5 Steps for World Class Close
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Transcript of 5 Steps for World Class Close
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2011 MarketSphere Consulting, LLC
5 Steps to World Class CloseFebruary 25, 2011
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World Class Financial Close
Collect data Close AdjustmentsCurrencyI/C
Subsidiaries
ReportManagementLegal
External
Analyze
6 Days 12 Days *
Collect /Close Adjustments Reporting Analyze and Forecast
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Defining the Financial Close
Sub Ledger CloseGeneral
Ledger CloseData
AssuranceConsolidation
Internal MgmtReporting
ExternalFinancialReporting
Filing
Close Sub Ledgersinto GL (i.e. AR, AP,FA, etc.)
Perform Reconciliations
Bank Reconciliations Standard Account Recon Sub Ledger ReconPost Accruals
Deliver selfservice reportingto theorganization forperformancediscussions andplan realignment
Automate externalreporting
gatheringdisclosures andfinancialinformation
Automate anddeliver Edgar &XBRL filings,Statutory filings,Tax, etc.
Gather and validate
complete data sets tosupport all financialreporting needs (i.e.Legal Entity, Segment,Management, Tax,Sustainability Metrics,etc.)
Automate consolidatedfinancial reporting
leveraging multiplehierarchies/dimensionsand calculations (i.e. CTA,FASB, KPIs, FX,Retained Earnings,Topside Entries etc.)
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Critical Components to Implement
Transactions Reporting
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
Governance, Risk & Compliance
Financial Close Best Practices
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The ERP to EPM Landscape
Creating Serenity out of Disparity
ERP
Operations
BI
Customers
MarketingSales
HRFinance
Executives
Cloud Computing
Planning Consolidations
Management Reporting
Vendors Tax
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The ERP to EPM Landscape
How do we get from here to there?
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We Must Begin Thinking End-to-End
Performance Issues:Having the right tool for the job is essential. Hammers and
screwdrivers.
Chart Issues:Many times organizations jump to the conclusion that they need
to re-implement their chart of accounts or possibly all of ERP.
Do you really want to do this every few years?
Reporting:Leverage EPM to enhance ERP reports . . . not replace them!
Source of Profit:ERP provides the base data; EPM provides the view.
Use of Capital:EPM can help unlock items buried in sub-ledgers. This
translates directly into managing shareholder value, cash, and
working capital.
Tactical
Strategic
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EPM Architecture
Essbase
Oracle ERP
Data Sources / ETL
FDM
SmartView: Ad Hoc Reporting
HFM
Management Reporting
and Analysis
Financial Applications Reporting & Analysis
EPMA/EAL
Other ERP
Other Data
Sources
Consolidated Financial
Statements: I/S, BS,
Cash Flow
Variance Analysis of Plan
vs. Forecast vs. Actual
What-if Analysis
(i.e. Rates)
Ad hoc Reporting
Product and
Customer
Profitability
Planning
EPMA
Consolidations
Financial
Reporting
Corporate Financial
Plan
Workforce Planning
CapEx
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StrategicFinance
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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Financial Data Quality Management
Data cleansingandtransformation
Task scheduling
Text anddocumentarchive
Audit review
Data staging
Integration
Adapters
Prepackagedintegration
Data loading includingsupplemental data,
line item detail Dimensional mapping
verification
Process management
Excel
G/L
ERP
Flat files
ETLRepositories
Hyperion v11
FinancialManagement
Planning
Essbase
Data Marts
SourceSystems
Data
Preparation
Server
EPM
Systems
Guided Workflow
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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Challenges with Financial Close
Many clients still use spreadsheet schedulesand cubicle-posted calendars to manage the
close process
The flow of activity is often disjointed; phone
calls, e-mail, and stop-bys are the means by
which the close is executed Corporate controllers lack visibility to status of
key tasks due to the use of various systems,
regions and departments
Too often the controller is left hoping everything
will work resulting in many late nights andoverburdened staff
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The Answer Financial Close Management
Financial Close Management is the first application of its kind offering
a full featured workflow solution to manage the entire close processfrom sub-ledger close to external filings.
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Process Monitoring
Dashboards and ad-hocreporting offers instant real timeinsight into the close processes
Easily illustrates currentprocess status
Automatically updates status onprocess tasks
Highlights which tasks are atrisk or behind schedule
Encourages continuous
improvement to the closeprocess
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Task Management
Take the slack out of theprocess
Task owners are notifiedimmediately when predecessortask are complete so work canbegin
Reassign tasks on the fly toprevent bottlenecks
Users can raise an alert to createvisibility and get additionalsupport
Users can be taken directly intounderlying systems to completetasks
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Active Financial Close Calendar
Details all the tasks requiredfor the financial closeprocess
Multiple views of closeprocess flow
Calendar view Tasklist view
Gantt view
Configurable for each user
MS Outlook Integration
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Auditability and Policy Compliance
Easily produce a Close Binderwith a complete history of theentire process
Communicate critical processdocumentation at the task level
Attach and report on backupdocumentation
Capture responses toquestionnaires and usercomments
Reduce audit effort and cost
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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Moving Process Units through the Review Cycle
Manage Process
button
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Select process unit
Viewing Process Unit Status
Process unit status
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Lights-out processing
of common tasks
Single or multiple tasks
Data loading and validation
Consolidations
Reporting
On demand or scheduled
Recurring processes
Enhanced monitoring
and control of critical processes
Multiple servers, users and tasks
Automation and Monitoring
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Journals Close the Ledger and Keep it Closed
Speeds the financial closecycle
Full Dr/Cr Detail for TopSide
Adjustments
Line-item and journal level
text descriptions for full
documentation
Review/Approve/Reject
Workflow with
User/Date/Time Stamp
Ability to extract for posting
to Ledger, if needed
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Automatic match at firstcommon parent
IC Dimension for easy
reporting source vs.
destination
Email respective entities
directly from report
Standard Intercompany
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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Reporting Overview
Reporting Options
Financial Reporting Graphical,object-oriented formatted reportingincluding HTML and PDF.
Web Analysis InteractiveDashboards for traffic lighting and
OLAP drill/pivot
SmartView MS-Office Add-in forExcel (ad hoc analysis), PowerPoint(board presentations) and Word(10Q/K)
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5 Steps to World Class Close
Ensure financial data quality
Create an accountable organization
Improve transparency Automate reporting
Reduce the cost ofcompliance
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Challenges with the Last Mile
Management and creation of criticaldocuments is manual (Debt Covenants,
10Q/K, Board Package and
Presentation, etc.)
Desire to leverage existing applications
in an integrated manner
Must comply with the SEC mandated
XBRL requirements
Year 2 requirements even morechallenging
3rd party options are costly and mayelongate the process
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The Options were Limited
3rd parties like Bowne, Merrill are costly
Niche vendors are risky
10K/10Q
Etc.
NicheVendors
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The Answer Disclosure Management
Disclosure Management is a full featured XBRL solution that leveragesbest-in-class Oracle reporting technologies including Oracle Hyperion
Financial Reporting and Oracle Hyperion Smart View for Office.
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XBRL Reporting
A complete XBRL creation andmanagement solution
Enterprise XBRL mappings
Report tagging: Microsoft Office orOracle Hyperion Financial Reports
Metadata tagging: HFM, EPMA,Essbase, HP
Taxonomy management includingextension and version control
Support for multiple taxonomies
Instance document management Creation and validation
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A Single, Streamlined Process
Uses customer-favored MS-Office via Smart View with embedded XBRL
in metadata. Single source for 10K/10Q creation and XBRL output.
10K/10Q
No more 3rd parties. No more fees. No more data quality concerns.
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Case Study
Company Overview & Situation Leading burial products manufacturer in the world; recently
acquired a machinery manufacturer
The Hyperion platform implementation was initiated to solve
for business needs in three major financial processes:consolidation, financial reporting, and planning and
forecasting
The goal of the solution was to not only meet immediatebusiness needs, but provide a platform for future growth
MarketSphere Applied Expertise Leveraged MarketSpheres full-platform expertise to deliver a
roadmap initiative that included HFM/FDM/DM, Planning, and
Essbase HFM was initially implemented for the core business and
shortly after the completion of the project, was expanded toincorporate sub-consolidations and financial reporting newly
acquired company
Essbase was utilized to provide for CFO Handbook reporting
and analysis
Hyperion Planning was implemented to enable the business
to improve its planning and forecasting process
Disclosure Management was incorporated for the creation ofXBRL instance documents for the SEC
Benefits & Value Achieved Established a complete Enterprise Performance Management
platform to enable future growth, increased visibility to
financials for the entire company, and more robust reporting
and analysis
Automated the creation of the cash flow on a monthly basis
10K/10Q
Oracle HyperionDisclosureManagement
Oracle HyperionEnterprisePerformanceManagementApplications
Installsoftware
Align /map
financialsto XBRL
taxonomy
Input, testand
validatemappings
TrainDevelopXBRL
reporting
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Where Do I Start?
Step 6:
Performance
& Scenarios
Thin GL and HFM
Design Subject area
definition Data normalization
Workflow / Critical
Path Task Dependencies
Cycle TimeStandards
Reporting Entity
Elimination Consolidation Method
FX ProcessStandardization
Defined reporting
channels andmethods
Center ofExcellence
Corporate
Business
Unit
Cost Center
Report sets by user type
Standard Analytic
Framework
NFI (Non-Financial
Indicators)
Integrated Corporate
Performance
Event Driven Reporting
Visualization
Action-oriented
Internal and External
Financial Reporting
Automated Cash Flow
Treasury and BankReporting
Defined Data
Governance
MetadataManagement
First Pass Cycle Time
Consolidation Frequency
Test Case Performance
Application
Design andBuild
Step 5:
Quality &
DataMgmt
Step 4:
Reporting &
Analysis
Standards
Step 3:
Consolidation
& FX Logic
Step 2:Close
Calendar &
Playbook
Step 1:
Reporting
Elements
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Consider Leading Practices
Standard Chart of Accounts with automated
mapping to consolidations/reporting tool Record intercompany partner at the GL
transaction level
FX translation in the consolidation tool foreffective reporting and analysis
Legal, segment, and management reportingstructures in one application
Auditable data flow with drill-back to sourcedata
Distributed process management to improvecontrol and accuracy
Deep financial reporting and analysisdelivered self-service through the Web
Direct linkage to BOD/executivepresentations
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Kamron Miller, Practice Director, Consolidations & Financial Reporting
913.707.9607