introduction to hpcm
TRANSCRIPT
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
• 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
General Questions:
Greg Barrett
Joe Mizerk
Copy of the slides or Recording:
Email us for a copy of the slides or a link to the recording
Past webinars:
www.finit.com/webinars
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