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  • EPM is about three areas: Common Information Access: MS Office, Web, Reporting and Alerts EPM System Strategic Planning Planning & Forecasting Financial Close Profitability Management Common Integration & Analysis: Common Administration, Data Quality (Common Calculations and FDM), Dimension Management (consistent dimensions) and Oracle Essbase
  • As an ongoing process, Profitability and Cost Management integrates with the organization’s EPM processes. It uses results from its world-class close process as the source of its financial data. Models combine behavioral data with this financial data to reasonably and defensibly calculate the cost allocations. These allocations reveal information about costs and profitability that were previously not well understood, e.g., product or customer profitability. The model results provide better information divulge what drives costs and to highlight areas of cost sensitivity. This improved understanding of costs underpin the evaluation of what-if scenarios provide support for management proposals. New scenario results can be support the detailed planning and budgeting processes.
  • HPCM takes advantage of the underlying Essbase technology and its strengths for calculation and reporting to generate profitability and cost algorithms from model relationships defined by the end user using terminology comfortable to the end user. Profitability and Cost Management information can satisfy many levels of customer requirements: Allocation calculations can be used to valuate the organization’s inventory (i.e., for fully-absorbed product valuation) Cost and Profitability Reporting would reveal which customers or products are profitable (or unprofitable) Reviewing costs in a variety of ways (e.g., costs by activities, cost by resource pools) provided better analytics Using these results and models to simulate anticipated results leads to organizational improvement opportunities
  • Hyperion Profitability and Cost Management provides these world-class capabilities, but in an environment that is business-user managed. The models are defined using concepts and terminology that is comfortable to the business user. The application takes care of generating the underlying technology required to perform the allocations, analytics and scenarios.
  • Reliability: Provides the organization with the confidence to support decisions based its costing and profitability models Agility: Provides the ability to quickly evaluate the impact of proposed changes in the business operation Relevance Allows the organization to focus on those areas that will provide the biggest performance improvements Bank of the West uses its costing model to better understand the consumption of its internal costs by departments. By isolating the behavior of costs, they are better prepared to react to changes in its business model. Their model will allow them to actual evaluate potential business operational changes prior to actually investing in them.
  • Statutory reporting identifies an organization’s overall profitability … (usually summarized by account) at an aggregated level: For organization For business type or department But this summarized data often serves as a primary source (or validation) of data for cost and profitability analysis
  • Statutory reports, by themselves, don’t provide managers with a great deal of insight to answer operationally-focused questions – those that provide support for decisions that will impact the organization’s operational bottom line. To answer these type of questions, the organization needs to look at costs (and profit) in different ways – not just as a summarization of account performance.
  • The Cost / Profitability Solution starts with traditional organizational results, but supplements these financial data with “Behavioral Data”. Behavioral data may consist of operational results and statistics or any other performance measure that will help the organization to better understand financial interrelationships within the organization. These financial and operational are combined to create meaningful allocation models – e.g., to illustrate how costs by account can be transformed to costs by activity and, ultimately to costs (or profit) by product or customer. The allocation model results in new ways of looking at costs and provides better information than statutory reports, by themselves. Here we see reports illustrating profitability by customer, and product profitability by the consumed costs of activities – results that are not usually available from statutory reports.
  • Many organizations rely on tools that are not the best for creating and maintaining their cost and profitability models. Tools like spreadsheets or custom programmed applications may produce quick first results, but models using these tools requires too much time and effort to maintain going forward – and the organization becomes hostage to the technical expertise required to maintain these calculation models. Some of the symptoms exposed by using inappropriate tools include: Flexibility – lack of responsiveness to changes There needs to be a translation of business requirements to the technical requirements of the solution Changes to the way the business operates do not get reflected in the model because the technical resources are unavailable Time – takes too long, missed opportunities and obsolete plans The need to translate business requirements to technical requirements creates delays in acquiring new information from the model Can lead to missed opportunities Cost – many wasted resources, questionable benefits Too much time spent gathering information Limited time modeling and analyzing information Quality – data integrity, lack of standardization and communication Model becomes a “black box” to the business user; no simple way visually confirm the allocations through the model Errors in excel spreadsheets or programmed solution are difficult to uncover
  • A World-class Profitability and Cost Management solution includes these capabilities.
  • Starting with the organization’s financial and operational knowledge, allocation models are built to assign costs through various, meaningful stages of transformation.
  • Starting from the objectives of the model, the stages of allocations are defined. The stages define the sequence that the allocations will be performed, but they also define the different transformations that the costs undergo. In this example, costs are collected in Stage 1 by Accounts within Departments. In Stage 2, these costs are transformed to allow them to be viewed as cost by activities. Stage 3 shows costs to make products, while stage 4 shows costs to serve clients. Stage 5 presents the fully absorbed costs by customer and products.
  • Drivers define the methods that the model will use to transform selected source cost and revenue values to the destination cost and revenue values. Drivers can use one of the several pre-defined calculation templates, or can be custom developed.
  • Once the drivers are defined, source costs are assigned to destinations.
  • A properly defined model will reveal information that was previously unavailable to the organization: Profitability of customers, products or services, etc. Cost of activities or resource pools Costs to manufacture products, costs to serve customers.
  • Traditional, statutory reports will reveal costs and profitability summarized by accounts.
  • New information revealed by a Profitability and Cost Management solution could include: Product , service or customer profitability
  • A properly defined model will reveal cost and profitability behavioral information.
  • How activity costs are consumed by customers (or products / services)
  • How resources (and their associated costs) are being utilized by the organization.
  • A properly defined model can be used to evaluate the impact of proposed business changes. Profitability of customers, products or services, etc. Cost of activities or resource pools Costs to manufacture products, costs to serve customers.
  • Scenarios can be evaluated and results compared to each or to the actual results. E.g., In the Idle Labor scenario, management wants to understand the impact that “over hiring” has had on the profit. What if they had more fully utilized the additional workforce? By setting a driver value in PCM to simulate costs where the Scottsdale labor is 100% utilized, we can see that the total expenses could be reduced by $ 12,417. This reduction would drive straight to the bottom line increasing Eden’s profitability to $ 13,592 from $ 1,175. Eden now recognizes the potential of filling that idle labor with constructive work.
  • A World-class Profitability and Cost Management solution includes these capabilities.
  • HPCM takes advantage of the underlying Essbase technology and its strengths for calculation and reporting to generate profitability and cost algorithms from model relationships defined by the end user using terminology comfortable to the end user. Profitability and Cost Management information can satisfy many levels of customer requirements: Allocation calculations can be used to valuate the organization’s inventory (i.e., for fully-absorbed product valuation) Cost and Profitability Reporting would reveal which customers or products are profitable (or unprofitable) Reviewing costs in a variety of ways (e.g., costs by activities, cost by resource pools) provided better analytics Using these results and models to simulate anticipated results leads to organizational improvement opportunities
  • Bank of West is very committed to understanding what drives its cost and profitability, but are constrained by IT’s ability to support complex models. They sought a profitability and costing tool that would reduce the demands on IT – a business user managed tool. The chose HPCM. The tool satisfied their requirements and will allow them to grow through the multiple levels of use – calculation, reporting, analysis and management of cost and profitability.
  • These organizations have selected HPCM as their tool for providing their analytics for cost and / or profitability. Shared Services Costing – costs of internal, business support activities (e.g., HR, IT, etc.) and how they should be allocated to products / customers. Pricing Contracts – knowing the fully absorbed costs for a product or service allows the organization to determine pricing (for example, reflect a certain margin) Regulatory Reporting – for regulated industries or for those who are reimbursed based on their costs Cost to Serve – the process of determining the costs assigned to each customer (or customer type)
  • The new Hyperion Profitability and Cost Mgmt application is a part of the EPM platform. All of the PCM functionality is accessed through the Workspace. It is part of the upcoming (what we have been calling internally) the Kennedy release, which is now the Fusion 11.1.1 release.

1. hpcm introduction 1. hpcm introduction Presentation Transcript

  • Profitability and Cost ManagementIntroduction & Overview
  • Disclaimer The following is intended to outline our general product direction. It is intended for information purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any material, code, functionality or platforms, and should not be relied upon in making purchasing decisions. The development, release, and timing of any features, functionality or platforms described for Oracle’s products remains at the sole discretion of Oracle. Oracle may not release the functionality or products discussed on any additional platforms in the future.2 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Agenda • What Analysts are Saying About Profitability and Cost Management • Solution Overview • Overview Profitability and Cost Management • Delivering World Class Profitability and Cost Management • HPCM Value Proposition • A Simple Example • Q&A3 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Understanding Profitability Exposes Hidden Cost Behaviors “…Technology vendors are spending, on average, 19% of their selling, general, and administrative (SG&A) costs or $135,262 per quota- carrying salesperson in support-related activities. Few are aware of this enormous amount because the costs are hidden .” “Uncovering The Hidden Costs Of Sales Support” Scott Santucci - April 13, 20094 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Companies are Using the Wrong Tools to Effectively Analyze Profitability “Most companies are not using the right tools…spreadsheet based models are hard to change, error prone and difficult and time- consuming to use. Relying on desktop spreadsheets can keep your company from doing the kind of analyses it needs to do when it needs to do them...” Accurate Costing Is Key to Profitability Ventana Research, 20085 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> Solution Overview6 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Oracle EPM Connects Management Processes Common Reporting & Interaction Strategic Planning Planning & Forecasting Financial Close Profitability Management Common Integration & Analysis Data Quality and Consistent Dimensions7 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • World Class Profitability & Cost Management Process to support EPM Financial Data Drivers of New from Close Process Cost Drivers to Conduct Business Behavioral Data from ERP Profitability Decision Update Data Collection Allocations Analysis Support Plans ?? ?? Customer Profitability What-if Full Product Scenario Costing Results8 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Critical Components to Implement Profitability and Cost Management Best Practices Who are the most and least Why are customers profitable customers? profitable or unprofitable? Common Reporting & Interaction Cost and Cost and Profitability Cost, Revenue and Cost and Profitability Revenue Allocation Reporting Profitability Analytics Simulation Calculations Evaluate business Profitability and Cost Management options through scenarios. Organizational Allocate Analyze Improvement9 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • User Managed Profitability and Costing Models • Determine which products / customers / services are PROFITABLE and which are not • Discover which DRIVERS impact Costs and Profitability • Flexible and powerful profitability reporting and ANALYSIS • MODEL scenarios to evaluate action for improving profitability10 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Hyperion Profitability and Costing Models Provide: • Reliability • Visibly defensible profitability and cost Senior Management results • Agility • Timely reflection of FP&A organizational changes • Relevance • Allocate resources to the most important opportunities Operational Financial Revenue & Results Results Cost Models11 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> Overview Profitability and Cost Management12 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Statutory Reporting Provides a Limited View of Profitability General Ledger Financial transactions (Account Balance) Organizational P&L Financial Accumulator Bottom-line Data Results13 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Statutory Reports Don’t Answer Critical Business Questions Like… • What defines a profitable customer? • What is the profit contribution margin 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?14 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Costing / Profitability Solution Organizational P&L Behavioral Data Product P&L by Activity Raw Meaningful Decision Data Allocations Support15 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Inefficiencies Caused by Using Wrong Tools Customer • Flexibility – lack of Relationship responsiveness to changes Marketing Resource • Time –missed opportunities Plans Utilization and obsolete plans Senior Management • Cost – wasted resources, questionable benefits Annual Plan & Forecast • Quality – lack of Headcount standardization and Plans FP&A communication Departmental Revenue & Cost Plans Models16 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> Delivering World Class Profitability and Costing17 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Best Practices For World Class Profitability and Cost Management 1 Create meaningful and defensible cost models 2 Examine details of profit and cost 3 Identify causality of costs and profit 4 Evaluate scenarios for performance improvement18 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 1 Create meaningful and defensible cost models • Use industry knowledge and activity experience: • To allocate costs through appropriate stages of transformation • Through the use of flexible drivers • And meaningful assignment rules19 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Business Users Define Stages of Allocation20 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Business Users Control Definition of Allocation Methods21 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Business Users Control Definition of Assignment Rules22 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 2 Examine details of profit and cost • Model results reveal new ways of looking at costs and profitability: • To identify which of our customers / products / services are profitable23 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Traditional Reporting Provides an Accounting View of Profit Organizational Profitability24 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Profitability Management Provides a Business View Product Profitability by Customer Customer Profitability by Product25 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 3 Identify causality of costs • The model exposes previously unknown cost behavior • To highlight the business drivers that really matter • And to reveal what is impacting business efficiency26 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • How Customers / Products Consume Activity Costs Activity Costs consumed by product / customer27 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • How Efficiently Resources Are Being Used Labor capacity and utilization28 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 4 Evaluate scenarios for performance improvement • The model can be used to evaluate the impact proposed business changes • To drive better resource utilization • And the opportunity for improved profitability29 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Compare Scenario Results to Choose Best Course of Action Scenario Results30 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Best Practices For World Class Profitability and Cost Management 1 Create meaningful and defensible cost models 2 Examine details of profit and cost 3 Identify causality of costs and profit 4 Evaluate scenarios for performance improvement31 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Critical Components to Implement Profitability and Cost Management Best Practices Who are the most and least Why are customers profitable customers? profitable or unprofitable? Common Reporting & Interaction Cost and Cost and Profitability Cost, Revenue and Cost and Profitability Revenue Allocation Reporting Profitability Analytics Simulation Calculations Evaluate business Profitability and Cost Management options through scenarios. Organizational Allocate Analyze Improvement32 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> Customer Success33 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Optimize Product Mix to Maximize Profitability Regional bank serving 19 Western and Midwestern states and 4 million households. Over $60B in assets with more than 10,000 employees.Before After  IT resources demand exceeded  Minimal IT involvement capacity for profitability reporting  Easy integration into EPM system  Needed business users to drive infrastructure profitability modeling  Ability to offer a basket of products by  Lack of insight how shared costs mixing and matching products impacted economics of the business according to customer demographics  Challenge to optimize product mix that  Benchmarking costs for developing maximizes bank profitability and marketing new products34 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Solving Common Customer Issues Capabilities Delivered • Shared Services Costing • Product Profitability • Shared Services Costing • Pricing Contracts • Regulatory Reporting • Shared Services Costing • Cost to Serve • Shared Services Costing • Regulatory Reporting • Product Profitability • Customer Profitability35 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> HPCM Value Proposition36 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • HPCM Benefits Key Message Benefits Discover Drivers of • Identify sources and attributes of profitability with Costs and Profitability multidimensional analysis • Improve decisions with scenario modeling capabilities • Enable management best practices by leveraging profitability as a performance metric Empower Users with • Accurately allocate costs with our flexible allocation engine that Visibility and Flexibility supports any methodology • Gain confidence into cost allocations and revenue flows with graphical traceability maps • Quickly validate models with user-defined business rules Improve Resource • Impact budgets and plans through integration with other Alignment performance management applications • Strategically allocate resources with accurate profitability and cost information • Improve marketing programs through customer segmentation37 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Value Proposition for Essbase customers • Packaged Profitability functionality • Framework for profitability modeling • Support for Any Cost Allocation methodologies • Pre-built Model Validation reporting • Traceability Maps • Translation of Business rules into high-level Calcscript • Genealogy generation • Designed for the business user • Integration with EPM system • Integration with ERP38 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Value Proposition for Planning customers • Purpose-built Costing and Profitability functionality • Designed for the business user • Essbase • Uses the same infrastructure as Planning • Metadata sharing • Common Reporting Tools • Integration with EPM system • Integration with ERP • Ease of User acceptance39 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Value Proposition for EPM customers • New module in the EPM System • Packaged Profitability functionality • Designed for the business user • Common EPM infrastructure • Metadata sharing • Essbase • Common Reporting Tools • Integration with ERP • Ease of User acceptance40 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Competitive Differentiators • Technical • Support for multiple cost allocation methodologies • Up to 9 stages of Cost Allocations • Traceability visualization • Multidimensional analysis • Integrated with the leading EPM and ERP Systems • Business • Buyers familiarity (CFO’s office) with Hyperion (Essbase) • Business user driven profitability modeling • Leverage investments in existing Performance Management applications41 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • HPCM – One System for Profitability Reporting, Analytics and Management ALLOCATION ENGINE REPORTING & ANALYTICS ENGINE SCENARIO MODELER • Drastic Cost Reduction in • Understand basis of profitability • Predict results of contingent actions performing Cost Allocations • Cuts IT delays; frees IT resources • High-performance, multi-dimensional • User Defined What-if Scenarios • Rules based, Finance Controlled analysis • Change drivers, assumptions, • Business Analyst driven profitability allocations model development and deployment • Profitability Measurement Reporting • Flexible Allocation Platform • Cost Metric and Benchmarking • Scenario Comparison • Methodology Independent • Affect on budget of implementing • Visual Modeling recommendation A vs. B • Causality Reporting • Advanced Calculation Engine • Multi-dimensional, high performance • Test and anticipate results of • Discover root causes to enact calculation engine potential remedies change • Allocation transparency • Corporate agility Oracle Differentiator42 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> A Simple Example: Bikes Manufacturing43 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Bikes Manufacturing • Medium-sized bicycle manufacturer Bikes needs to better understand costs and • Recent increase in sales profitability of its revenue: customers! • Due mainly to increased purchases by big-box store: Q- mart • RESULT: • Monthly revenue has increased • Profit and profit margin has decreased • Q-mart has asked Bikes to supply more product44 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Bike is seeking answers to… Sample Questions • How are my customers consuming activities? • Which department costs are being consumed by products? • Which of my regions are profitable?45 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Bikes Manufacturing – Depiction of Cost Flow General Ledger Build an Allocation model to transform costs through these stages! Business Operations Products Customers Markets46 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • What Is?47 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Why?48 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Bikes - Improvement • After reviewing the sales costs, a program of customer education has reduced costs of: • Sales Order Processing • Service Costs • Returns Processing • Improving the bottom line What Now?49 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • <Insert Picture Here> A Simple Example: Bikes Manufacturing Overhead Cost Allocations How did BIKES use HPCM to build the model….50 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Hyperion Profitability and Cost Management – Design Principles 1. Take advantage of common EPM technology • Use the power of Essbase for calculation and reporting 2. Flexible methodology 3. Allow a BUSINESS USER to control the design and creation of the allocation solution • Let the application take care of the Essbase technical components51 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Oracle’s Hyperion Profitability & Cost Management EPM Workspace PERFORMANCE MANAGEMENT APPLICATIONS Business Management Planning Profitability Management Financial Performance Management Applications Strategy Reporting & BI Applications BI Applications Compliance Business Intelligence Foundation Fusion Middleware OLTP & ODS Data Warehouse OLAP SAP, Oracle, Siebel, Excel Business Systems Data Mart PeopleSoft, Custom XML Process52 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Process Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the • Load Cost, Revenue Reporting Cube with Dimensions & Business Model: & Driver Data Allocation Genealogy: Hierarchies • Profitability Analysis 1. Define the Stages • Calculate Model & • Deploy the Store Results 2. Define the Drivers • Cost & Revenue Application 3. Validate the Model Contribution Analysis 3. Assign Drivers • Generate the 4. Define Assignment Reporting Cube Rules53 53 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the • Load Cost, Revenue Reporting Cube with Dimensions & Business Model: & Driver Data Allocation Genealogy: Hierarchies • Profitability Analysis 1. Define the Stages • Calculate Model & • Deploy the Store Results 2. Define the Drivers • Cost & Revenue Application 3. Validate the Model Contribution Analysis 3. Assign Drivers • Generate the 4. Define Assignment Reporting Cube Rules Essbase Stages Calculation Essbase Dimensions Hierarchies Drivers Cube Reporting Attributes Assignments (BSO) Cube (ASO) Enterprise Performance Management Web Analysis, Architect Hyperion Profitability & Financial Cost Reporting, Management Smartview54 54 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Profitability and Cost Management – Design Principles 1. Take advantage of existing technology • Use the power of Essbase for calculation and reporting 2. Flexible methodology 3. Allow a BUSINESS USER to control the design and creation of the allocation solution • Let the application take care of the Essbase technical components55 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Flexibility • Up to 9 stages of cost allocations • Intra-stage Allocations • Reciprocal Allocations • Support for multiple cost allocation methodologies • ABC, Time estimation, Percentage allocation, Even Splits • Supports both cost and revenue allocations • Integrated with the leading EPM and ERP Systems56 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Profitability and Cost Management – Design Principles 1. Take advantage of existing technology • Use the power of Essbase for calculation and reporting 2. Flexible methodology 3. Allow a BUSINESS USER to control the design and creation of the allocation solution • Let the application take care of the Essbase technical components57 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Dimensions & Hierarchies • Deploy the Application Dimensions Hierarchies Attributes Enterprise Performance Management Architect58 58 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 59 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the Dimensions & Business Model: Hierarchies 1. Define the Stages • Deploy the Application Dimensions Stages Hierarchies Attributes Enterprise Performance Management Architect Hyperion Profitability & Cost Management60 60 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Define the Stages Associate to Essbase Dimensions General Ledger Departments / Accounts Business Operations Departments / Activities Products Customers Products Customers Markets Customer / Product / Regions61 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 62 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 63 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the Dimensions & Business Model: Hierarchies • Define the Stages • Deploy the • Define the Drivers Application • Assign Drivers • Define Assignment Rules Dimensions Stages Hierarchies Drivers Attributes Assignments Enterprise Performance Management Architect Hyperion Profitability & Cost Management64 64 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Bikes Sample – Driver / Allocations Human Resources/ $ Compensation & Benefits HeadCount Marketing/ Shipping/ Marketing/ Media Buying Campaign Order Assembly … Development (3) (3) (4)65 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 66 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 67 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 68 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the Dimensions & Business Model: Hierarchies • Define the Stages • Deploy the • Define the Drivers Application • Assign Drivers • Define Assignment Rules Essbase Dimensions Stages Drivers Calculation Hierarchies Attributes Assignments Cube (BSO) Enterprise Performance Management Architect Hyperion Profitability & Cost Management69 69 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 70 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the • Load Cost, Revenue Dimensions & Business Model: & Driver Data Hierarchies 1. Define the Stages • Deploy the 2. Define the Drivers Application 3. Assign Drivers 4. Define Assignment Rules Essbase Stages Calculation Dimensions Hierarchies Drivers Cube Attributes Assignments (BSO) Enterprise Performance Management Architect Hyperion Profitability & Cost Management71 71 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Load Financial Data…72 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Load Driver Data…73 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Mass Load Data74 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the • Load Cost, Revenue Dimensions & Business Model: & Driver Data Hierarchies 1. Define the Stages • Calculate Model & • Deploy the Store Results 2. Define the Drivers Application 3. Validate the Model 3. Assign Drivers • Generate the 4. Define Assignment Reporting Cube Rules Essbase Stages Calculation Essbase Dimensions Hierarchies Drivers Cube Reporting Attributes Assignments (BSO) Cube (ASO) Enterprise Performance Management Architect Hyperion Profitability & Cost Management75 75 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Validation…76 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Validation…77 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • Review Cost Flows78 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • The Profitability Modeling Environment Metadata Reporting, Analytics & Model Development Management Scenario Modeling • Create & Manage Create & Manage the • Load Cost, Revenue Reporting Cube with Dimensions & Business Model: & Driver Data Allocation Genealogy: Hierarchies • Profitability Analysis 1. Define the Stages • Calculate Model & • Deploy the Store Results 2. Define the Drivers • Cost & Revenue Application 3. Validate the Model Contribution Analysis 3. Assign Drivers • Generate the 4. Define Assignment Reporting Cube Rules Essbase Stages Calculation Essbase Dimensions Hierarchies Drivers Cube Reporting Attributes Assignments (BSO) Cube (ASO) Enterprise Performance Management Web Analysis, Architect Hyperion Profitability & Financial Cost Reporting, Management Smartview79 79 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 80 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 81 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 82 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.
  • 83 Copyright © 2009, Oracle and/or its affiliates. All rights reserved.