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Enterprise Performance Management

Alexander StroblEPM Sales Consulting EE&CIS


Agenda

• EPM Overview

• Delivering a World Class Financial Close

• Delivering World Class Enterprise Planning

Copyright © 2010, Oracle and/or its affiliates. All rights reserved. 3

Enterprise Performance Management is a Disciplinethat Enables Management to:

Link strategies to plans and execution,

Monitor financial and operational

results against goals, and applying analytics to

Drive enterprise-wide performance

improvement.


Oracle EPM Connects Management Processes


Common Integration & AnalysisData Quality and Consistent Dimensions

Common Reporting & Interaction

ExcelXML

Other Systems

Oracle EBS, PeopleSoft, SAP, …

Data WarehouseData Mart

EPM Enables World Class Finance

• Alignment

• Predictability

• Consistency

• Transparency



Agenda

• EPM Overview




Close Sub Ledgers into GL (i.e. AR, AP, FA, etc.)

Perform Reconciliations• Bank Reconciliations• Standard Account Recon• Sub Ledger ReconPost Accruals

Deliver self service reporting to the organization for performance discussions and plan realignment

Automate external reporting gathering disclosures and financial information

Automate and deliver Edgar & XBRL filings, Statutory filings, Tax, etc.

Gather and validate complete data sets to support all financial reporting needs (i.e. Legal Entity, Segment, Management, Tax, Sustainability Metrics, etc.)

Automate consolidated financial reporting leveraging multiple hierarchies/dimensions and calculations (i.e. CTA, FASB, KPI’s, FX, Retained Earnings, Topside Entries etc.)

Achieve a World Class Close


Critical Components to ImplementFinancial Close Best Practices

FinancialConsolidation

DataAssurance Document

Management& Filing

Financial andMgmt. Reporting

ERP: Oracle, SAP, Legacy, Other

TaxFiling

Financial Close Workflow

CFO Dashboard

TaxCalculations

Transactions Reporting

Governance, Risk & Compliance


Accounting Differences

Manual, Error-Prone Processes

Challenges to a World Class Close

Lengthy close processes with weak internal controls and

rigid systems cannot exploit new opportunities creating a

disconnect between strategy and execution.

$

Subsidiary 1

¥

Subsidiary 2

Joint Venture

HR System

CAD

Complex Ownership Structures

Multiple, Fragmented Systems

Parent Company

£


Focus on Quality Reporting and Reduction in Time

• Deliver Multiple reporting objectives (Legal Entity,

Management, Tax, GAAP, IFRS, etc.) from one source

• Reporting Flexibility (multiple hierarchies, dynamic

reporting)

• Reduce the Length of Close process

• Eliminate inconsistencies and manual/error prone

processes

• Reduce the cost of compliance (GAAP, SOX, Stat, etc.)

• Automate Intercompany matching and elimination

• Collect of data across multiple sources easilyCopyright © 2009, Oracle and/or its affiliates. All rights reserved. 11

Key CapabilitiesAccelerates Reporting Cycles and Reduces Costs of Compliance

• Patented financial consolidation and reporting features

• Complete audit trails, workflow

and validations

• “Smart Dimensionality”

• Flexible “what if” scenario management features

• Powerful, reporting and analysis tools

• Full integration with ERP and other transaction systems

• Easy to customize and extend

• Web-architected

Copyright © 2009, Oracle and / or its affiliates. All rights reserved. 12

Oracle’s Financial Close Solution5 Steps to a World Class Close

1 Create an accountable organization

3 Improve transparency

5 Reduce the cost of compliance

2 Ensure financial data quality

4 Automate reporting


• Self service reporting

• Workflow driven

• Business users load their own data

• Business users manage their own dimensions

• Automated account reconciliations




• Validate data at entry point (i.e.. A=L+E)

• Gather data from multiple sources (i.e. GL and HR)

• Certify the data sets are accurate and complete



• Process status reports

• Process alerts and dashboards

• Visibility into the consolidation

• Visibility through reporting



• Multiple Reporting Standards – GAAP, IFRS, Management, Statutory etc.

• Multiple Hierarchies

• Foreign Currency Translation

• Disclosure Management and XBRL(10Q/K, SEC filings)

• Standard Reports



• Complete Audit Trails

• Financial Governance

• 302 Certifications


Oracle’s Financial Close Solution5 Steps to a World Class Close








Agenda

• EPM Overview




Disconnected Processes Lead to Inefficiency and Missed Targets

• Time – cycles take too long, missed opportunities and obsolete plans

• Quality – data integrity, lack of standardization and communication

• Flexibility – lack of responsiveness to changes

• Cost – many wasted resources, questionable benefits


FP&A

Senior Management

Annual Plan & Forecast

Revenue & Cost Models

M&A

Departmental Plans

Headcount Plans

Treasury Plans

Long-Term Planning

Run models based on key strategies

Set targets

Seed targets to annual operating plan

Start annual process

Update strategic plan with latest forecast

Evaluate resource and capital requirements

Achieve a World Class Enterprise Planning Process

Assess and Manage Risk


Validate operational feasibility to financial plan

Update forecast with latest budget and actuals

Critical Components to Implement Planning Best Practices


Capital AssetsPlanning

Workforce Planning

Long-Term Financial Planning

FinancialDetail

OperationalDetail

Predictive Modeling & Simulation

OperationalRevenue & Cost

Modeling

Planning, Budgeting & Forecasting

Functional Plans

ProjectPlanning

MarketingPlanning

Key CapabilitiesAccelerate the Enterprise Planning Process

• Centralized system

• Align top-down and bottom-up

• Consistent assumptions

• Common allocations & calculations

• Integrated Operational Planning to address in-depth revenue and margin planning

• Purpose-built Capital Assets and Workforce planning modules for fast deployment

• Powerful workflow and process management for budgeting and forecasting

• Leverages Essbase – powerful reporting and analysis


Forward-looking Analytic EngineFast and Simple with Essbase

Powerful Calculator• Hundreds of built in functions and

algorithms

• Trending

• Goal seeking

• Procedural calculations

Financial Intelligence• Critical for Variance Analysis, understands

better / (worse)

• Essbase understands Financial Data and Calculations

• Time Balances

Time Intelligence• Time Series calculations are hard to do

• Yet, an extremely common BI requirement

• Essbase makes it very easy at any level, any dimension, for any type of calendar


Best Practices For a World Class Enterprise Planning Process

1 Measure financial impact of business strategies

3 Evaluate impact on workforce and capital assets

5 Manage risk and uncertainty

2 Validate operational feasibility of financial plan

4 Adjust the forecast continuously


• Evaluate strategic projects and initiatives

• Simulate effects of M&A

• Optimize capital structure

• Review impact on financing strategies

• Set annual targets

1 Measure the financial impact of key business strategies


Long-term Planning, Corporate Development and Treasury in a Single Model

• Integrated financial statements

• Project shareholder value

• Run unlimited scenarios

• Consolidate multiple business combinations

• Evaluate strategic projects

• Simulate effects of M&A

• Debt Scheduling

• Optimize capital structure


2 Validate operational feasibility of your financial plan

• Validate key financial drivers based on operational details

• Accountability from operations and finance

• Continuous validation throughout the planning and forecasting cycles


Align Operational Plans with Financial Goals

• Align plans and planning assumptions across finance and operations

• Review financial impact with plan revisions

• Empower finance team to assess overall business impact and drive fact-based decisions


3 Evaluate the resource impact on workforce and capital assets

• Incorporate the appropriate level of detail in the enterprise planning process

• Ensure you have the right amount of workforce staffed

• Ensure you allocate the right amount of capital required


Assess Resource and Capital Assets Requirements

Detailed Headcount, Staff Expenses, Salary &

Compensation

Detailed Depreciation, Asset Purchase/Sell,

Asset Expenses



• Adjust the forecast continuously by incorporating a monthly or rolling forecasting process

• Incorporate ‘event based’ planning in order to react to change in economic and environmental changes

• Apply best practices and a world class process in order to respond timely


Updated Forecasts Based on Current Conditions

• Continuous forecasts (rolling, event based)

• Manage budget process and workflow with validations

• Top-down and bottom-up

• P&L, B/S and C/F

• Business Unit, Department and Cost Center level

• Revenue and cost allocations

• Driver-based planning

• Workforce planning

• Capital asset planning


5 Manage risk and uncertainty in your plans

• Move from ‘conventional’ to ‘advanced’ scenario modeling

• Review full range of outcomes

• Quantify the risk of not achieving your goals

• Know the probability of outcomes

• Understand key factors impacting your business


Quantify Risk and Uncertainty

• Only 3 possible outcomes• Limited view of risk• What are most important risk

factors?• What are the odds I’ll miss the

target?• Which outcome is most likely?

• Full range of outcomes• Illustrate probability of outcomes• Immediate visibility into inherent risk• True risk analysis for financial models

ConventionalSingle Point Scenarios

AdvancedThinking in Ranges


Best Practices For a World Class Enterprise Planning Process

1 Measure financial impact of business strategies

3 Evaluate impact on workforce and capital assets

5 Manage risk and uncertainty

2 Validate operational feasibility of financial plan



Become A World Class EPM Organization

• Define and communicate your strategy

• Shorten the close process

• Improve your planning and forecast processes

• Extend your profitability and analytic capabilities


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