Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM

Business Analytics Solutions Provider Using Oracle EPM, BI, and Big Data Technologies

Retail Profitability Dinner

Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM

Mark Wright, Principal Solutions Consultant, Oracle

Jonah Rufus William, Business Leader Financial Systems, MasterCard

Mike Killeen, Oracle Ace, Sr. Vice President, Edgewater Ranzal

BLT Prime, New York, NY

Feb 24, 2016

Registration & Networking

Welcome & Introductions

Presentation

Profit Focused Enterprise Framework for Retail

Fully Allocated P&Ls at MasterCard Worldwide

Oracle HPCM Overview

Dinner & Networking

Event Closure

2

Event Agenda

3

One of the largest full service Oracle Platinum EPM/BI Partner whose

sole focus is Oracle Business Analytics.

240+ W2 Hyperion experts across product suite. Dedicated team stands

behind our implementations from start to finish.

Proven track record in global, multi-product, large scale Oracle EPM/BI

implementations.

Best in class consultants both technically and with EPM business

processes.

Oracle ACE Consultants across the Oracle EPM and BI Stack

Over 95% of consulting team certified in Planning, HFM, Essbase, DRM,

BI, and Infrastructure and many hold certifications in multiple

products.

Ranzal has specializations and in-depth experience implementing all of

the products envisioned within the solution architecture.

20+ Years

1000+ Clients

2000+ Projects

Edgewater Ranzal Overview

4

Financial Close & Consolidations

BusinessIntelligence/Big Data

EnterprisePlanning & Analytics

Data IntegrationServices

Training &Support Services

Advisory ServicesInfrastructure

Costing &Profitability

Mgmt

Business Intelligence/Big Data

• Scorecards & Dashboards; Mobile Delivery

• Prepackaged Analytic Applications (OBIA)

• BI Foundation (OBIEE / Essbase)

• Financial & Operational Analytics

• Reporting & Publishing

• Big Data

• Information Discovery (Endeca)

• Business Intelligence Cloud Service (BICS)

Financial Close & Consolidations

• Legal, Segment, & Mgmt Reporting

• Financial Performance & Close

• Optimization & Performance Lab

• Tax Provisioning

• Regulatory Requirements

Data Integration Services

• ERP Integration

• Financial Data Management

• Data Warehousing

• MDM & DRM

• ETL Services and Automation

Infrastructure

• Hardware Sizing, Installation, & Configuration

• Exalytics Benchmarking

• System Monitoring, Backup, & Disaster Recovery

• Upgrade & Migrations

Advisory Services

• Project/Program Management & Process Change

• EPM & BI Road Maps

Training & Support Services

• Standard & Custom Training

• Virtual Classroom

• Multimedia and UPK

• Service Level Agreements

• Managed Services & Hosting

• Performance Engineering

Enterprise Planning & Analytics

• Strategic Planning (HSF) & Modeling

• Planning, Budgeting & Forecasting

• Workforce, Capital, & Project Financial Planning

• Public Sector Planning

• Cloud Services

Costing & Profitability Management

• HPCM Standard & Detail Models

• Waterfall Allocations

• Shared Service Charges

• Activity Based Costing

• Customer, Product, Segment & LOB Profitability

Edgewater Ranzal Services Overview

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. |

About the Speaker – Mark Wright

BIO

Mark Wright, Principal Sales ConsultantOracle

Accounting 10 yrsManagement Consulting 7 yrsEPM software 8 yrs

Roles - Accounting Mgr, Director ofProfitability & Center of Excellence

EmphasisStrategy, Planning and Profitability

6

About the Speaker About the Speaker About the Speaker About the Speaker –––– Rufus WilliamRufus WilliamRufus WilliamRufus William

Strategize, Implement and Sustain Hyperion and BI Platforms at MasterCard.

Prior Experience

IBM Cognos – EPM Architects

Oracle Partner – EPM Sr. Principle Consultant

Education

Engineer – Electrical & Electronics

MBA – Systems and Marketing

7

Senior Vice President of Technology & Strategy� Planning & Analytics Practice Lead for 5 Years

� Helped Establish Ranzal’s UK Division

� Responsible for driving growth through strategic initiatives – currently focused on HPCM, DRM & BI

� Works from Ranzal’s Corporate HQ in White Plains, NY

Oracle Certified Professional� Essbase, Planning & HFM

� Oracle ACE – Business Intelligence

19+ Years of Functional & Technical Experience In:� Budgeting, Forecasting & Planning

� Cost Allocation & Profitability Management Solutions

� Business Intelligence

� Master Data Management & Data Integration

� Solution Architecture & Design

� Process Rationalization & Transformation

Client Engagement Portfolio Includes Various Industries:� Financial Services & Insurance

� Consumer Products and Retail

� Professional Services

� Telecommunications

� Higher Education

� Health Care

Works Closely with Oracle Product Management on Enhancements & Direction

About the Speaker – Mike Killeen

Profit-Focused Enterprise ™

Framework for Retail

Mark Wright

– Oracle Principal Solutions Consultant


Oracle Hyperion EPM ApplicationsIdentify Opportunities & Create Shareholders Wealth with HPCM

Financial Analytical Platform (Essbase)

Strategy

Management

Profitability

Management

Planning and

Forecasting

Financial Close

and Reporting

User Workspace, Reporting

FDMDRM

1 –ReportGAAPStatutory

2- GenerateDecision Information

4- Create Financial, Sales& Op Plans

GartnerCPM

3- Develop Strategy


HPCM and The Profit-Focused Enterprise™

Oracle Confidential – Internal/Restricted/Highly Restricted 10

� Visual White Paper (link) � Infographic (link)� Blog (link)

How to Dive Deeper into Profit …

� PFE Brief (link)

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | Oracle Confidential – Internal/Restricted/Highly Restricted

11

The “Right” Customers• Targeted Marketing• Market Basket Analysis• Sales Strategy

• Customer Profitability• Top, Middle, Bottom

The “Optimal” Product Mix• Pricing Considerations • Vendor Negotiations • Product Rationalization • Product Profitability

• Top, Middle, Bottom

Process Improvement• Supply Chain Monetization • Outsourcing / Procurement • Support • Delivery / Channel

Resource Alignment• Tops Down Strategy• Align expenses to most profitable

Customer/ Product Dimensions• Capacity / Utilization Analysis

Policy Execution• Product Substitutions • Sales Incentives • Shared Services Behaviors • Minimal Orders

Align Capital• Redirect Interest Expense • Invest in Profitable Clusters• Maximize ROI

CustomersCustomers

ProductsProducts

PoliciesPolicies

ProcessesProcesses

CapitalCapital

Profit ClustersProfit Clusters

Strategic P&Ls

Oracle’s Approach - Profit-Focused Enterprise™

Maturity

PFE™ ScorecardResourcesResources

Re

ve

nu

e A

tta

inm

en

tR

ev

en

ue

Att

ain

me

nt

Op

era

tio

ns

Op

tim

iza

tio

nO

pe

rati

on

s O

pti

miz

ati

on

Re

sou

rce

Ali

gn

me

nt

Re

sou

rce

Ali

gn

me

nt

Margins.1 to 2.5%

of Revenue

Se

gm

en

tati

on

Se

gm

en

tati

on


Product A

Product B

Product C

Revenue Gross Margin Net Margin Stacked Clusters

1.0 2.0 3.0 4.0

$1,000M

$750M

$500M

$250M

$400M

$450M

$350M

$125M

$(150)M

$200M

$250M

$75M

Strategic Emphasis

$200M

$75M $275M

$2,500M $1,325M $375M $275M

What is Your Profit Decision Maturity Level?

Totals

Company Score

1.75DIMENSION

Product D

Profit Clusters (*)

(*) By any Profit Cluster including Product, Customer, Channel, Vendor, etc.

SKU � Maturity Levels �


Profit Clusters – Exploiting the Whale


If you can generate a whale curve by Customer, by Product, by Channel, etc, you’re well

on your way to being able to make intelligent decisions about your business.

50% 15% 35%

$140 Mil

$81 Mil

Why $60M Loss?

SKUs Profit Detail?

Strategic P&Ls


Revenue $1,000

Retail Strategic P&Ls (Layering)Shared

Services

(HR, IT, ACCT)

Capital $

Headquarters

Op Ex $

Merchandisers &

Warehouse

Operations

Supply Chain,

Assembly, Mfg

Operations

Sales / Marketing &

Store Operations

SKU

Vendor CustomerWarehouseDistribution

CenterFreight Transport Transport

Pick, Pack,

ShipStock Channel

DELIVERYPROFIT

Direct (350)

Semi-Direct (450)

Indirect (300)

($100)

Strategic P&LsStrategic P&Ls


Profit by SKU

Profit by DC


PFE™– Systematic Improvement

1 Analyze Profit Clustering 1

2 �� 2 Understand Details in Strategic P&Ls

�� 3 Fix Root Causes – Drivers KPIs

o

3

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | Oracle Confidential – Internal/Restricted/Highly Restricted

16

Align Capital• Redirect Interest Expense • Invest in Profitable Segments• Maximize ROI

CustomersCustomersProductsProducts

PoliciesPolicies ProcessesProcesses CapitalCapital

Summary - Use HPCM to become a PFE™

Customer P&LChannel P&L Vendor P&L Warehouse

P&L

SKU P&L

Etc.

HPCM

Strategic

P&Ls

Sales Person

P&L

One Version of Truth

InitiativesThe “Right” Customers• Targeted Marketing• Market Basket Analysis• Sales Strategy

• Customer Profitability• Top, Middle, Bottom

The “Optimal” Product Mix• Pricing Considerations • Vendor Negotiations • Product Rationalization • Product Profitability

• Top, Middle, Bottom

Process Improvement• Supply Chain Monetization • Outsourcing / Procurement • Support • Delivery / Channel

Policy Execution• Product Substitutions • Sales Incentives • Shared Services Behaviors • Minimal Orders


Profit-Focused Enterprise ™ Topics


Score the PFE Topics Assess each strategy in relation to maturity to determine potential profit improvement.

™

1.7%

.75%

.05%

2.5%

™

2

3

4

1


Oracle Client PFE™ Detail Results


Oracle Client PFE™ Results1.36% of Revenue Potential

The PFE™ maturity of an enterprise determines the potential profit improvement

Conservative - PFE™ - Aggressive

Copyright © 2014 Oracle and/or its affiliates. All rights reserved. | Oracle Confidential – Internal/Restricted/Highly Restricted 21

Profit-Focused Enterprise™ Assessment Offering

½ - 1 Day PFE™ WorkshopPartnership with

Access to Key Stakeholders

FinanceMerchandisingMarketing / SalesSupply ChainStore OperationsEcommerce

Oracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer Story

Fully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard Worldwide

February 24, 2016

Jonah Rufus William

Business Leader – Financial Systems

23

MasterCard Customer Story AgendaMasterCard Customer Story AgendaMasterCard Customer Story AgendaMasterCard Customer Story Agenda

• Business Background & Challenges

• Solution Overview

• Business Benefits & Lessons Learned

• Future Plans

• Q&A

1

2

3

4

5

24

MasterCard BackgroundMasterCard BackgroundMasterCard BackgroundMasterCard Background

• We are payments technology leader providing customers with faster, simple and safe payments solutions.

Hyperion @ MasterCard

Mgmt. Reporting

Entity

Mapping

Work Force Product

P&L

2011 2012 2013 2014

Local

Currency

Driver

Local Currency

Exposure

FX

FTE

SPA - II

Implementation Stabilization Expansion

Budget

Breakout

Performance

Tuning

2015

Commitment

Lights Out

Automation

StratPlan

Customer

P&L

2010

Payroll

Renovation

2016

D&A

Revenue

Attribute

Local Actual

M&A

Cash Flow

Hyperion

UpgradeManagerial

P&L

Expense

Mgmt. BI

Rev. Rec.

Application Automation / Enhancement / Project BI

Stabilization

Expansion Road Map

� A&M

� BI – Europe Rept.

� CDF / MDF

� Hyperion B&F 3.0

(Entity, Local Forecast, Budget Tracker,

SPA…)

� BI – Mgmt. / PA Rept.

� Mgrl. P&L Phase 2

1 Monthly Close

2 Strategic Planning

Annual Budget3

Quarterly Forecast4

8 Workforce Planning

9 Monthly Customer P&L (COS)

Quarterly Product P&L (PPL)10

Local Currency Exposure11

Monthly Payroll Process5

Commitment Collection Process12

M&A Reporting6

Managerial P & L13

Cash Flow7

BI Updates14

Revenue

Expense

25

MasterCard ChallengeMasterCard ChallengeMasterCard ChallengeMasterCard Challenge

1. Fully Loaded Country P&L

2. Transparent Rules

3. Sound and Simple Methodology

4. Faster System

5. Fit within Hyperion Framework

26

MasterCard StrategyMasterCard StrategyMasterCard StrategyMasterCard Strategy

1. Prototype in MS Access & Excel

2. Obtain buy in from impacted business owners

3. Assess solution fit with in Oracle Platform

4. Develop Functional Pilot in Requirements & Design

5. Implement & Rollout

6. Build Future Roadmap

27

MasterCard Solution OverviewMasterCard Solution OverviewMasterCard Solution OverviewMasterCard Solution Overview

• Guiding Principle: Tiered approach to attribute Revenue & Margin between Direct/Dedicated and Indirect/Overhead.

1. Drivers – Revenue Based or Metrics Based

2. Actual from Oracle General Ledger

3. M1: Revenues & Directly associated expenses no allocation

4. M2: Dedicated expense mapped to country

5. M3: Support expense allocated to country

6. M4: Overhead expenses allocated to country

7. Actual from Oracle GL gets allocated using the guiding principle

8. Simple rule to produce Tiered P&Ls applied after allocation

9. Validation reports are run to ensure data accuracy

10. Results published via Prebuilt FR or SmartView

28

Fully Allocated P&LFully Allocated P&LFully Allocated P&LFully Allocated P&L

Margin 1

Margin 2

Margin 3

Margin 4

VarianceExplanation

29

HPCM Model Architecture HPCM Model Architecture HPCM Model Architecture HPCM Model Architecture –––– Stage DesignStage DesignStage DesignStage Design

Cost CtrAccount* Data Type

GeoDivision*

GeoDivision*

Geo*Division

Stage 1 – Financial Detail

Stage 2 – Fin. Pool

Stage 4 – Tier 2

Stage 3 – Tier 1

► HPCM allocates Costs &

Revenue Pools through

one or more stages in a

top down capacity

► Stage – Step in the

allocation process that

has similar pool

characteristics

► Separate stages enable

traceability.

Cost Pool

Tier 1 (Div) Allocs or Pass Thru (Direct)

Tier 2 (Geo) Allocs or Pass Thru (Direct)

Sum Account/CC to Cost Pool (Direct)

AccountCost Ctr Data Type GeoDivision GeoDivisionCost Pool

1-3-4 Genealogy Allocation Results

1-3-4 Genealogy

30

MasterCard Solution HighlightsMasterCard Solution HighlightsMasterCard Solution HighlightsMasterCard Solution Highlights

1. Planning App to stage, validate inputs and consume

2. Relational model to contract and expand data grain

3. Front end to assign rules

4. Prebuilt Tiered report

5. Trace Screens

31

MasterCard Lessons LearnedMasterCard Lessons LearnedMasterCard Lessons LearnedMasterCard Lessons Learned

1. Trace Screens work at allocation grain

2. Need a reporting solution to make end user consumption easy

3. HPCM is a maturing product

4. Success or Failure depends on the partner’s experience – project completed on time and on budget

32

MasterCard HPCM Future PlansMasterCard HPCM Future PlansMasterCard HPCM Future PlansMasterCard HPCM Future Plans

1. Explore use of Management Ledgeri. Movement of historical management restatements from the

general ledger

ii. Would require upgrade to 11.1.2.4

2. Product & Customer Profitability migration to HPCM

3. Delivery of Dashboards to Business Users using OBIEE

33

Jonah Rufus William, Financial Systems Business Leader

Business Analytics Solutions Provider Using Oracle EPM, BI, and Big Data Technologies

Retail Profitability Dinner

An Overview of Oracle

Hyperion Profitability & Cost Management

(HPCM)

Mike Killeen, Oracle Ace, Sr. Vice President, Technology

BLT Prime, New York, NY

Feb 24, 2016

Challenges in Profitability Management Delivery

Profitability and Cost Management Solution

Overview

Retail Demo: Oracle Hyperion Profitability &

Cost Management (HPCM)

Q&A

Appendix

Profitability & Cost Management Cloud Service

HPCM New Features

35

HPCM Overview Agenda

Recap: Profitability Management Goal –Delivery of Strategic P&Ls

2

Financial

transactions

Financial

Data

Consolidation

(GL or HFM)

AccumulatorBottom-line

Results

Organizational P&L

37

What defines a profitable customer?

What is the profit contribution 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?

Challenge #1 - Statutory Reports are not Timely or Detailed Enough

No Standard Process

Standard,

accepted

process

� Indirect Costs are tracked

against supply side

structures, not demand

side needs. This makes

measurement difficult

38

Challenge #2 - Indirect Cost Assignment to Products, Services & Customers

Meaningful Cost Assignments Requires a Varying Approach By P&L Line

•Revenues, Returns

•Discounts, Allowances, Accruals

•Store By Product

•Store Specific

•Invoice Details

•% Net Sales to Product

•COGS

•Inventory Charges

•Store By Product

•Product Specific

•Invoice Details

•% Net Sales to Customer

•Operating Expense - Labor

•Operating Expense – Non Labor •Org Channel or Product Line

•% Time Spent (Activities, Employee)

•% Net Sales to Customer

•Selling Expense

•Marketing Expense

•Org, Channel

•Org, Product Line

•Rep Commission, % Net Sales

•Initiatives, Trade Spend $

•Shared Services (IT, Fin, HR)

•Corporate Overhead

•Organization

•Overall Corporate

•Service Catalog, Projects, Mgmt Fee

•FTEs, Net Revenue, Square Footage

P&L Line Items Typical Dimensionality Allocation Method & Drivers Used

8

Sales/ Product

Managers

Cost Center Managers

LOB Execs

Finance10’s

100’s

1000’s

1000’s

LOB/Functions

Segments/Entities

Departments

Products & Customers

User Counts

Data Volumes

FrequencyOf Use

100’s

1000’s

10K’s

1 MM’s

Qtrs

Monthly

Weekly

Daily

40

Challenge #3 - Consistent Performance as Volume & Use Increase

ReliabilityVisibly defensible profitability and cost results through transparency & audit/control

AgilityTimely reflection of results to be actionable

RelevanceAn ability to Allocate resources to the most important opportunities

Financial Results

Revenue & Cost Models

Operational Results

FP&A

Senior Management

41

Expectations of a Profitability ManagementSolution

Overview of Oracle Business AnalyticsProfitability Management Solution

42

BI Foundation: Info Delivery

EPM Apps: Information Generation

Master Data, Data Quality & Data Integration Tools: Information Management

43

Oracle Business AnalyticsArchitecture

Solution Architecture with HPCM

Ad Hoc Published Reports

HPCM Data Mart

Hierarchies, Attributes &

Maps

Web

Office

Manual Data

Input

Pre & Post-Allocations Data Processing

Attributions & Adj

ETL/FDMEE

GL or HFM

OperationalSystem

.txt file

.csv file

Calculations

Validations

Centralized Reporting

Supply Plan

DemandPlan

OBIEE Reports

DRM

44

Information Management: Pools & Drivers

InformationGeneration

Information Delivery

Information Management:Master Data

Packaged Profitability functionality

Business User-Driven application

Tightly integrated with the full Hyperion EPM Suite

45

Solution Element: Hyperion Profitability & Cost Management (HPCM)

Why HPCM? To Meet these Key Requirements…

Flexibility

• Analyze different contractual approaches to yield optimal mix of services versus costs incurred by the client.

• Provide What-If Capabilities to assess impact of key business decisions on bottom line

Audit & Accuracy

• Provide key stakeholders confidence in the numbers produced and methodologies employed to ensure compliance.

Speed

• Ensure data is timely enough to be actionable

• Ensure system provides “speed of thought” response in reporting and analysis to support Ad-Hoc questions

Transparency

• Allow managers to understand cost to serve and client profitability

• Understand why some clients are profitable and others are not, and what can be done to change business behavior

Organizations need information management solutions

to address the challenges.

These needs can be abbreviated as F-A-S-T!

46

47

Group Services (e.g. Property, Controllership, IT)

Product Profitability

Customer Profitability

Group Overhead (e.g. CEO)

Division 3

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Group HQ

Operational

Profitability

"BI"

Shd Svcs

Expense

Allocations

Inter Unit Charges (e.g. Xfer Pricing, Contractual Charges)

Division Services

Fully Alloc

P&L

"Thin

Ledger"

Inter Unit

“Regulatory”Division 2

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Division Services

Division 1

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Division Services

Multiple HPCM Use Cases

48

HPCM Has Multiple Model Types toSolve Different Allocation Problems

Version 11.1.1.1 Version 11.1.2.0 Version 11.1.2.4

Management Ledger

Fully Allocated P&L

Standard Cost Rate

Development via ABC

Customer

Profitability

HFM/GL

Actuals

Planning

Bgt/FcstBI

Reporting

HPCM Workflow & Demo

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

DRM, EPMA, EssbaseOr File

DimensionsHierarchiesAttributes

HPCM

Financial Reports, Smart View,Business Intelligence

Foundation

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

4. Create Assignments

4. Create Management Ledger Rules

Model Execution

StagesDrivers

Driver SelsRules

Assignments

Standard Model

Detailed Model

Management Ledger Model

Calc CubeBSO

Rept CubeASO

CalcsRDBMS

Contr.ASO

DestinationASO

Calc/ReptASO

SourceASO

HPCM Workflow

Demo - Define POV, Business & Driver Metric Dimension Master Data

Business DimsPOV Dimensions Driver Metrics

AccountDivision

Product (Future)Pool

ProductPool

Division

Stage 1 – General Ledger

Stage 2 – Cost Pool

Stage 3 - Store

Stage 2 - Cost Pool Intra

Stage 4 - Product

Retail Model Stage Design

ProductDivision

Product MarginDirect

4-Wall StoreOpex

Home Office,Dist

StoreAlloc,

By Prod(Future)

StoreAlloc,

No Prod

Product AllocBy Store

Home Office, DistAllocs

1. Pool/Map2. Intra-Stage Allocation3. Inter-Stage Allocation

HPCM allocates Costs &

Revenue Pools through one or more stages in a

top down capacity

Stage – Step in the allocation process that

has similar pool characteristics

Separate stages enable

traceability.

Demo - Create a New Point of View (POV) to House Your Model

Create New POVs with different combinations of Financial Data, Driver Metric Data, and Model Definitions

HPCM Allocation Model Definition Components

Source Stage

2 - Cost PoolTarget Stage

3 - Store

Pool

Product

Division

Driver

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

dimension combination and the target

Assignment Rule

Driver Definitions – Create an allocation

formula/methodology that references a

loaded metric within the model.

1

2

3

4

2 3

14

4

19

Demo - End Users Define Drivers in HPCM

Select from list of user

defined driver metrics and

allocation methodologies.

1

Demo - End Users Assign Drivers to Source Cost Pools in HPCM

Select Default Drivers for Cost Pools, with

an ability to provide exceptions

2

Demo - End Users Create Target Range Assignment Rules in HPCM

3

Demo - End Users Map Source Stage to Targets Via Assignments

Or Allocation Assignments can be bulk

loaded via a staging table.

4

Demo – Pre-Run Model Validation – Multiple

Reports

Demo – Post Model Validation – Stage

Balancing Report

Jump to Smart View to see unbalanced results

All Costs should be Allocated to Final Stage

Demo – Traceability Analysis – What makes up an

allocation charge?

Closing and Q&A

62

FlexibilityBusiness Users can Run Multiple Versions to assess impact of business changes

Business Power User facing application – limited IT involvement in running the model

AccuracyProfitability Workflows are now an automated, repeatable processes

Meaningful cost drivers and methods for cost pools ensures greater acceptance of published results

SpeedBusiness Users Can answers questions that impact operational and pricing decisions quickly.

Reporting Analytical Platform supports speed of thought ad-hoc reporting as well as user guided analysis

TransparencyExcellent visibility throughout the allocation process.

Operational Managers now understand operational profitability and cost to serve via the analytical platform.

Summary –Typical Project Outcomes

63

Does your company understand the true costs of its products or services?

Are costing models transparent enough? Can you easily trace back the assigned costs to the

activities and line item expenses that drive them?

Do your costing methods operate at the right level of detail?

Are you satisfied that you are allocating shared services (e.g. IT/HR) accurately?

Are people spending too much time maintaining our costing models and other elements of

our costing system?

Can people in your company quickly test how changes to commodity, input costs, lower or

higher volumes will affect our profitability?

Are you getting answers from our costing systems fast enough to be actionable? Would

reducing this process time improve our competitiveness or profitability?

Is all of the data that you need to understand true costs available in a single ERP system? If

not, what are the initial and ongoing costs of integrating that data into your ERP system?

Self-Evaluation Questions

64

Closing and Q&A

Edgewater Ranzal Contact Info:

108 Corporate Park Drive, Suite 105, White Plains, NY, USA 10604

US: +1-914-253-6600 E-mail: [email protected]

65

Mike Killeen

Sr. Vice President of Technology

[email protected]

Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM

Business

Transcript of Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM