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Utililizing Key Aspects Of Oracle Essbase To Run Finance In Sixth Gear
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Utililizing Key Aspects Of Oracle Essbase To Run Finance In Sixth Gear

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Examples of using Essbase to solve large number crunching needs.

Examples of using Essbase to solve large number crunching needs.

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  • Slide 1: Title Slide Insert session number, title of presentation, presenter’s name, position, and company name.
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  • 1. Session #2071A —Hyperion Essbase at AT&T Long Distance: Utilizing Key Aspects to Run Finance in Sixth Gear Curtis Neumann, CPA Associate Director, Financial Planning & Analysis AT&T Long Distance
  • 2. Agenda
    • Introduction
    • Company profile
    • Business case
    • Business Performance Management requirements
    • Solution – first to sixth gear
    • Results
    • Important success factors
    • Questions and answers
  • 3. Introduction
    • Responsible for Business Performance Management processes
      • Monthly financial reporting of profit and cost center results
      • Annual profit and cost center financial planning process
      • Customer and geographic studies for monitoring of divisional strategies
      • Quarterly regulatory reporting
      • Product and regional profitability studies
      • Net Present Value, IRR analysis, M&A, and business valuation
      • Ad hoc reporting
    Curtis Neumann – Associate Director, Financial Planning & Analysis
  • 4. AT&T Long Distance Division Profile
    • In 2000, this division began as a “Start-Up” of SBC Communications Inc., and was called SBC Long Distance
    • SBC Long Distance Mission:
      • Its initial strategy was to gain long distance customer market share by adding long distance voice and data products to SBC’s existing portfolio of telephony products
      • Result of the 1996 Telecom Act
    • Business launched in mid 2000, and grew revenue to several billion and 21 million customers within five years
    • At the end of 2005, AT&T and SBC Communications merged and named itself AT&T. SBC Long Distance became a division of AT&T. Division headquartered in Pleasanton, California
  • 5. Business Case
  • 6.
    • An Oracle general ledger with access to account balances via a browser tool
    • Plan data stored in Excel that linked with financial data exported from Oracle to create variance analyses
    • A manual Excel calculation of cost of goods sold (COGS) based on prior month vendor invoicing (Wiltel carries SBC Long Distance traffic and presents an invoice two weeks after the month-end close)
    • A weekly reporting of new customer counts prepared manually in Excel
    • Billing system data stored in an Teradata Electronic Data Warehouse (EDW)
    Business Case Business Performance Management History: A Start-Up before Hyperion Essbase, SBC Long Distance had:
  • 7.
    • Oracle general ledger browser reporting shortcomings
      • No flexible income statement trend
      • IT Oracle report changes were slow
      • Report subtotals could not be “drilled” to lower account levels
      • No ability to run ad hoc analysis
      • No plan data to calculate actual verses plan variances
    • Plan data stored in Excel had limitations
      • No central repository for data
      • Consistency problems amongst disparate files
      • No automatic data rollup
      • Lack of automatic refresh ability
      • Lack of consistent assumptions across the business
      • Scalability and flexibility limitations
    Business Case Resulting Challenges – Actual Results & Planning Process
  • 8.
    • Excel process to calculate cost of goods sold did not take into consideration current month traffic flows
      • Cost of goods sold booked, based on prior month data, was off because the business was growing 10% to 20% per month
      • The accrual reversals and booking of actual invoices caused COGS to fluctuate wildly month over month
    • Weekly reporting of new customer counts prepared manually in Excel was prone to spreadsheet errors
    • Business Objects (BO) was used to query the EDW system
      • BO queries were slow, had to be exported to Excel and then converted to pivot tables
      • Process was labor intensive
      • No central repository for data
    Business Case (continued) Resulting Challenges – COGS & Sales Reporting
  • 9. Business Performance Management Requirements
  • 10. Business Performance Management Requirements
    • Users needed single repository for monthly financial results that could immediately improve reporting flexibility and provide performance visibility to lower levels of detail
    • Financial analysts needed to create and modify their own ad hoc reports, customizing them to their particular responsibility areas
    • The business needed a “single version of the truth”
    • The finance group needed a process to control planning consistency across cost centers and provide adherence to planning assumptions
    • The solution needed to be easily scalable and flexible to improve productivity, while maintaining data accuracy
    “ One Stop Shop” needed for monthly financial reporting and analysis
  • 11. Business Performance Management Requirements (continued)
    • To improve accrual accuracy, Accounting required an automated standard costing solution to calculate the approximate COGS within 1% of the monthly vendor bill, with the capability to
      • Load thousands of input data points at multiple dimensions
      • Perform cost accrual computations, including averaging, multidimensional allocation and other math calculations, in a reliable sequential process to finally calculate costs (= average cost per min. x number of allocated network minutes)
      • Be repeatable every month, and be rerun quickly if source data was bad
      • Run the process end-to-end over a three-hour duration on the first workday of each month
    Excel by itself was not suited for large amounts of input
  • 12. Business Performance Management Requirements (continued)
    • Financial analysts needed to have access to aggregated customer billing records to understand business trends and be able to model from that operational information
      • Customer revenue by various dimensional slices
    • Corporate development needed data for strategic initiatives
      • Geographic data to isolate lower performing cities
    Operational data access was needed to help explain financial results
  • 13. Solution – First to Sixth Gear
  • 14. Solution – First to Sixth Gear
    • Most important was that it had features and functionality the business needed
    • Used Hyperion Essbase in other positions and had good experiences with it
    • Hyperion Essbase had a long history of customer acceptance and Hyperion was committed to continued Business Performance Management excellence and market leadership
    • For the end user, the Hyperion Essbase add-in could be incorporated into existing spreadsheets, and it was easy to learn
      • No more massive pivot tables which had inherent risks
    • Security was robust, but simple to maintain
    • Last but not least, I didn’t need IT’s help to install or maintain the software (Hurrah)
    Hyperion Essbase selected as best alternative in 2000
  • 15. Evolution of Hyperion Essbase 7.X – First to Sixth Gear * MDX = MultiDimensional expressions Solution – First to Sixth Gear (continued) Development Year Complexity & Value 2000 2006 Operational Financial 5 th Gear: Essbase Integration Services 4 th Gear: Aggregate storage cubes for customer and geographic analysis 6 th Gear: MDX* Queries 5 th Gear: Hyperion Essbase Integration Services 3rd Gear: Partitioning of data between block storage cubes 2nd Gear: Calculation scripts to write back to block storage cube 1st Gear: Basic Rollup Reporting Cube – General ledger data along with plan data
  • 16. Solution – First to Sixth Gear (continued)
    • First developed general ledger and plan rollup master cube (orange)
      • Plans compiled with standard spreadsheet templates
      • Tip: To control cube sparsity, minimize member redundancy from ERP sources
      • As Master cube got too large, performance degraded and monthly calculation time increased to 1 hour
    • So, created new close cube (dark blue) with parent plan data partitioned from master cube
      • Used Replicated Partitioning
      • Close cube calculates in 20 minutes for a 66% improvement
      • Excel retrievals much faster
    1st gear: Basic Rollup Cubes & 3rd gear: Partitioning Fast
  • 17. Solution – First to Sixth Gear (continued)
    • How many of you are aware of Finance organizations that use multiple linked spread-sheets to calculate?
    • Costs per widget
    • Revenue per widget
    • Expense per headcount
    • Or any other kind of metric
    • What you see to the right is
    • just the inter-spreadsheet
    • part
    2nd gear: Calculation scripts & 3rd gear: Partitioning
  • 18. Solution – First to Sixth Gear (continued)
    • This spreadsheet represented only one region or 20% of the cost per minute calculation
    • Several hundred pivots
    • 200 columns
    • 1000 rows
    • Links = 9.9 x 10 ?
    • Incredible amounts of work to add products, etc.
    • What would be a better solution?
    2nd gear: Calculation scripts & 3rd gear: Partitioning
  • 19. Solution – First to Sixth Gear (continued)
    • In addition to its uses for planning and reporting, Hyperion Essbase is a great number-crunching machine
      • Tip: Don’t try to perform all calculations in one cube
      • Used replicated partitions to copy relevant calculated numbers to the main cube (dark grey)
      • Took advantage Hyperion Essbase robust calculation function library
    • Benefits
      • Efficient & accurate
      • Manageable process
      • Can run parts in minutes or the whole application in < 1 hour
    2nd gear: Calculation scripts & 3rd gear: Partitioning
  • 20. Solution – First to Sixth Gear (continued)
    • Enterprise customer cube reports yield from largest business customers
    • Hyperion Essbase 7.X Aggregate Storage is a powerful alternative to relational reporting practices
    • Benefits
      • Lots of dimensions
      • Quick loading
      • Fast materialization
      • Lightening fast retrieval
    4th gear: Essbase Aggregate Storage for customer analysis
  • 21. Solution – First to Sixth Gear (continued)
    • Wirecenter cube shows product revenue trends by region, state or city
    • Tips
      • Hyperion Essbase Integration Services allows for automatic outline updates and data loading
      • MDX a better alternative to using Excel and drilling to level -0-, because Excel cannot drill down on and display very large outlines
    4th gear: Hyperion Essbase Aggregate Storage - geographic analysis
  • 22. Solution – First to Sixth Gear (continued)
    • As operational data gathering and the number of cubes increased, Hyperion Essbase Integration Services was launched
      • It facilitates outline maintenance and data loading by connecting directly to SQL server tables
    • Benefits
      • Allows cubes to be created very quickly from relational tables
      • Ideal for Aggregate Storage cubes that have very large outlines and millions of records to load
    5th gear: Hyperion Essbase Integration Services
    • Tips
      • Aggregate detail transaction data onto a staging server, like SQL server first
      • The parent/child recursive hierarchy works best
  • 23. Solution – First to Sixth Gear (continued)
    • MDX is ideal for use to extract data from aggregate storage cubes
      • Excel is unable to zoom in on large dimensions (not enough rows)
      • Can apply criteria to filter data similar to SQL
    • Tips
      • Run in MAXL Shell
      • Use a text editor to prep output for Excel
      • Better to have a quad processor server for better performance
    6th gear: MDX Queries
  • 24. Results & Success Factors
  • 25. Results
    • Hyperion Essbase 7.X has provided AT&T Long Distance with huge productivity gains in financial and operational reporting, planning, and analysis
    • Since the software is relatively easy to use, a simple cube can be created the same day the software is installed
    • Hyperion Essbase is very functional, flexible, scaleable, and customizable to the point of replacing dozens of spreadsheets
    • Can be deployed on a modular basis
      • First, financial reporting implementation is “low-hanging fruit” (1 st – 3 rd gears)
      • Then, replace spreadsheet intensive financial planning / modeling (2 nd – 3 rd gears)
      • Lastly, integrate with relational sources to bring operational reporting into the fold (4 th – 6 th gears)
  • 26. Success Triangle Results Processes Relationships Success Factors
  • 27.
    • Most important factors
      • Sponsorship from CFO and/or leadership – give him/her access
      • Personally feel confident about change
      • Communicate effectively to user community, attempting to gain as much support as possible
      • Insure IT is on board and understand its role
    • Attack “low-hanging fruit” first
      • Roll out some cubes that will create immediate value for the Finance organization
      • Create leverage from those that understand value of best-in-class financial software tools
      • Continue rolling out new applications to help users
    • Continue to innovate
      • Upgrade as often as possible to gain access to new functionality
    Success Factors (continued)
  • 28. Questions and Answers ?
  • 29. Session #2071A —Hyperion Essbase at AT&T: Utilizing Key Aspects to Run Finance in Sixth Gear Curtis Neumann, CPA Associate Director – FP&A, AT&T Long Distance Contact Info: [email_address] or 925.548.7161 Please Complete Your Session Evaluation