KPMG Peat Marwick acquires Profit Manager activity-based management suite from Strategic costs systems; Profit Manager software enhances firm's operations improvement practice

Business Wire, Feb 26, 1996

NEW YORK--(BUSINESS WIRE)--Feb. 26, 1996--KPMG Peat Marwick LLP of New York, NY, today announced it has purchased the Profit Manager software suite from Strategic Cost Systems (SCS) of Boston.

Profit Manager, an activity-based management (ABM) software suite, will help KPMG consultants integrate their clients' cost, profitability and performance measurement activities across multiple sites.

KPMG's Profit Manager facilitates the implementation of an ABM environment within a corporation. ABM is typically the first step in business process improvement and is an operational accounting model that pinpoints costs based on actual consumption of resources by activities within a process.

Profit Manager, an activity analysis software suite, is comprised of three modules: Task, which allows users to load and analyze detailed tasks and activities; Plus, which calculates and assigns performance metrics to an activity or task, and associates employee and other resource costs to activities and tasks; and Best, which enables decision makers to perform ad hoc profitability and cost forecasting for budgeting and planning in an ABM environment. KPMG has worked with SCS for eight years using Profit Manager to implement ABM environments for its clients. Typically, KPMG installs the ABM software and trains client companies on its use in the course of an ABM engagement.

"We are very pleased that KPMG will be taking over the ongoing development and enhancement of Profit Manager," said ABM guru and SCS co-founder (with Robin Cooper, Claremont Graduate School) Robert Kaplan, Arthur Lowes Dickinson professor of accounting, Harvard Business School. "KPMG has the capabilities to build upon the extensive ABM functionality now contained in Profit Manager - functionality that incorporates the most advanced thinking of Robin Cooper and myself - and integrate it with contemporary enterprise-wide information systems."

Kaplan also noted that KPMG, with a decade of successful ABM consulting and implementation has the experience and expertise to take ABM-focused software to Stage IV implementations. According to Kaplan and Cooper, in Stage IV, ABM will become embedded in everyday life in organizations and will be used in ongoing management processes, like budgeting, reporting, product design and target costing, reengineering and operations improvements and the strategic decision-making that affect these processes, products, customers and services.

KPMG's first step in bringing the software to Stage IV is extending the enterprise-wide business decision-making capabilities of Profit Manager through integration of one Profit Manager module, Task, with Cognos' sophisticated business intelligence software - PowerPlay 4.1 and Impromptu 3.0 - and will follow with integrated versions of Best and Plus in Q3. This move brings ABM to desktops of decision-makers across the enterprise.

According to Ralph Canter, partner in charge, KPMG's ABM Practice, "The acquisition of Profit Manager software is another example of our commitment to providing the most up-to-date products and services to our clients. Profit Manager's ABM capabilities, coupled with our technology and consulting experience, is a great combination for a rapid, cost-effective ABM implementation."

Through this technology acquisition, KPMG will continue to implement and improve Profit Manager software for its clients, working closely with SCS founders Robert Kaplan and Robin Cooper. Kaplan and Cooper will provide ongoing development concepts and ABM methodology and theory counsel to KPMG for continuous improvement of the software suite.

About KPMG Peat Marwick

The Strategic Services Consulting (SSC) unit of KPMG Peat Marwick LLP applies knowledge in operations management and enabling technologies to help clients improve business performance. It focuses on delivering measurable operational improvement of time, cost and quality in clients business operations. Strategic Services Consulting is organized into three strategic service areas -- Enabling Technologies, Enterprise Package Solutions, and World-Class Operations Improvement.

KPMG Peat Marwick LLP is the U.S. member firm of KPMG, The Global Leader among professional services firms. Worldwide, KPMG has more than 6,000 partners as well as 73,000 professionals servicing clients through 1,100 offices in 812 cities in 142 countries. In the U.S., KPMG partners and professionals deliver a wide range of value-added consulting, assurance and tax services in five markets: financial services; manufacturing, retailing and distribution; health care and life sciences; information, communications and entertainment; and public services.

CONTACT: Cristina Perkins

KPMG Peat Marwick

305/789-2677

or

Patty Williams/

Kathy Keating

The Weber Group

617/661-7900