SAP PCM Models with Revenue Type

[Former Member]

Hello everyone. I have only recently started using SAP PCM and it has been a journey of discovery. My question is about the revenue types in certain models I use. In some models cost are allocated to cost objects and revenue is loaded to revenue types and cost objects as a given, they use the inbuilt contribution grid values and everything clearly works in other models revenues are allocated and sit in cost objects and revenue types are still used to calculate contribution profit levels and so on but they don't use contribution grid value. Which is the correct way to use revenue types please?

[Former Member · Accepted solution]

The use of Revenue Types is determined largely by the requirements of the customer.

The out of box functionality of Revenue Types, suggest cost and only costs are loaded in as inputs and Revenue is loaded in the Revenue cube. So this means that all in-built functions and values such as contribution are made to work in this specific setup.

A developer could decide not to follow this for the following reasons:

1) Revenue required to be allocated to cost objects

2) Revenue has a complex set of business rules to calculate it which could be specified in Revenue Type Rules

3) Both 1) and 2) apply at the same time

Recommendation is to keep your model as simple as you can then for complexity add where necessary.

[former_member783461]

Hi Martha,

This is a bit of a cop-out of answer, but it depends.

One thing to consider before you use Revenue Type for very much is whether or not you're going to want to export the model results. If yes, then I find it preferable to calculate revenue (even if it's sort of a fake calculation" by loading revenue to the ActivityDriverValue Cube, and then allocating it to the CostObjectValue Cube.  The benefits of this approach over using the Revenue Types & Revenue Cube are twofold:

1.) You now have Revenue and Cost in 1 cube, so you can structure your line item hierarchy to have a top-level consolidation of Net Margin.  This is really desirable, as you can now build a P&L for any Cost Object element with just one Cube (CostObjectValue).

2.) You can now export Revenue and allocated costs back out of PCM for consumption by any downstream tools you wish to use for subsequent BI reporting.

I generally avoid using Revenue Types in most cases, as PCM's CostObjectValue cube seems to perform better than the Revenue cube also.  I've found that most things for which you'd consider Revenue Types can also be accomplished via Activity Drivers and the CostObjectValue cube instead.

Mike