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Keeping costs under control
with a CPM tool

​The introduction of Corporate Performance Management (CPM) software offers significant advantages in terms of planning, monitoring and improving business performance, but it also has another important aspect: it is not reserved only for large companies.

An excellent example is one of our clients, an SME that operates in the service sector, which has chosen to invest in a control model to be able to analyze the management income statement in maximum detail by job order, with the aim of having greater supervision of the fixed and variable costs attributable to it.

​The IBM Planning Analytics platform, based on the TM1 engine, was selected for the project. Thanks to the flexibility of this software in customizing the models and adapting them to the company's needs, it was possible to create a solution capable of responding to the specific requests of the customer. Among these, the most important were:

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  • Loading data from different information systems - combining management and accounting data in a single environment and creating clear confluence rules made it possible to generate a complete management scheme divided into numerous dimensional axes such as: strategic areas, geographic areas, types of services, sales channel, up to the individual customer or order;

  • Managing the dimensions of analysis and organization in a hierarchical way - the dimensions that are not acquired directly by the management software, or those that require specific mapping, were managed through configuration tables. While the hierarchies, which are used to perform drill processes automatically, were created with specific processes;

  • Calculate cost variances - to allow the customer to accurately compare the expected standard costs with the actual ones, a specific module has been created within the control model in which it is possible to:

    • automatically load the actual costs incurred during the execution of the activities, define the standard costs and update the actual hours recorded based on the resource used.

    • analyze the costs by resource type, such as means or personnel, or by cost type, evaluate the total standard cost per job calculated by the system based on the hours recorded in the reference period as well as divide the cost of competence for a more detailed view of the actual expenses.

    • carry out What If analyses with the simulation tool that allows users to evaluate how cost variations can influence the company's results;

Analisi dei dati
Ingegnere delle costruzioni

​Finally, aggregating all the cost data in a single tool allowed to calculate the variances of fuel cost, personnel cost or cost of order vehicles and analyze their causes, offering a fundamental advantage in terms of identifying inefficiencies and optimizing operations to achieve objectives.

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Managing all the aspects in a single tool brought numerous benefits to the customer, including:

  • Monitoring in detail the use of the main resources such as fuel of vehicles, machinery, labor thanks to the drill option, and quickly identifying the set of assets in which the costs exceed the defined standard.

  • Decline the data on different dimensional axes to highlight the areas of operational inefficiencies.

  • Measure the cost differences promptly and create hypothesis scenarios to minimize errors in the organization of resources.

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