Profitability and cost management are of increasing importance in today's difficult and rapidly changing markets. Summary level profitability reporting no longer suffices. To gain a competitive advantage, organizations must understand profitability beyond the usual lines of business, such as product line, service area, and customer segment. This presentation will demonstrate how Oracle Hyperion Profitability and Cost Management enables organizations to understand the true cost and profitability drivers within their business and empowers users with the visibility and flexibility to improve resource alignment, increase margins and ensure profitability.

1. Product Spotlight:
Oracle Hyperion Profitability and Cost Management
Roy Googin, Oracle
RJ Linehan, Innovus Partners

2. Today’s Management Challenges
Inability to Translate Vision into an Executable Strategy
The Vision Barrier
Only 5% of the work force
understands the strategy
The People Barrier The Management Barrier
9 of 10 companies 85% of executive teams spend
Only 25% of managers have
incentives linked to strategy
fail to execute less than one hour per month
strategy discussing strategy
60% of organizations don’t link
budgets to strategy
The Resource Barrier
©1998-2012 Balanced Scorecard Institute

3. Today’s Management Challenges
The Four Perspectives of Translating Vision and Strategy
FINANCIAL
“To succeed Objectives Measures Targets Initiatives
financially, how
should we
appear to our
shareholders?”
CUSTOMER INTERNAL BUSINESS PROCESS
“To achieve our Objectives Measures Targets Initiatives “To satisfy our Objectives Measures Targets Initiatives
vision, how Vision and shareholders
should we and customers,
appear to our Strategy what business
customers?” processes must
we excel at?”
LEARNING AND GROWTH
“To achieve our Objectives Measures Targets Initiatives
vision, how will
we sustain our
ability to
change and
improve?”
©1998-2012 Balanced Scorecard Institute

4. Today’s Management Challenges
Linking Tactics to Strategy
Customer Perspective
• Strategy - Improve customer value to increase revenue
and profitability
• Tactic – Define profitable customers, Identify those
customers, Acquire and/or retain those customers
Financial Perspective
• Strategy - Manage financial resources more efficiently to
reduce costs and increase profitability
• Tactic – Identify cost drivers, Decide what costs are
wasteful or unnecessary, Eliminate those costs

5. Today’s Management Challenges
Strategy and Tactics Lead to More Questions
• How do we define a profitable customer?
• How much does it cost to service our
customers?
• What is the profit margin for products sold
to our customers?
• What organizational resources does a
customer consume?
• Why has an increase in revenue not
translated into an increase in profitability?

6. Measuring Profitability and Costs
Challenges of Measuring Profitability and Cost Drivers
• Homegrown disparate models are inflexible,
inaccurate, and inconsistent
• Time lags to create and update profitability model
• Insufficient customer, product, or driver data at
the correct grain
• Lack of integration with financial data
• Excessive cost associated with maintaining
profitability solution

7. Measuring Profitability and Costs
Qualities of an Effective Profitability Solution
• Integrated solution that is flexible, accurate, and
consistent
• Owned and maintained by business users
• Offers transparent results that are reliable
• Provides traceability to source data for easier
visibility
• Lowers total-cost-of-ownership
***Connecting the Dots***

8. Hyperion Profitability and Cost Management (HPCM)
An Oracle EPM System Module
• Packaged Profitability functionality
• Computes Profitability for Business Segments, Customers and
Products
• Pre-Built Framework for profitability modeling:
• Pre-built Measures dimension
• Support for Multiple Cost Allocation methodologies
• Pre-Built Validation reporting
• Graphical Interactive Traceability Maps
• Genealogy Reporting shows flow from any stage to any stage
• A User-Driven application
• Measures, Allocates and Assigns Cost and Revenues via User
Defined Rules
• Finance User-facing Administration
• Provides Scenario Modeling for Decision Making
• Tightly integrated with the full Hyperion EPM Suite
• Shared Data and Metadata via EPMA
• Shared Reporting Tools like Financial Reports & Web Analysis
• Proven Technology Stack

9. Oracle’s Enterprise Performance Management Platform
Web Browser / Reporting & Interaction
Common Excel / Word / PowerPoint
Strategic Planning Planning & Forecasting
Hyperion Profitability &
Financial Close Profitability Management
Cost Management
EPM Architect /Quality Integration &Dimensions
Common
Data
Analysis
Financial Data Quality Management
and Consistent
DW / Excel / Text Files / Etc…
10

10. An Example: Using HPCM to Assign Costs
to Products, Branches, and Activities
GL $$$
Stages & Dimensions Drivers & Assignment Paths
Stages: Dimensions: $$$$ $$$$ $$$$
IT Facilities Audit
1: General = Dept + Account
Salaries Rent Salaries
Ledger
% of
Time
Spent
2: Activity = Dept + Activity IT
Desktop Support $$$ $$$ Even
Split
3: Product = Product Checking Accts $$$
# PCs
Square
in Use
Feet
4: Branch = Branch East 57th St $$ $$ $$$
# of # of
Trans Trans
$ $ $ $ $ $ $$ $ $ $
5: Cost = Product + Branch + Activity Checking Acct $ $ $ $ $ $ $ $ $ $
Object East 57th St $ $ $ $ $ $ $ $ $ $
Process Deposit $ $ $ $ $ $ $ $ $ $
$ $ $ $ $ $ $

11. HCPM Demonstration

12. Product Spotlight:
Oracle Hyperion Profitability and Cost Management
Roy Googin, Oracle
RJ Linehan, Innovus Partners