introduction to hpcm

HPCMHyperion Profitability and Cost Management

Introduction to HPCM

April 29, 2016

Srinivas Salguti

• Proven and Trusted Track Record:• 250+ clients – all CPM / EPM focused

• 500+ CPM / EPM projects

• 150+ HFM projects

• 175+ FDM projects

• 100+ Planning / Essbase projects

• 20+ OneStream Clients (Market Leader)

• 100% client success (13+ years in business)

• 80 employees in 21 states

Finit Overview

Why is Finit here?

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Finit takes pride in being a company of makers and Doers; people who dig in and get their hands dirty

We make and deliver personalized financial reporting solutions and experiences

…Not Company to Company, but Person to

Person

By listening, questioning, and analyzing

The Finit Family

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Fully aligned with our clients, not just bottom line $

No debt or external ownership

Work with Finit employees, no subcontractors

Compensationbased on CLIENT SATISFACTION

PRIVATELY OWNED

CLIENT SATISFACTION

NOSUBCONTRACTORS

DEBT FREE

Finit Values

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Our values on which we ask you to provide consultant feedback:

• Approach & Collaboration

• Integrity & Honesty

• Client Betterment

• Self Betterment

• Colleague Betterment

• Finit Betterment

• Work Effectiveness

• Impact & Innovation

• Proactiveness & Passion

Service Solutions Betterment

Finit Customer Success

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Our values, culture, and approach to becoming a trusted advisor to our

customers has led to

100% customer success

for every Finit client (250+) and for every Oracle Hyperion project (500+)

Some Finit Customers

Questions

About the Presenter

Slide 9

Srinivas Salguti

ssalguti@finit.com

• Member of Finit’s Planning and Essbase Practice

• Worked in Enterprise performance management workspace for the last 12 + years• 10 years at Hyperion/Oracle consulting services

• Primary focus on Hyperion Planning and Essbase

• 3 HPCM full cycle implementations

• OBIEE integration with Essbase

• PBCS

• Certified implementation consultant• Hyperion Planning

• Essbase

Agenda

• What is Profitability

• Oracle’s HPCM Architecture

• Model Components

• Demo

• Key Features of HPCM

• Q & A

Slide 10

Profitability Questions

• What defines a profitable customer?

• What is the profit contribution margin of a product or a service?

• How do business processes impact profitability?

• Cost drivers are not clearly understood and as a result, cost-cutting initiatives are not targeted at the right places

• Focus only on cost and not revenue

Slide 11

How companies try to tackle profitability questions

Slide 12

• Excel/Manual Based Processes and BI Tools Provide Incomplete Solutions

• Lack of process

• Lack of integration

• Lack of confidence

• Rigid, costly to maintain

• Inability to act

What is Oracle Hyperion Profitability and Cost Management (HPCM)?

• A user-driven Performance Management application that:

• Measures, allocates and assigns Cost and Revenues

• Computes Profitability for business segments, customers and products

• Provides scenario modeling for decision making

• Actual Vs Budget

• What-If

• Is tightly integrated with EPM Technology Stack• Shared Services

• EPMA

• Essbase

• Reporting Tools

Slide 13

Profitability Model Types

• Standard Profitability• Enables you to monitor and control direct contribution data for your entire model.

• Data for the Standard Profitability model is housed in both Essbase multidimensional databases and relational databases.

• Provides ability to use hierarchical structures.

• Detailed Profitability• Provides a single-step allocation of data from a single source to a destination for the

purpose of analyzing profitability.

• Data for the Detailed Profitability model is housed in relational databases only.

• Can handle extremely large volumes.

• Management Ledger Profitability• No concept of stages or layers.

• All structure is controlled through the organization of rule sets and rules under POVs.

• Designed for use by analysts who may not have much experience with Essbase or programming languages but have good understanding of management reporting.

Slide 14

Profitability Model use cases

• Standard Model• Where focus is on contribution analysis which enables flow of cost and revenue through all

stages to determine where there is a chance to improve process

• Ex: Financial services - Customer & Branch profitability analysis – used HPCM model to allocated shared services to markets/branches and then to customer / product level to analysis profitability at lowest level

• Healthcare Services – Allocation Model for reimbursement of expenses.

• Detailed Profitability• Single step allocation process with pools or rates from single source to destination for

profitability analysis.

• Ex: Airline route analysis : Track route detailed cost analysis

• Management Ledger• Used by analysts who have deep domain expertise in computation and reporting methods of

management reporting

• Ex: Management reporting analysis : Management reporting analysts who would like to create cost/revenue allocations using defined rules to provide different views for management reporting.

Slide 15

Oracle’s Hyperion Profitability & Cost Management

Slide 16

HPCM Architecture (Standard Profitability)

Slide 17

Calculation

Cube

EPM ArchitectModel definition:

• Stages

• Drivers

• AssignmentsReporting

Cube

Deploy

dimensions

Profitability & Cost Management Model

Aggregate storageoutline

Reporting and Analysis tools:

• Financial Reporting

• Web Analysis

• Smart View

Transfer data

Maintain Metadata & Model design

Workspace

Hyperion Profitability & Cost Management Solution

Block storage outline

Calc script

Oracle EPM Stack - Components of HPCM

• Performance Management Architect (EPMA) – Maintenance of application metadata

• HPCM – Model design and maintenance

• Workspace – Common product interface layer

• Shared Services – Security and product administration

• Essbase – Multi-dimension databases for calculation of models and reporting

• Relation DB – Used in-case of detailed model

• Reporting Tools (not all required) – Smartview Office Addin, Financial Reporting, Web Analysis, OBIEE

Slide 18

HPCM Model Build Sequence

Slide 19

Transfer

EPMA

Interface

StagesDriver

Definitions

Driver

SelectionPOV

POV

Dimensions

AssignmentsAssignment

Rules

Deploy Calculation

and Reporting Cubes

Resource

Costs

Driver/Assignment

DataEssbase database

Reporting

Calculate

Generate Calc Scripts

Create / Deploy Application

HPCM

Interface

Members

Hierarchy

Alias

Property

Alias

Dimension

Business

Dimensions

Measures

Dimension

Calculate Genealogy

Changed Changed

Essbase database

Calculation

1

3

45

6

Sequence

Reporting

EPMA

Application

HPCM

Application

Essbase

Application

2

Creating Applications - Steps

• Create Dimensions in EPMA

• Create Profitability Application in EPMA• Required System Dimensions:

• Measures

• Allocation Type

• Required User Dimensions:• At least 1 POV Dim

• At least 1 Business Dim

• Optional Dimensions:• Alias

• Attributes

• Validate and Deploy to HPCM

Slide 20

HPCM Task Flow Overview

Slide 21

Define stages

Create drivers

Select drivers

Make assignments

Validate model structure

Generate Essbase Applications

Load data into Essbase

Run calculation scripts

Create reports

Validate calculations

Generate Calculation scripts

Validate the data

HPCM Model Build - Stages

Slide 22

Define Stages – Stages define available segments for data allocations.

Stage One: GL Accounts

Stage Two: Processes

Stage Three: Products

Stage Four: Customers

General ledger (P&L)

Departments, Activities

Products

Customers, Products

HPCM Model Build – Stages

Slide 23

Business Operations stage with two dimensions Departments and Activities.

HPCM Model Build - Drivers – How Much ???

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Stage One

Stage Two

Drivers provide the formulas to allocate values at source intersections to their assigned destination intersections.

Data

Driver 1

Driver 2Data Data

Driver Definitions

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How Salary is allocated -> Quantity * Rate

HPCM model Build - Assignments

Page 26Page 26

Assignments define where and how to move data from one stage to another.

HPCM model Build – Assignments Setup

Page 27Page 27

HPCM Standard Model

Page 28Page 28

DEMO

Key Features

Page 29Page 29

• Model / Driver Driven Approach

• Multi-Stage, Multi-Step Allocations

• Empowers users to execute/update allocation methodologies without depending on IT

• Traceability Maps

• Model Validation Reporting

Traceability

Page 30Page 30

• Provide transparency into revenue and cost allocations.

• You may trace backwards and forwards from any point in the allocation model

Model Validation

Page 31Page 31

• Model validation reporting helps ensure completeness of model.

• Stage Balancing follows the inputs and allocated outputs and include idle capacity and unassigned amounts

Thank You for Attending!

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Today’s Presenter:

Srinivas Salguti

ssalguti@finit.com

General Questions:

Greg Barrett

gbarrett@finit.com

Joe Mizerk

jmizerk@finit.com

Copy of the slides or Recording:

Email us for a copy of the slides or a link to the recording

insights@finit.com

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www.finit.com/webinars

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