peak profitability across the business: understanding the past and planning for the future
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Business Analytics Solutions Provider Using Oracle EPM and BI Technologies
Better Profitability Analysis & Understanding with Hyperion Profitability & Cost Management (HPCM)
Tom N. GargasPrincipal Solutions Architect
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Edgewater Ranzal is a full-service Oracle Platinum Consulting Partner with premier servicesin North America and regional offices in the United Kingdom
We deliver Business Analytics solutions that include Oracle Hyperion Enterprise PerformanceManagement (EPM) and Business Intelligence (BI)
Our multiproduct focus offers domain expertise and technical leadership using the Oracle Hyperion Product Suite
We have industry expertise and specializations to help us deliver end-to-end solutions for each client’s business needs
Who We Are
Our Services
Business Intelligence
• Scorecards & Dashboards; Mobile Delivery• Prepackaged Analytic Applications (OBIA)• BI Foundation (OBIEE / Essbase)• Financial & Operational Analytics• Reporting & Publishing• Visual Exploration• Information Discovery (Endeca)
Financial Close & Consolidations
• Legal, Segment, & Mgmt Reporting• Financial Performance & Close• Optimization & Performance Lab• Tax Provisioning• Regulatory Requirements
Data Integration Services
• ERP Integration• Financial Data Management• Data Warehousing• MDM & DRM• ETL Services and Automation
Infrastructure
• Hardware Sizing, Installation, & Configuration• Exalytics Benchmarking• System Monitoring, Backup, & Disaster Recovery• Upgrade & Migrations
Advisory Services
• Project/Program Management & Process Change
• EPM & BI Road Maps
Training & Support Services
• Standard & Custom Training• Virtual Classroom• Multimedia and UPK• Service Level Agreements• Managed Services & Hosting• Performance Engineering
Enterprise Planning & Reporting
• Strategic Planning (HSF) & Modeling• Planning, Budgeting & Forecasting• Workforce, Capital, & Project
Financial Planning• Public Sector Planning• Cloud Services
Costing & Profitability Management
• HPCM Standard & Detail Models• Waterfall Allocations• Shared Service Charges• Activity Based Costing• Customer, Product, Segment & LOB
Profitability
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Consolidation& Reporting
BusinessIntelligence
EnterprisePlanning &Analytics
Infrastructure
Training &Support Services
AdvisoryData
Services
Costing & Profitability
Mgmt
Profitability Mgmt. Goal… Delivery of Strategic P&Ls
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Profitability Challenge #1 -Statutory Reports are not Timely or Detailed Enough
Financialtransactions
FinancialData
Consolidation(GL or HFM)
AccumulatorBottom-line
Results
Organizational P&L
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What defines a profitable customer?
What is the profit contribution of a product or a service?
What does it cost to sell to or to service customers?
What proportion of resources does a specific customer consume?
Why hasn’t increased revenue resulted in increased profitability?
Profitability Challenge #2 -Indirect Cost Aren’t Assigned to Products, Services & Customers
No Standard Process
Standard, accepted process
Indirect Costs are tracked against supply side structures, not demand side needs. This makes measurement difficult
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Profitability Challenge #3 - Ensuring Consistent Performance as Users, Data Volumes, & Frequency of Use Increases
Sales/Product Managers
Cost Center Managers
LOB Execs.
Finance10’s
100’s
1000’s
1000’s
LOB/Functions
Segments/Entities
Departments
Products & Customers
User Counts Data Volumes
FrequencyOf Use
100’s
1000’s
10K’s
1 MM’s
Qtrs
Monthly
Weekly
Daily
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Reporting & Analysis
Product P&L by Activity
Financial P&L
Operational
Data
SourceData
MeaningfulAttributions &
Allocations
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Profitability Management Solution Elements
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Profitability Management Solution Elements
Traditional Activity-Based
• Pro-Rata %, Even, etc.• Simple, Fast, Inexpensive to operate• Commonly used• Does not accurately show cost causes
• Cost pools, organized by activity• Comprehensive & Accurate• Valuable Insight into Operation• Costly to Implement & Operate
Actual Budget Forecast
Process
Cost Allocation
ProfitAnalysis
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Requirements for Costing & Profitability Solutions
Flexibility
• Analyze different chargeback approaches to yield optimal mix of services versus costs incurred by the shared service center.
• Rapidly evolve methodologies as the maturity model of the shared service center evolves.
Audit & Control
• Provide key stakeholders confidence in the numbers produced and methodologies employed to ensure compliance.
Shared Methodology
• Define consistent allocation and charge back methodology across all management cycles.
• Ensures consistent comparisons when reviewing and updating methodology result and planning for future management cycles.
Transparency
• Give Units the detail costs they incur for the service consumed.
• Compare effectiveness of internal unit services with those of external providers to ensure efficiency.
Organizations need information management solutions to address their challenges.
These challenges are driven by F-A-S-T!
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“A Day in the Life” using HPCM
Hi Jane. I’ve been analyzing my financial reports and have some questions and ideas about the allocations to my lines of business
• Process Review• Traceability Map• What-if Modelling• Reporting
MEETING AGENDA
Corporate FP&A Allocations Specialist Business Unit Finance Manager
It would be my pleasure to explain the process to you John. How about you we have a meeting to go over the details?
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Demonstration
Hyperion Profitability & Cost Management
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Shared Methodology, Audit & Control
Total Department
Expenses
Activities
Products
Customers
MANUAL INPUT
OPERATIONAL SYSTEMS
GENERAL LEDGER
Drivers
Drivers
Financials
Structured & Repeatable Process
Transparency: Pre-Built Validation, Traceability
Stage Balancing
Trace Allocations
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Flexibility & Adaptability
Total Dept.
Expenses
Activities
Products
Customers
Total Dept.
Expenses
Activities
Products
Customers
Actual Model What-If Model
Version Comparison & Analysis
Copy Model
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Hyperion Profitability & Cost Management
Packaged Profitability functionality • Computes Profitability for Units, Segments and Services• Pre-Built Framework for profitability modeling:
Pre-built Measures dimension Support for Multiple Cost Allocation methodologies Pre-Built Validation reporting
• Graphical Interactive Traceability Maps• Genealogy Reporting shows flow from any stage to any stage
A User-Driven application• Measures, Allocates and Assigns Cost and Revenues via User Defined
Rules• Finance User-facing Administration• Provides Scenario Modeling for Decision Making
Tightly integrated with the full Hyperion EPM Suite• Shared Data and Master Data via EPMA• Shared Reporting Tools like Financial Reports & Smart View for
Office• Proven Technology Stack
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Client #1: Attributions & Allocations
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Client #1: Solution Architecture
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Attribution
Planning
HPCM
Cost Allocations
Budget Planning
Application
Driver Data
Hyperion Planning
Hyperion Profitability & Cost Management
Microsoft Excel
HPCM Stage
Management
Utility
Set POV Variables
Load
Costs
Load Driver
Metrics
Attribute
Data
Load
Pools
Update
Alloc
Rules
Run
AllocsValidatePublish
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Oracle Platinum Consulting Partner - 100% Focus on Oracle/Hyperion EPM & BI• 175+ Full time EPM/BI Billable Consultants throughout the US, Canada and UK
EPM & BI Experience & Success• 1,700+ Oracle EPM & BI projects successfully delivered across 850+ clients since 1996
Depth & Breadth of EPM & BI Service Offerings• Product Experts across full EPM/BI Suite - Planning, HPCM, HFM, HSF, HPCM, Essbase, OBIEE, DRM, FDMEE
• Advisory Division for Visioning & Roadmaps, Full Life Cycle Implementations, Technical Assessments
Additional Value Added Service Offerings• Exalytics – Installation, Configuration & Benchmarking Services
• Infrastructure Services – Design, Configuration, Performance Tuning & Upgrades
• Support Services – Remote Help Desk, Lev 1 Support, Patch release Support
• Training Services - Customized and Pre-Packaged EPM/BI Training Delivery
• Ranzal Oracle ACEs Across EPM/BI Platform (Planning/BI, HFM & FDMEE)
• Co-Development Efforts with Oracle Product Management
Customer Advisory Boards, Beta Testing, Certification Exam Development
Oracle has 100 live HPCM Customers, Ranzal implemented at 20 of the 100!
Ranzal Differentiators
