hyperion profitibility and cost allocation introduction

8/9/2019 Hyperion Profitibility and Cost Allocation Introduction

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Introduction

toHyperion Profitability and Cost Management

Presented By :Amit Sharma

http://www.bispsolutions.com/





Oracle Hyperion Profitability and Cost Management, Fusion Edition is ananalytic application that manages the cost and revenue allocations that arenecessary to compute profitability for a business segment, such as a product,customer, region, or branch.

About Profitability and Cost Management

1. It allows profitability or cost measurement of business segments.

2. It is designed to cost decomposition, consumption-based costing andscenario-playing to measure profitability.

3. It play an important role in cost analysis and cost bench marking.






Hyperion Profitability and Cost Management

Architecture

As given in below diagram, HPCM uses two kinds of cubes, Oracle Essbase BSOfor calculation and ASO for aggregation and reporting. However, the interfaceremain same "Workspace" and all metadata is continue to be managed usingD

imension library and application library.






The below architecture shows workspace is used as common user interface. EPMAto main model using Dimension Library and Application Library. HPCM takes inputfrom EPMA/DRM and workspace. All calculation take places in BSO cube and datatransfer to ASO cube where reporting take place.

Hyperion Profitability and Cost Management

Architecture






Steps to Build HPCM Application

Define the dimensions andmembers using EPMA to buildthe database outline.

Build a customized model in

HPCM that represents thenetwork of allocations requiredfor your products or services.

Assigned drivers specify how datais calculated, using standard orcustomized formulas.

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About Models and ScenariosA model is a representation of part or all of an organization, and contains costs andrevenue categories that are similar to the organization's chart of accounts.




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A model is comprised of the following elements:

Which organize the steps inthe allocation process withinyour organization.

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Stages

Which describe the objectswithin each stage in the model,such as products, customers,regions.

Business dimensions

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Which contains the measures forcost, revenue, driver selections,and driver data

Measure dimension

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A model is comprised of the following elements:

Point of View (POV) dimensions,which contain time periods andscenarios.

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Point of View (POV) dimensions

Which determine how cost orrevenue source values arecalculated and allocated.

Drivers

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which map source data todestinations, directly or by usingdefined assignment Rules.

Assignments

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Allocation Example

Stages Product,Shipping

Business Dimension New York

Measure dimension Initial Setup, Machine MaintenancePoint of View (POV) dimensions: Actual, 2015-Qtr1

Drivers Number of Setups, Machine Hours

S.No Activities Cost Cost Driver

1 Initial Setup 107,000 Number of Setups

2 Machine Maintenance 50,000 Machine Hours

Total Indirect Manufacturing Costs 157,000

Product A Product B Total

1 Direct Labor Hours 7000 3000 10,000

2 Number of Setups 30 70 100

3 Number of machine Hours 1200 3800 5000

Company Plan to Produce 350 Units of Product A and 225 Units of Product B

We need to compute the indirect manufacturing cost per unit for each product

Setups 107,000/100 Setups 1070/SetupMaintenance 50000/5000 10/Machine Hours

Product A Product B

Setup 1070X30=32,100 1070X70=74900

Maintenance 10X1200=12,000 10X3800=38000

Total 44,000 112900

Product A Per Unit Cost 44,000/350 =>125/Units Product B Per Unit Cost 112,900/225 =>501/Units






Define your requirements, the allocationmethods, and the number and type of

stages required

Define business dimensions usingPerformance Management Architect tobuild the database outline

Create model stages to define thecalculation order from the beginning ofthe process to the delivery of the finalproduct or service.

Create drivers to specify how to calculate

cost and revenue data. One dimension mustbe selected as the driver for each stage.

Assign drivers to selected dimensionsand members. You can assign a driverto the entire dimension.

Steps to Create Models

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Create assignments for stageintersections using assignment rules or

explicit assignments to select dimensions.

Validate model structure for each stage toensure the model structure conforms tovalidation rules, such as completedassignments and no unused drivers

Create the Essbase database, andpopulate the database with cost, revenueand driver data, through Profitability andCost Management.

Load data into the model, either through

Profitability and Cost Management ordirectly into the Essbase database.

Calculate the Calculation Database toobtain the results of direct assignmentsfor source and destination intersections


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Run the calculation scripts required tocalculate each stage. Monitor the

progress of long running jobs,.

Transfer data from the Calculation databasewhich uses Block Storage Option (BSO) to theReporting database(ASO).

Calculate the genealogy data. Genealogycalculations use the reporting database toobtain data for calculation as it is fasterthan using the calculation database.

Run the Stage Balancing, Driver Data and Trace

Allocation reports. Make any edits or correctionsto the model or data, and then rerun thecalculations, as required.

Report on the calculated results, usingOracle Hyperion FinancialReporting, Oracle Hyperion Smart View .


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Stage wise Model

In Profitability and Cost Management, you create model stages to reflect each majorprocess or activity in your business. You assign dimensions to each stage to define

the intersections where data for the stage is stored. Stages exist only in Profitabilityand Cost Management and are not recognized in Performance ManagementArchitect or in Essbase.






Any Question?



hyperion profitibility and cost allocation introduction

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