"The Bill for IT: Providing IT Cost Transparency with HPCM and PFP" was presented by Edgewater Ranzal at KScope 2015

2. The Bill for IT
Providing IT Cost Transparency with
HPCM and PFP
Mike Killeen
Sr. VP of Technology & Strategy
Edgewater Ranzal

3. Introduction to Ranzal
Oracle Platinum Consulting Partner - 100% Focus on Oracle/Hyperion Business Analytics (EPM/BI)
o 195+ Full time EPM/BI Billable Consultants throughout the US, Canada and the United Kingdom
EPM & BI Experience & Success
o 1,800+ Oracle EPM & BI projects for 850 clients successfully delivered since our founding in 1996o 1,800+ Oracle EPM & BI projects for 850 clients successfully delivered since our founding in 1996
Depth & Breadth of EPM & BI Service Offerings
o Product Experts across the full EPM/BI Suite - Planning, HFM, HTP, FCM (ARM), HSF, HPCM, Essbase,
BI/Endeca, DRM, FDMEE
o Visioning & Roadmaps, Full Life Cycle Implementations, Technical Review & Assessments, Staff
Augmentation
Ranzal Oracle ACEs Across EPM/BI Platform
Direct Line to Development, Customer Advisory Boards, Beta Testing, Author Certification Exams3

4. Edgewater Ranzal Service Offerings
● Enterprise Planning Full Life Cycle Application Delivery By Module:
● Oracle Hyperion Planning
● Oracle Hyperion Strategic Planning
● Oracle Hyperion Workforce Planning, Capital Planning & Project Financial Planning
● Oracle Hyperion Essbase
● Planning & Budgeting Cloud Service (PBCS)
● HPCM Full Life Cycle Application Delivery By Type:
● Shared Service Costing & Charge Backs
Financial Close &
Consolidations
Business
Intelligence
Enterprise
Planning &
Analytics
● Operational Transfer Pricing & Inter-Unit Charges
● Global Expense Allocations - Dept & Project
● Management Profitability – Segment, Region & LOB
● Operational Profitability – Client, Product & Service
Edgewater Ranzal Resource Capability
● ~100 Experienced Full Time Consultants (95% Planning/Essbase Certified)
● Full Time Salaried Employees – Avg. 7+ Years with Ranzal; Sr. Mgmt 15+ Years
● Close Relationships with Oracle Development – involved in initial Product Architecture
● Authored Certified Planning Design Lead Exam Twice
● Deep Bench and Heavy Investments in Training and Growth
● Comprehensive approach incorporates other tools such as DRM, FDMEE & OBIEE
● Internal Lab available for POCs, Project Jump Starts & Exalytics Benchmarking
Data Integration
Services
Training &
Support Services
Advisory Services2Infrastructure
Profitability
& Cost Mgmt

5. Shared Service Center Overview
Oracle EPM Solution Overview
Oracle EPM Solution Elements at Work in IT
Agenda
● IT Budgeting & Forecasting with PFP
● IT Project Allocations & Service Charges with HPCM
Closing & Q&A
5

6. What is a Shared Service Center?
Reorganization of company resources that
perform similar activities into concentrated global
or regional organizations with the goal of providing
standardized services to internal business partners
of a higher quality and lower cost to the
organization as a whole.
6
organization as a whole.
Typically establishes a “company” within the
company that strives to optimize service delivery in
a cost effective, flexible, and reliable way to their
internal business partners… “clients.”
Benefits Are:
o Gain economies of scale that boost
performance and lower admin costs.
o Improve quality of service.
Challenges are:
o Understanding actual costs incurred by service providers in
support of their internal “clients.”
o Charging business units for services consumed can be difficult
because of the wildly different results and methodologies.
o Supporting Organizational Change

7. Understanding the Value of a Shared Service Center
Equitable Charge Back:
o Are we promoting fairness and appropriate internal
charges among internal customers?
A business that implements a shared service center will ask the following
questions to gauge effectiveness:
Behavioral Change:
o Are we rewarding BU’s that choose standardized and
more efficient processes?
o Are service providers rewarded for aligning “supply-side”
cost structures with the actual business unit demand?
Making Benefits Visible:
o Are we providing mechanisms to measure and report the
benefits realized of shared service center deployments,
either via reduced costs, expanded service capability, or
some combination of both?
7

8. Oracle EPM Solution Overview

9. IT Shared Service Center EPM Solution Architecture
Information
Delivery
Dashboards
Production
Reporting
Ad-hoc
Analysis
Office
Integration
Search &
Alerts
PFPPFP
9
Data Integration
EPM/BI
Applications
Excel
XML
OLTP & ODS
Systems
PeopleSoft, Oracle,
JDE, SAP, Other GLs
Business
Operations
Data Marts
Data Warehouse
OLAP Cubes
Planning & ForecastingFinancial Close Analytics/BI
Financial Master Data Management & Data Integration
Source Systems
HPCMHPCM
IT AllocsIT Allocs
PFPPFP
IT PlanningIT Planning
HPCM/PLNHPCM/PLN
IT ChargesIT Charges

10. Solution Component – Hyperion Planning
► Powerful workflow
and process management
► Intuitive interface for end user data
entry
1
0
entry
► Robust data integration
► Leverages Essbase for powerful
reporting and analysis
► Scalable Web infrastructure
► Shared EPM Administration Tools

11. PFP – Project Financial Planning
Project Planning
• Custom
Workforce Planning
• Custom
Project Financial Planning (PFP)
1
1
The Benefits to Implementing Project Financial Planning:
Pre-configured with detailed capabilities and process flow to support a
rapid deployment.
Customizable framework for configuring around a client’s unique needs.
Proven Hyperion Planning platform
Oracle-supported application.
• Custom
• Pre-Packaged Module
Capital Planning
• Custom
• Pre-Packaged Module
Maximize Value
Minimize Risk

12. • Packaged Profitability functionality
• Computes Profitability for Units, Segments and Services
• Pre-Built Framework for profitability modeling:
• Pre-Built Data Model
• Support for Multiple Cost & Revenue Allocation methodologies
• Pre-Built Validation Reporting – Pre & Post Execution
HPCM - Hyperion Profitability & Cost Management
12
• Pre-Built Validation Reporting – Pre & Post Execution
• Graphical Interactive Traceability Maps
• A User-Driven application
• Measures, Allocates and Assigns Cost and Revenues via User Defined Rules
• Finance User-facing Model Development & Execution
• Provides Scenario Modeling for Decision Making
• Tightly integrated with the full Oracle Hyperion EPM Suite
• Shared Data and Master Data Administration
• Shared Reporting Tools like Financial Reports, Smart View for Office, OBIEE
• Shared Security Administration
• Proven Technology Stack

13. • Analyze different
chargeback
approaches to yield
optimal mix of services
versus costs incurred
• Provide key
stakeholders
confidence in the
numbers produced and
methodologies
• Define consistent
allocation and charge
back methodology
across all management
cycles.
Audit and Accuracy Shared Methodology
• Give units the detail
costs they incur for the
service consumed.
• Compare effectiveness
TransparencyFlexibility
Why HPCM? For these Key Requirements…
versus costs incurred
by the entity.
• Rapidly evolve
methodologies as the
business changes.
• Provide What-If
capabilities to assess
impact of key business
decisions on bottom
line.
methodologies
employed to ensure
compliance.
• Achieve this through
meaningful allocations,
automation, and system
controls.
cycles.
• Create consistent
comparisons when
reviewing and updating
methodology result and
planning for future
management cycles.
• Compare effectiveness
of internal unit services
with those of external
providers to ensure
efficiency.
• Allow LOB managers to
understand cost to
serve and profitability
results.
13

14. Group HQ
Group Overhead (e.g. CEO)
Group Services (e.g. Property, Controllership, IT)
Inter Unit Charges ( e.g. Transfer Pricing, Contractual Charges)
Inter Unit
“Regulatory”
Division 1
Shared
Services
Division 2 Division 3
Application
Types
Division 1
Overhead
Services
Fully Allocated
P&L (e.g. Channel,
Fund, Region)
Expense
Allocations
Fully
Allocated
“Thin
Ledger”
Product Profitability
Customer Profitability
Operational
Profitability
“BI”
Division 2
Overhead
Services
Fully Allocated
P&L (e.g. Channel,
Fund, Region)
Division 3
Overhead
Services
Fully Allocated
P&L (e.g.
Channel, Fund,
Region)

15. HPCM and Planning- Better Together
EPMA
Hyperion Planning
Multi User Data Entry
Task Lists & Workflow
Bottoms Up Calculations
Reporting & Commentary
HPCM
Multi-Step Allocation Modeling
Validation Reporting
Traceability Maps & AnalysisData synch:
Costs by Account & Dept & Project
Shared Dimensions &
Hierarchies (EPMA)
15
EPM Reporting & Analysis
Financial Reports
Smart View for Office
BI Foundation (OBIEEE/Essbase)
Data synch: Direct Attribution to LOB &
Market
Data synch: Drivers by
Account & Dept & Project & LOB & Market
Data synch: Results by
Account & Dept & Project & LOB & Market

16. Level 1 Shared Service Center Solution Architecture
16

17. Level 2 Shared Service Center Architecture – for IT
HPCM/PLNHPCM/PLN
IT ChargesIT Charges
17
HPCMHPCM
IT AllocsIT Allocs
PFPPFP
IT PlanningIT Planning

18. IT Budgeting & ForecastingIT Budgeting & Forecasting
with PFP

19. • Account – supports planning workforce resources, capital assets and planning for projects
• Project – contains both existing and new projects and broken down into types: Contract,
Capital and Indirect
• Project Element – allows you to build up revenue, cost or other assumptions at line item detail
• Job – list of roles within an organization that are assigned to projects
Pre-Built Dimensions in PFP Application
• Job – list of roles within an organization that are assigned to projects
• Employee – contains employees of the organization as well as the ability for new hires
• Asset Class – breaks out the different categories of assets that a company owns. This is broken
down by tangible assets and intangible assets
• Asset Detail – supports the request of new asset purchases, either new leased or new owned
• Entity, Scenario, Version, Period, Year and Currency for multi-currency apps are also included as
standard dimensions
• Vendor - can be customized in older releases, was introduced to PFP in 11.1.2.3
19

20. PFP Dimensional Configuration* By Typical IT Expenditure Type
21
*Vendor is now an available dimension in the latest version, or can be customized in older versions.

21. WFP PRJCPX
6a
11
12
PROJECT FINANCIAL PLANNING
Flow of Dimensions, Hierarchies & Attributes
CCEMargin WFP
Mgmt
Reporting
Fixed Assets
Contractor
Management
Internal
Time Entry
1
2
3 4 5
6c
7a 7b
8 8 10
Gen Ledger
6b
* External employees of the Employee dimension will include Vendor and Contract rollups as well as the Contractor ID to be the Employee ID.
9
Position ID
24

22. Actuals Data Flow
WFP PRJ
1
3
4
PROJECT FINANCIAL PLANNING
CPX
CCE
Margin
WFP
Mgmt
Reporting
Fixed AssetsAP/PO
Internal
Time Entry
Gen Ledger
2
4
6
GL Accruals
5
25

23. Budget & Forecast Data Flow
WFP PRJ
1
CPX
PROJECT FINANCIAL PLANNING
CPX
CAPITAL
TBD
Interfaces #3 and #4 are dependent on
configuration of:
CCEMargin WFP
Mgmt
Reporting
Fixed AssetsAP/PO
Internal
Time Entry
Gen Ledger
3
4
5
configuration of:
o New accounts to be entered into CCE
o Manual Adjustment account to refine data
loaded from PFP
Further review and design is required for
fulfillment of this requirement.
Interface # 5 will be developed but not
operational for 1st release (Phase 2 requirement)
26

24. Project Financial Planning Workflow
23

25. PFP includes user task lists that help project
users navigate through the application and enter
expenses for new and in-flight EH projects.
• Propose New Projects – Allows users to
create new capital and Opex project proposals
by cost center and enter expenses to each.
• Manage Existing Projects – Allows users to
view existing in-flight projects by cost center
and update/add expenses.
PFP Task Lists and Workflow
and update/add expenses.
• Review Projects – Allows users to review both
proposed and existing projects by cost center.
• Finance Analysis – Allows users to view total
project spend by cost center and compare to
budget and actual data.
27

26. PFP – Expense Planning in Action
1. Project Requests – Create New Capital/Operating Project or Select Existing In Flight Project.
2. Expense Planning – Add Labor, Equipment, Material, or Other Direct Spend to Project Elements
27
3. Review – Review, Approve & Reconcile Project Expenditures

27. IT Project Allocations
with HPCMwith HPCM

28. HPCM Workflow
Published Reports &
Interactive Analytics
Model Development
System Administration:
• Create & Manage
Dimensions & Hierarchies
• Deploy the Application
• Define Data Integrations
from Source Systems
• Manage User Security
Master Data & Data
Integration Management
Produce Management and
Performance Reports:
• Financial Results Books
• Margin Analysis
• Cost & Revenue Contribution
Analysis
• What-If Scenario Comparisons
• Genealogy Reports
Execute a Model POV:
1. Load Cost/Revenue Data
2. Load Driver Metric Data
3. Validate Model Inputs
4. Execute Calculations
5. Trace Allocations & Validate Model
Results
6. Publish the Model POV
Create & Manage the Business Model:
1. Define the Stages (Std Only)
2. Create a Model Point-Of-View (POV)
3. Create Rules (Std & Detailed)
1. Define the Drivers
2. Define Assignment Rules
3. Assign Drivers
Model Execution
28
Enterprise
Performance
Management
Architect
Dimensions
Hierarchies
Attributes
Hyperion Profitability & Cost
Management
Financial Reports, Smart View,
Business Intelligence
Foundation
• Genealogy Reports
6. Publish the Model POV
4. Create Assignments
4. Create Management Ledger Rules
Stages
Drivers
Driver Sels
Rules
Assignments
Standard Model
Detailed Model
Management Ledger Model
Calc Cube
BSO
Rept Cube
ASO
Calcs
RDBMS
Contr.
ASO
Destination
ASO
Calc/Rept
ASO
Source
ASO

29. Demo - Define POV, Business & Driver Metrics in EPMA
POV Dimensions Driver MetricsBusiness Dims
29

30. Illustrative Allocation Driver Options
IT Operating Expenses
Expense
Labor
Capital (D&A)
Cost Pools (Project Types)
Directly Aligned
(100% to a Segment)
Simple Intermed.
Segment 1
Applications
(e.g. Rx
Connect)
Segment 1
Infrastructure
(e.g. Store
WAN)
Segment 2
Applications
(e.g. Rx
Claims)
Segment 2
Infrastructure
Corporate
Applications
(e.g. Hyperion)
Corporate
Infrastructure
Corporate
Core Support
Segment 1
Core Support
Segment 2
Core Support
Typical IT Service Costing Approach
30
Project
Segment 1 Segment 2 Corporate
Customer Segments or Lines of Business
Allocation Profile
1. Drivers will be refreshed annually
/ semi-annually
2. Driver selection is dependent
upon the availability of data
The driver is used to create the allocation profile
Data Center (e.g. Scottsdale Data Center)
Enterprise wide Applications / Services (e.g. Learned)
Distributed Servers (e.g. x86)
Mainframe (e.g. i/zSeries)
Database (e.g. Oracle Platform)
Security (e.g. VPN, Firewall)
Storage (e.g. SAN Capability)
Network (e.g. Data Center Connectivity)
Headcount
Sq. Ft.
App Instances
MIPS
DB Instances
GBs
Cost Follows Cost
Sq. Ft + Power
CPUs
Tiered Instances
Cost Follows Cost
Tiered GBs
Ports
Tickets
Devices
Devices
Handsets/ Lines
Apps
Application
Mobile (e.g. Blackberry)
Desktops / Laptops (e.g. Windows 7)
Voice, Video, Audio (e.g. Office Telephony)
End User Support (e.g. Help Desk)
End
User
Users
App Specific DriverApp

31. Total IT Dept
Exp
Resource
GENERAL LEDGER
Financial Data
IT Costing Functional Flow in HPCM
31
Resource
&
Project
Cost Pool
& Service
Customer (LOB)
&
Market
MANUAL INPUT
OPERATIONAL SYSTEMS
Drivers

32. HPCM – Modeling the Costing Flow via Stage Configuration
32
Stage definition is wizard
driven, and provides the
appropriate selections for
stage creation.

33. HPCM Rule Definition – The Four Steps
Source Stage
Project Detail
Target Stage
Customer
Project
Dept
Resource
Customer
ProjectDriver
Driver Selections – Defines what Driver
Definitions to use against the Source stage,
typically the dimension identified as the
driver definition.
Assignment Rules Definitions– Defines the
member combination in the target dimension
for the assignment.
Assignments– Defines the source
Driver Definitions – Create an allocation
formula/methodology that references a
loaded metric within the model.
1
2
3
4
2 3
1
4
4
33
Assignments– Defines the source
dimension combination and the target
Assignment Rule
4
4

34. Rule Definition Step 1: End Users Define Drivers in HPCM
Select from list of user defined
driver metrics and allocation
methodologies.
34

35. Rule Definition Step 2: Assign Drivers to Source Cost Pools in HPCM
35
Select Default Drivers for Cost
Pools, with an ability to provide
exceptions for unique projects.

36. Rule Definition Step 3: Create Target Assignment Rules in HPCM
36

37. Rule Definition Step 4: Map Source Stage to Targets Via Assignments
37
Or Allocation Assignments
can be bulk loaded via a
staging table.

38. Model Execution - Load and Validate Project Cost & P&L Data
38
Add Capitalization Rules to
Calculate P&L Impact of
Capital Project

39. Model Execution – Post Model Validation – Stage Balancing Report
All Costs are
Allocated to Final
Stage
39

40. Traceability Analysis – What makes up a client charge?
35% of China Costs come from
Asia Region Office Project
212375
2% of China Charge came from
resource wswain from Dept X
working on Project Y
40

41. Closing and Q&AClosing and Q&A

42. Value of F-A-S-T
Flexibility
• IT Finance Users can run multiple scenarios to assess impact of methodology and business
changes as company evolves their IT Allocations methodology. Examples include adding new
drivers, adding new cost pools, changing cost pools drivers, and project to cost pool relationship
• Scalability to support Profitability, Pricing and Compliance use cases in the future
Accuracy / Control
• Workflows deliver an automated, repeatable process for IT Allocations
42
• Workflows deliver an automated, repeatable process for IT Allocations
• HPCM will support company change control process / segregation of duties
• Limited Publishing Capability will lock results when complete
Shared Methodology
• Apply FY14 Actual Methods and Drivers to FY15 Budget and Forecast
• Maintain One Engine for All Allocation Rules and Drivers across Scenarios
Transparency
• Allow Segments to understand details of costs received all the way back to incurred cost
• Allow IT Management to understand Cost Per User, Cost to Serve, and implement efficiencies to
align with industry standards

43. Edgewater Ranzal
108 Corporate Park Drive, Suite 105
White Plains, NY 10604
Tel (914) 253-6600
Email: info@ranzal.com
Visit Us at Booth 500
Contact Information
Visit Us in the
Exhibition Hall at
Booth 500
Visit Us at Booth 500
Presenter
Mike Killeen, Sr. VP Technology & Strategy
45 Beech Street,
Suite 109
London EC2Y 8AD
United Kingdom
Tel +44 (0) 2033 717 174
150 North Michigan
Ave.
Suite 2800
Chicago, IL 60601
Tel (312) 624-7738
200 Harvard Mill
Square
Suite 210
Wakefield, MA 01880
Tel (781) 246-3343

45. Backup SlidesBackup Slides

46. Shared Service Center Guiding Principles
• Each service should have its price. The business can determine how much
service it wants at that price.Transparency
• Manage the service like a business, not a fixed cost. Serve internal and
potentially external customers.Business Management
SOURCE: Booz-Allen & Hamilton
• Provide the service levels the businesses want, not the levels staff think they
need.Market Responsiveness
• Identify and deploy leading practices quickly and globally.Leading Practices
• Develop streamlined process standards that can be maintained and improved
quickly.Process Standardization
• Treat business units like customers, offering services they value and charging for
each.Service-Oriented Culture
4
6

47. Demo - Transparency into Details of Chargeback
Resource , Dept, Project &
Expense Type Details ofExpense Type Details of
What Makes up China
Charge
47

48. THANK YOU!