Hyperion Tax Provisioning (HTP) System Overview and

Implementation Case Study

Chris D. Teske, PMP – Consulting Manager, Project & Process Managementcteske@ranzal.com

Agenda

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Introduction1

Project Summary Client’s Search for a Tax SolutionRecent Implementation Success

How the was Project Set Up

2

Implementation Process:Requirements, Design, Build, Test and Roll Out

3

Conclusions4

About Edgewater RanzalWho, What, Were and When is HTP?

The Pain Points HTP Addresses for Tax Professionals?

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Who We Are

FocusServicesPeopleMethodologyCustomersPartnership

17+ Years750+ clients

1500+ projects

Long Tenure in Oracle EPM

4

► One of the largest Full-Service Oracle/Hyperion EPM and BI practices.

► Oracle Platinum Partner presented with numerous awards and recognitions by Oracle including multiple Partner of the Year awards.

► Premier Consulting Services in North America, and a regional European office located in the United Kingdom.

Edgewater

Founded in 1996

EssbaseAcquired byEdgewater

2004Data

Integration & Warehousing/

CRM/Web 2.0

Development

AcquiredVertical Pitch

2007HFM/FDM

► Publicly Traded as: EDGW

► One of The Boston Globe’s Top 100 businesses

► Ranked as one of the 500 fastest-growing stocks on Wall Street

AcquiredMeridian

2010HSF

Planning2001

Planning

Build OBI Team2011OBIEE

Ranzal

Build DRM & HPCM Teams

2009DRM &HPCM

Open UK Office2010EMEA

AcquiredExalytics Machine

2013Exalytics

Ranzal Cloud Offering

2014PBCS

EndecaOffering

2014

First HTP2014

“Go Live”

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Our Service OfferingsDashboards & Scorecards, Financial Analytics & Reporting, Operational Analytics, What-if Analysis, Query & Reporting, Visual Exploration, (Endeca) Information Discovery

Financial performance, Legal, Segment & Mgmt Reporting, Financial Close

Cash Flow, HFM Optimization, Performance Lab, SOX Compliance Support Strategic Finance, Planning, Budgeting,

Forecasting, Workforce Planning, Capital Planning, Project Financial Planning

Data Integration, Financial DataManagement, Data Warehousing, Master Data Management &DRM,

ETL Services, Automation

Project/Program Mgmt, EPM Road Maps, Application Reviews, Business Requirements, Process Change, Documentation

Installation, Upgrades, Migration, System Monitoring, Backup and

Recovery, Disaster Recovery, Load Testing, Hardware Sizing,

Exalytics Benchmarking

Consolidation& Reporting

BusinessIntelligence

EnterprisePlanning

Infrastructure

Training &Support Services

ProjectManagement

DataServices

Costing & Profitability

Mgmt

Support Services – Infrastructure & Application Support Contracts

Key Teach Course Delivery: Planning, Essbase, Financial Reporting, Smart View, HPCM, HFM, FDM, DRM, OBIEE

Custom Training Delivery: Process & Reporting

HPCM Standard & Detailed Models, Waterfall Allocations, Activity Based Costing, Customer, Product & LOB Profitability

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Ranzal / Oracle Partnership

► 100% Oracle Partner – Platinum Certified

► Co-Development Efforts with Oracle

► Beta Testing Participation

► Oracle New Release Product Training

► Partner Advisory Board

► Development of Certification Exams

► 3 Ranzal ACE Members Across EPM Platform (HFM, Planning, & FDM)

► 12 Industry EPM ACE Members Total

• Business Rules

• EPMA

• HPCM

• Balance Sheet Planning

• Capital Asset Planning

• Disclosure Management

• Close Manager

• Workforce Planning

Introduction

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Purpose-Built / Out-of-Box: a Tax Provision solution that is built on the Hyperion Financial Close Suite:

1. Data Collection - automated & manual

2. Tax Provision Calculation - IFRS & US GAAP

3. Tax Reporting - out-of-box tax reports & ad-hoc

Owned by Tax - Leverage your existing investment in Hyperion, but both Tax & Finance retain the flexibility they need

Integrates with Tax Compliance - Enhances & integrates with tax compliance software

Rapid Implementation & Ease of Use: the technology & expertise is already in the Finance organization

ERP:

Oracle

JDE

SAP

Sub-

Ledger

Others

Transactions Assurance Reporting

Metadata

Managem

ent

Data

Quality Management

&

Financial

Reporting

SmartView

Financial Close Management

BI – Finance Dashboard

Tax Provision

Financial Consolidation

Shared DNA

Who is HTP?

Introduction

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What is HTP?

Hyperion Tax Provisioning (HTP) is a purpose built Tax Provisioning Application that has been commercially available for eighteen (18) months, sits on top of the HFM technology platform with the following release history:

February of 2013: Oracle released the application offering: Hyperion Tax Provisioning (HTP) –Version: 11.1.2.2 (primarily for US GAAP)

July of 2013: Version: 11.1.2.3.100 (included IFRS enhancements)

February of 2014: 11.1.2.3.501 (addressed IFRS requirements for Canadian Customers)

• Metadata Structures – Chart of Accounts– Custom Dimensions (5)– Currencies, sample of entities, etc.

• Rules dynamically linked to the metadata• “Memberlists” dynamically linked to the metadata• Web forms (77) dynamically linked to the metadata• Reports (63) dynamically linked to the metadata• Custom Links (8) display select user-defined setting for specific dimensions• Tax automation module

Introduction

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• Where is HTP?

• As you can see from the figure below, both financial and tax close processes are interrelated from both a Meta and Trial Balance Data level perspective:

• What makes their relationship uniquely symbiotic is they rely on each other during the close process in order to get their tasks completed

Introduction

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Meeting Reporting Challenges of Sarbanes - Oxley (2002) and Senior Officer Accounting (UK 2009):

When is HTP?

Transparency of the: “Book” to “Tax” relationship…

Introduction

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The Pain Points HTP Addresses for Tax Professionals?

• FIN 18 – Interim Reporting• FIN 48 – Tax Positions that are less than certain• FASB 5 – Loss Contingency• MACRS – Modified Accelerated Cost Recovery System• CSR&ED - $20 to the first person with the correct definition…

• HTP represents a pragmatic approach to resolving the complex needs of the Corporate Tax Provisioning Group by:

– Automating the Source Data Relationship between “Book” to “Tax” relationship and maintaining transparency of the data conversion process

– Eliminating the use of Excel Spreadsheet for calculations and as a data source for historical reference

– An End to End tax provisioning process as well as Journal and Footnote creation to complete the financial close process

» Assured Accuracy of Reporting (single version of the truth)» Historical References on Demand (prior provisions)» Time Efficiencies (data readiness – provisioning - adjustments)

Project Summary

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A Company’s Search for a Tax Solution

• With a comprehensive tax provisioning process; existing “filing / compliance” based commercial products unable to meet provisioning needs:

• Thomson Reuters (OneSource)

• CorpTax (Provision)

• LongView (Tax)

• Vertex

• CCH (TaxPrep)

• Company conceded the need to create a “One Design” solution with the conclusion of using: Hyperion Planning / Essbase

• Introduced to Hyperion Tax Provisioning (HTP), after several demos and discussions decided their best option was HTP/Early Adopter Program

• The Oracle Hyperion HTP Team are seasoned veterans in both tax processes as well as the HTP (HFM) technology

Project Summary

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• A Recent Implementation Success

• Cenovus Energy Inc, is an “Upstream” Oil Exploration Company based in: Calgary, AB• Maintains a large Oracle Hyperion Footprint• Organization is innovative in nature and have participated in previous “Early Adopter”

programs• Current Process was 20MB Excel File (75 plus tabs and lots and lots of links)

• Project Set Up

• Standard Waterfall Approach:• Requirements• Design• Build• Test• Roll Out

• As part of the Early Adopter Program had direct access to Program and Development Staff • We were able to provide feedback and commercially viable suggestions were incorporated

in the release schedule

Requirements

The “As is” and “To Be” Process Review:

• Decomposed Current Processes to understand it in a way that it can be incorporated into HTP Data Structure (“As Is”)

• Next modify the “As Is” into a “To Be” format incorporating requested process changes (functional and design to the HTP format):

Design

Design:

• Design Phase consisted of comparing the “To Be” process with “Base Functionality” (creating the: “Gap Analysis”); this included review of the OOTB Calculation Functionality:

— Green – These subroutines are part of the pre-built HTP Application

— Yellow – These subroutines are based upon “To Be” design and did not reside within the HTP Application

— Orange – These subroutines steps were pre-built in HTP Application, however they have some level of ‘GAP’ due to specific requirements to integrate the ‘yellow’ process steps which directly or indirectly impact these process steps

Design

Design, Continued:

• Design also consisted of where the HTP application would exist in the existing Hyperion Environment as well as how source and destination data would be integrated:

Design

Design, Continued:

Design also identified where the “To Be” provisioning processes would be integrated into the Base functionality of the HTP deliverable:

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Design, Continued:

Design also identified how the user interface flows (Data Forms and Task Lists) in conjunction with the flow of the provisioning:

Design

Build

Build:

• Configured HTP based upon Functional Process Flows (Task Lists/ Data Forms as required to):

• Update Global Assumptions (assuming Tax Rate Updates)• Update with Trial Balance Data• Perform Tax Automation

• Address: Current Provision• Address: Deferred Provision and Deferred Tax Roll Forward

• Final Provision Reporting (including TARF)• Tax Journal Entry• Tax Footnote/ Extract for Filing Solution• Return to Accrual

Build

Build, Continued:

Build

Build, Continued:

Build

Build, Continued:

Build

Build, Continued:

Test

Test:

• Prior to User Release for Testing: User Acceptance Testing (UAT), confirm all effort passes Unit Testing while in the “Build” Cycle

• UAT should consist of End User Involvement and scripting replicating previous cycles that can be replicated:

• Prior Year Actual• Prior Year Budget• Outlook: 02/10 • Outlook: 03/09 • Interims: Q1/Q2• Monthly

Test

Test, Continued:

• Create Technical / Administrative documents to be incorporated with existing Support Group library:

Roll Out

Roll Out:

• Environmental Migration (Test to Production)• Perform:

• Technical Hand Over Training • End User Training

• Run in Parallel to confirm functionality / configurations nominal

Conclusions

Conclusions:

• Go Live: June 28, 2014

• On: Time, Budget and Scope

• To Date, zero production defects have been reported

• Cycle Time Savings:

• Preparation and load of data: 45 minutes

• Automation and Current Provision (Tax Advisor readiness: 5 minutes)

• Advisor Adjustments (this is where additional time savings are being made), an overall two day process has been reduced to two hours with no concern for disparate data

Conclusions