
Custom solutions, whether built-in relational databases or EPM applications, are technologically complex and require both knowledge of the coding language behind the solution and unique system knowledge to know how it is configured, as it has little or no industry standards and documentation.
Integration and Automation That Serves the Needs of the Business
Custom allocation solutions, especially those built in relational databases, are at a disadvantage when comparing their integration and automation capabilities with Oracle Cloud PCM. Inputting data and retrieving data from these solutions is often cumbersome or requires complex customized solutions, which can become painful to maintain throughout the life of the solution. In addition, the automation of the solution is similarly built through complex and custom scripting which is difficult for business users to orchestrate.
Oracle Cloud PCM allocation solutions have the power of Oracle Cloud EPM to integrate with various on-premises and cloud technologies ranging from relational databases, ERP, and EPM products. These integrations, as well as various business processes, can be automated through EPM Automate and/or REST API to enable a solution that is integrated and automated, leading to a reduction in the time maintaining and running the solution and increasing the time for analyzing the results.
Allocation Methodology Transparency, Visibility, and Traceability
Custom allocation solutions are plagued with transparency, visibility, and traceability issues and concerns. These technologies are simply not built to enable true visibility into the allocation methodology that is required by our modern reporting and auditing standards. The ability of these solutions to meet these modern standards is purely a result of the ability of the consulting partner to deliver. Every Custom solution is different: some may address the requirements, at least initially, but others will not and will have to be rebuilt from the ground up.
Core to Oracle Cloud PCM is the ability to provide transparency, visibility, and traceability to the allocation methodology and process. The framework on which the tool was developed was born out of a desire to build an industry-leading allocation solution by analyzing the custom allocation solutions for hundreds of clients. The quality of the Oracle Cloud PCM allocation solution is impacted by the choice of the consulting partner, but to a much lesser degree than other custom solutions.
Create Trust in Results
As we mentioned in our introduction, custom solutions are often black boxes when it comes to how the allocation methodology is deployed and calculated. This is a result of the need to be able to understand the coding logic on which the solution was developed, having multiple tables, views, and/or calculations to sort through to try and understand the results, and the dependency on key personnel who can decode them. There is also the issue with the documentation of the solution, which is cumbersome to maintain and is often severely neglected.
Because of this, in custom solutions, it is common for two different people to search for the same output to deliver two different results. This erodes trust in the solution’s output and grows seeds of doubt in the solution’s output.
Building our solutions in Oracle Cloud PCM avoids these black-box issues by enabling the business users with the power to understand, maintain, and report on their allocation solutions. The solution is maintained through a readable front end devoid of coding and other complexities. Built-in reports can be produced to document the allocation methodology, and different users looking for similar results will always retrieve consistent results.
Constant Improvement
Custom solutions built are often restricted to the functionality that is available at the time of the implementation. Any new features often require the installation of new versions and/or large-scale projects to migrate entire ecosystems of applications to new versions. In addition, bug fixes can be difficult, timely, and costly to install.
Oracle Cloud EPM is constantly improving and fixing bugs if they arise. Any updates are pushed monthly to the instances, meaning that allocation solutions built in Oracle Cloud PCM always have access to the newest functionality available. In addition, because Oracle Cloud PCM is a separate application from the General Ledger and other EPM products, if a migration is required it is done so in isolation and will not affect the running of other important applications.
Lower Cost of Ownership
Although the initial cost of the tool utilized in the allocation solution may be low, especially in the case where the technology is already licensed (as is often the case of relational databases or even other EPM products), the overall cost of ownership for custom solutions is almost always higher. Custom allocation solutions at a minimum require technology specialists to not only implement but ultimately maintain. These technology specialists aren’t just limited to changing the allocation methodology and other large changes, but they are often required for the monthly running of the allocation. Over the life span of the allocation solution, this can translate into a large expenditure and key personnel dependency.
For clients who have already implemented EPM solutions with Oracle’s Enterprise EPM License, there is no license cost associated with implementing Oracle Cloud PCM. Oracle’s approach is ensuring the right tool for the job to ensure that unacceptable compromises aren’t implemented. In addition, because Oracle Cloud EPM is Business User-focused, the requirement to have technology specialists is often totally avoided. This means that over the life of the allocation solution, the total cost of ownership is drastically reduced.
Conclusion!
In the end, our blog series can be summarized in a single sentence:
Utilizing a tool that is not purpose-built for allocations will always involve a more customized, maintenance-heavy, and, ultimately, costly allocation solution than utilizing a tool that is.
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