new methodology on using enterprise performance management · oracle’s enterprise performance...

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New methodology on using Enterprise

Performance Management

2

Oracle’s Enterprise Performance Management SystemComplete, Integrated, Open

OLTP & ODSSystems

Data WarehouseData Mart

PackagedApplications(Oracle, SAP, Others)

ExcelXML/Office

BusinessProcess

OLAPSources

Exadata Unstructured & Semi-Structured

BI Server

Common Enterprise Information Model

EssbaseDimension

Management

Predictive

Analytics

ERP

Analytics

Strategy

Management

Financial Close

and Reporting

Planning &

Forecasting

Profitability

Management

CRM

Analytics

Industry

Analytics

Interactive Dashboards

Reporting &Publishing

Ad-hoc Analysis

Detect& Alert

Office Integration

Search EmbeddedDataIntegration

Mobile Scorecards Collaborate

3

Oracle Hyperion EPM 11.1.2

Release Summary

• Hyperion EPM R9.3 (2007)

• Hyperion EPM R11.1.1 (2008)

• Hyperion EPM R11.1.2 (2010)

Extend

Planning

Across the

Enterprise

• Major Release of Hyperion Planning • New Public Sector Planning & Budgeting module• Enhanced Hyperion Profitability & Cost Management

application

Streamline

Financial

Close and

Reporting

• New Hyperion Financial Close Management Application• New Hyperion Disclosure Management Application• New Oracle Essbase Analytics for Hyperion Financial

Management• OBIEE and Hyperion Financial Management integration• Integration between Hyperion Financial Management and

Oracle GRC

Deliver EPM

Value Faster,

Reduce TCO

• Enhanced Hyperion Data Relationship Management module

• Enhanced Oracle Hyperion EPM integration with Oracle Fusion Middleware

• Enhanced Integration with Oracle E-Business Suite and PeopleSoft Financials and HCM

• UPK pre-built content

• 3rd major release since acquisition

• 4 New Products

• 250 New Features

• 502 Customer-Driven Enhancements

Copyright © 2011, Oracle and/or its affiliates. All rights reserved.

4

End to End Close

5

Sub Ledger CloseGeneral

Ledger CloseData

AssuranceConsolidation

Internal Mgmt Reporting

External Financial Reporting

Filing

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

Perform Reconciliations

• Bank Reconciliations

• Standard Account Recon

• Sub Ledger Recon

Post 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 and calculations (i.e. CTA, FASB, KPI‟s, FX, Retained Earnings, Topside Entries etc.)

Close Process and Key Activities

6


Ledger CloseData




Filing

Close Process Issues

• Lack of visibility to tasks across financial systems, departments, regions, etc.

• Manual spreadsheets are used to manage the financial close calendar

• „Hope‟ and email are core to the process

• Account reconciliations are managed manually

• Task management is fragmented and manual

7

Critical Components to Implement

Financial Close Best Practices

FinancialConsolidation

DataAssurance Oracle Disclosure

Management

XBRL/SEC

Regulatory Reporting

Financial andMgmt. Reporting

ERP: Oracle, SAP, Legacy, Other

TaxFiling

Oracle Financial Close Management

CFO Dashboard

TaxCalculations

Transactions Reporting

Governance, Risk & Compliance

8

Streamline the Extended Close Process

with Financial Close Management

• Close Process Analysis,

Trending and Improvement

• Process Monitoring

• Active Calendar

• Single Task List

• Automated workflow

• Ensure Compliance

• Email Notifications

• Account Reconciliations *

* Delivered in V2

9

TASK MANAGEMENT

PROCESS MONITORING

ACCOUNT RECONCILIATIONS *

ACTIVE CALENDAR

Active integration with EPM and ERP systems

Executive Dashboard Views

Centralized web based task management and collaboration

Automation through matching capabilities and integration with all sources

Oracle Financial Close Management

Streamline the Extended Close Process

* Delivered in V2

10

Key Benefits

• Financial Close Management

– Collapse activity timelines by removing process „windows‟

– Balance and evaluate workload across resources

– Integrated Close solution from Sub Ledger to Regulatory

Filings *

– FCM delivers process visibility and task management across

close

– Delivers process risk assessment in near real-time *

* V1 Full EPM integration, ERP integrations are limited to url and web service, V2 ERP complete

11

HFM 11.1.2.2

Configurable Dimensionality

• Unlimited Custom

Dimensions

– Additional custom

dimension to existing

application

– Ability to configure size of

custom dimension

– Flexible dimension name

and alias for custom

dimension

12

* Available with 11g

Hyperion Financial Management 11.1.2.1 OBIEE

connection to HFM


13

• Create and populate relational tables with the HFM

data

• Complete star schema with metadata tables

• Fastest HFM extraction with flexible selection logic

• No impact on the consolidation servers during extract

Essbase Analytics Link for HFM (EAL)

Near Real Time

Synchronization

HFM Database

Server

D

W

Fast

Extract

ETL

Relational

Star Schema

Other

Sources

14


Ledger CloseData




Filing

Document Management and Creation Issues

• Manual management and creation of critical documents (Debt Covenants, 10Q/K, Board Package and Presentation, etc.)

• Gathering and managing commentary is manual

• Adjustment of financial data is manual

• MS Word documents sent to 3rd party who reformats and files with EDGAR (error prone)

• MS Word files are converted to XBRL by 3rd parties or manually (error prone)

• Adhoc process and limited control

15

Ensure High Quality Report Submission

with Disclosure Management

• Collaborative document

creation *

• Document Versioning *

• Workflow and approvals *

• MS Office centered

• Multiple report formats

(Edgar, XBRL, etc.) *

• Embedded XBRL

• Seamless Data Integration

* Delivered in V2

16

Oracle Financial Close Analytics Dashboard*

• Pre-Built Analytics to reduce complexity and TCO for

our customers

• Extend Applications with Best in Class BI Technology

• Integrate BI with HFM

and FCM

* To be released

1

2

3


17

Financial Close Analytics Dashboard Contents

• Executive– Gross profit by Region, Income by Region, Net Cash Flow, P & L by products

• Process Management– PM Metrics, PM Trend Analysis, PM Overall\Entity Status

• Financial Close Schedule Summary– Schedule Summary, Schedule Graph, Schedule Milestones\Roadblocks

• Performance Indicators– BS Ratios YoY comparison table, BS Ratios components, BS Ratios Trend Analysis

• Profit and Loss– Summary Income Statement, Variance Analysis, Trend Profit and Loss

• Gross Profit – Variance Analysis, Gross Profit by Product, Trend Gross Profit

• Balance Sheet– Consolidating BS, BS metrics, Variance Analysis, Trend BS

• Cash Flow– Cash Flow Summary, Consolidating Cash Flow, Variance Analysis

• Currency Analysis– P & L Variance Analysis, BS Variance Analysis, CF Variance Analysis


18

First to Report on the Dow Jones

Before

• 20 days to close

• Lengthy year-end reporting

• Costly financial reporting

process

• 78 charts of accounts

• Widely varying reporting

definitions and procedures

After

• 5 days to close

• Global consolidation across 58

lines of business

• Global forecasting and reporting

solution for 1,000+ users

• Minutes to access information

The world‟s leading producer of primary aluminum with $23.5 billion in revenues with operations in 43 countries and 350 locations. Alcoa has over 131,000 employees.


19

End to End Planning

20


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

21

Financial Modeling is Highly Fragmented

• Complex spreadsheet models

• No consolidated view

• Spreadsheets are error prone

• Limited accounting integrity

• Lack of integrated models make

scenario analysis cumbersome

• Long simulation times

Treasury

Board of DirectorsSenior Management

Banks Investors AcquisitionsDivestitures

Long-Term Planning

Corporate Development

22


Strategic Planning Best Practices

Predictive Modeling & Simulation

CorporateDevelopment

Value Management

Long-Term Financial Planning

Treasury Strategies

Planning, Budgeting & Forecasting

What-if Analysis

23

Pre-built Financial Logic & Forecast Tools

• Pre-built, fully integrated financial statement foundation

• Pre-built forecast methods and formula functions

• What-if Analysis toolkit

• Consolidation intelligence

• User-defined reports for benchmarking analysis

24

Investment Analysis Tools

• Pre-built valuation logic

(NPV, IRR, etc.)

• Purchase accounting for

acquisitions

• Goal-Seek

• Movable Deal Period

• Include/Exclude option

• Fiscal year-end conversion

• Divestiture logic

25

Treasury Toolkit

• Calculates net cash

surplus or deficit from

multiple models and

scenarios

• Funding Options tool to

re-allocate surpluses and

fund deficits

• Debt scheduler

• User-defined reports to

monitor covenants, credit

ratings, and earnings per

share

26

Apply Monte Carlo Simulation To Measure the

Effects of Uncertainty

• Assign probability distributions to uncertain assumptions

• Run thousands of simulations

• Analyze range of outcomes and probabilities

• Assess model sensitivities

27

Align Planning Processes

Corporate

Development

Long-Term

Planning

Value

Management

Treasury

Strategies

Seed Budgets with

Strategic Targets

Update

Strategic Plans

with Latest

Forecasts

Periodic

Forecasts

Annual

Budget

Capital

Planning

Workforce

Planning

Strategic Planning

Planning, Budgeting and Forecasting

28

Measure the Financial Impact of Key Business

Strategies

1 Project anticipated financial results

3 Optimize capital structure

5 Revise forecasts from detailed business plans

2 Invest/divest for future growth

4 Manage risk and uncertainty in your plans

29

Overcome A Financial Crisis

$22 Billion global provider of power and automation technologies

Before

Lost investment-grade credit rating

Needed to recapitalize balance sheet

No cash flow modeling capability

No simulations at the divisional or

business unit level

After

Credit rating back to investment grade

$4 Billion debt restructuring

Simulate capital structure and cash

flow

97% accuracy in net income projection


29

30

Robust End User Experience

Hyperion Planning 11.1.2

• Powerful Process

Management

• Validation of plans including

color coding, notifications and

approvals

• Sophisticated Web and MS

Excel capabilities

• Comprehensive support for

MS Office; Excel, Word,

PowerPoint and Outlook

• Task Lists and user actions

within MS Outlook and Excel

• Enhanced reporting and

budget books

31

Hyperion Planning 11.1.2.2

Web Forms with Graphs


32

Hyperion Planning 11.1.2.2

New Predictive Planning Capability

• Statistical-based forecasting

is a feature, not a stand-alone

product

• Usable by all business

planners

• Leverage proven methods

and techniques

• Improve accuracy through

rigor and standardization


33

Profitability and Cost

Management

34

Others require analysis to appropriately assign

MaterialDirect Labor

What are the Contributors of Cost?

Some are obvious and relatively easier to assign

Production Overhead

Product Management

Customer Service

Administrative Support

Quality Service

Sales/ Marketing

Support

Organizations are seeking flexibility to assign and transform these costs!

Utilities

35

…Supports all Levels of Costing and Profitability

Objectives

Cost, Revenue and Profitability Analytics

Cost and Profitability Reporting

Cost and Revenue Allocation

Calculations

AllocatePerformance Improvement

Cost and Profitability Simulation

Analyze

Who are the most and least profitable customers?

Why are customers profitable or unprofitable?

What can we do to improve the situation?

What is a customer‟sprofitability?

36


Profitability and Cost Management Best Practices

Cost, Revenue and Profitability Analytics

Cost and Profitability Reporting

Cost and Revenue Allocation

Calculations

AllocatePerformanceImprovement

Cost and Profitability Simulation

Analyze

Profitability and Cost Management

Common Reporting & Interaction

37

Key CapabilitiesImprove Profit Decisions Through Better Visibility

• A business user application to

build models that:

• Accurately assign, measure, and

manage costs and revenues

• Use any methodology to transform

financial data through multiple stages

• Compute costs and profitability for

multiple business objectives:

• Customers, products, services,

activities, etc.

• Use scenarios to evaluate alternate

approaches

• Leverage Essbase‟s powerful

reporting and analysis

38

Multi Stage• Up to 9 Stages

• 3 dimensions per stage

• Intrastage supported

• Direct Contribution data always

generated

• Genealogy optional

• Layers for Cost and Revenue

Detailed Profitability• 2 Stages

• 5 Dims Source, 20 on destination

• Intra-stage not supported in this

release

• Direct contribution data optional

• No Genealogy

• No Layers – any financial

element type allowed


HPCM 11.1.2.2

Multi Stage vs. Detailed Profitability

39

Financial Healthcare Comm &

Media

Hi-Tech

Mfg &

Distribution

RetailDefense /

Govt / Non

Profit

Services

HPCM usage in MY vertical is already a realityHPCM has over 70 customers now

40

Data Relationship

Management

4141

Data Governance

Operational

Systems

PeopleSoft

Siebel

SAP

Custom Apps

External AppsBudgeting

Analytical

Systems

DW

BI, Datamarts

Planning

Consolidation

Oracle Fusion Middleware

Application Integration Architecture

Analytical

MDMOperational MDM Apps

Cli

en

ts

Su

pp

lie

rs

Fin

an

ce

, K

PIs

OracleDRM

Oracle

Customer Hub

Dim

en

sio

ns

Em

plo

ye

es

Oracle

Product Hub

Pro

du

cts

Eq

uip

em

en

t

Sit

esOracle

Site Hub

Data Relationship Management (DRM)

The most complete MDM offering in the market today

42

Typical Dimension Maintenance

The business problem

EssbaseEssbaseBusiness

Intelligence

Planning

Corp

Oracle

APAC

Custom

LATAM

Peoplesoft

EMEA

SAP

E-Mail

Review

Spreadsheet

ETL

EAI

• Accounts

• Entity

• Cost Center

• Product

• Location

• Channel

DW

Spreadsheet

BusinessUser

IT Admin

OracleAdmin

PlanningAdmin

EssbaseAdmin

Analytic Applications• Different people involved

• Inevitable manual processes

• Error-prone, inconsistent

• No way to audit

• No way to rollback changes

• Time and resource consuming

• Updates “interpreted” by systems experts

43

So … What is the Business Impact?

• Business measures that should be the same are not

• Uncertainty on accuracy of reporting

• Uncertainty if discrepancies are caused by bad data, different definitions, human error…

• Month after month, expensive time and effort spent researching and reconciling

• Audit / compliance difficulty, compliance implications for legal reporting


Intelligence

Planning

Corp

Oracle

APAC

Custom

LATAM

Peoplesoft

EMEA

SAP

ETL

EAI

• Accounts

• Entity

• Cost Center

• Product

• Location

• Channel

DW

BusinessUser

Analytic Applications

YTD

Revenue

$13,500,322

YTD

Revenue

$12,994,332

YTD

Revenue

$13,509,999

YTD

Revenue

$13,599,322

YTD

Revenue

€ 9,322,219?

?

?

44


Intelligence

Planning

Corp

Oracle

APAC

Custom

LATAM

Peoplesoft

EMEA

SAP

ETL

EAI

• Accounts

• Entity

• Cost Center

• Product

• Location

• Channel

DW

Analytic Applications

Enterprise Dimension Management

The Hyperion DRM solution

Hyperion DRM

BusinessUser

• Publish changes for each specific consuming system as needed, when needed

• Each system receives required content and structure

• “Alignment” of accounts trees assured

• Same process can be leveraged for other dimension

45

“Governed” Dimension Maintenance

High maturity

Enterprise Applications

CC

GL

Org

En

tity

Tim

e

Pro

d

G/L Planning Consol Reporting Analytics DW

Hyperion DRM

Standard user interface for all dimension maintenance

Enterprise dimensions aligned – consistent processes – delegated governance

46

G/L System

Oracle

Hyperion DRM

G/L System

Co

nso

lid

ati

on

Rep

ort

ing

Data

Ware

ho

use

Systems of entry:

• For G/L accounts: G/L System

• For all other dimensions: Oracle Hyperion DRM

Oracle Hyperion DRM is System of Record for all

Dimensions

High-level architecture

System of record, system of entry?

Oracle

Hyperion DRM

G/L

Syste

m

Co

nso

lid

ati

on

Rep

ort

ing

Data

Ware

ho

use

Oracle Hyperion DRM is:

• System of Entry

• System of Record

47

FINANCIAL SERVICES

Mature Product, widely deployed

PUBLIC SECTOR LIFE SCIENCES AND HEALTHCARE

RETAIL

HIGH TECHNOLOGY

MANUFACTURING & DISTRIBUTION

COMMUNICATIONSMEDIA & UTILITIES

http://www.symantec.com/index.jsp

http://www.dell.com/content/default.aspx?c=us&cs=19&l=en&s=gen

http://en.wikipedia.org/wiki/Image:Raymond_James_Logo.JPG

http://en.wikipedia.org/wiki/Image:Logitech_logo.png

http://www.officedepot.com/index.do;jsessionid=0000kbQutKXlIT7IenmMakVbuqX:10gg9eb56

http://www.mtn.co.za/default.aspx

48

“Oracle's [Hyperion] Data Relationship Management solution

provides one single application interface that enables

centralized business maintenance of Dell's master data and

global hierarchies. Data is now governed and distributed

from one source which promotes consistent and reliable

reporting across the organization”

Kristin Pollock, Product Manager, Global Finance, Dell Inc

What Dell Is Saying

49

Enabling Consistent Reporting

Oracle Hyperion Data Relationship Management

$60+ billion technology company

Over 82,000 employees

EBS Financials & Teradata warehouse

Before

• Reporting hierarchies created

redundant, inconsistent data

structures across applications,

regions, and segments, resulting in

various versions of the “truth”

• Decentralized technology structure

requires independent maintenance

processes and onerous

synchronization routines

• Dell data warehouse and financial

management system overloaded as

reference data sources

After

• Implemented Hyperion DRM to master

chart of accounts, entities, accounts,

projects, & products

• Provides a single, scalable

maintenance interface to support

10,000+ changes each month to

Dell’s global hierarchies

• Enables consistent distribution of

reporting master data

• Enables global visibility, reduction in

manual processes, improved data

integrity, reduced reconciliation effort

50

Summary

51

Oracle EPM Connects Management Processes

Common Integration & AnalysisData Quality and Consistent Dimensions

Common Reporting & Interaction

Strategy Management

Financial Close

Planning & Forecasting

Profitability Management

52

Oracle Hyperion EPM Applications RoadmapPlanned content highlights

Hyperion EPM 11.1.2.2

• Hyperion Planning

• PSB Commitment control

• Predictive Planning

• Project Planning module

• HSF – Smart View

• Hyperion Financial Management

• Configurable Dimensionality

• Financial Close Analytics

Dashboards*

• Financial Close

• Account Reconciliations

• EBS/Fusion Integration

• Disclosure Management

• Edgar-ready format*, SEC validation*

• Collaborative document authoring

• Profitability & Cost Mgmt.

• Micro-costing

Hyperion EPM 11.1.2.1 Available

• Upgrade from prior releases

• iXBRL HMRC Income Tax Returns

• PSFT & Financial Close Mgt. integration

Hyperion EPM 11.1.2

• New Financial Close Mgt. Product

• New Disclosure Mgt. product

• New Public Sector Budgeting module

• Hyperion Planning

• Configurable & data driven workflows

• Conditional formatting

• Smart View extensions

• Oracle tech stack optimization

Available

FY13FY12FY11

* Available earlier

Target end CY11

"This information is not a commitment to deliver any material, code, or functionality. The development, release,

and timing of any features or functionality described remains at the sole discretion of Oracle"

53

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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