Oracle Open World 2013

CON9501 - Oracle HPCM:

Cost Allocations at Mercer HR Consulting

Sep 25, 2013

Mike Killeen

Vice President

mkilleen@ranzal.com

Stuart Croucher

Senior Associate

Stuart.Croucher@mmc.com

► Introduction

► Business Process & Approach

► Solution Overview

► Outcomes

► Closing and Q&A

Agenda

► Oracle Platinum Consulting Partner - 100% Focus on Oracle/Hyperion Business Analytics (EPM/BI)

– 175+ Full time EPM/BI Billable Consultants throughout the US, Canada and the United Kingdom

► EPM & BI Experience & Success

– 1,500+ Oracle EPM & BI projects successfully delivered since our founding in 1996

► Depth & Breadth of EPM & BI Service Offerings

– Product Experts across the full EPM/BI Suite - Planning, HFM, HSF, HPCM, Essbase, OBIEE, DRM, FDMEE

– Visioning & Roadmaps, Full Life Cycle Implementations, Tech Review & Assessments, Staff Augmentation

► Additional Value Added Service Offerings

– Exalytics – Installation, Configuration & Benchmarking Services

– Infrastructure Services – Design, Configuration, Performance Tuning & Upgrades

– Support Services – Remote Help Desk, Lev 1 Support, Patch release Support

– Training Services - Customized and Pre-Packaged EPM/BI Training Delivery

► 3 Ranzal Oracle ACEs Across EPM/BI Platform (Planning/BI, HFM & FDMEE)

► Co-Development Efforts with Oracle Product Management

► Customer Advisory Boards, Beta Testing, Certification Exam Development

Edgewater Ranzal Overview & Differentiators

• Workforce Planning

• Balance Sheet Planning

• Capital Planning & PFP

• HFM

• Financial Close Mgmt

• Disclosure Management

• HPCM

• HSF

• FDMEE/ERPi & EPMA

Dashboards & Scorecards, Financial Analytics & Reporting, Operational Analytics, What-if Analysis,

Query & Reporting, Visual Exploration

Financial performance, Legal, Segment & Mgmt Reporting, Financial Close

HFM Optimization, Performance Lab SOX Compliance Support

Strategic Finance, Planning, Budgeting, Forecasting, Workforce Planning, Capital Planning, Project Financial Planning

Data Integration, Financial Data Management, Data Warehousing, Master Data Management &DRM,

ETL Services, Automation Project/Program Mgmt, EPM Road Maps, Application Reviews, Business Requirements, Process Change, Documentation

Installation, Upgrades, Migration, System Monitoring, Backup and

Recovery, Disaster Recovery, Load Testing, Hardware Sizing, Exalytics

Benchmarking

Consolidation

Business Intelligence

Enterprise Planning

Infrastructure

Training & Support Services

Project Management

Data Services

Costing & Profitability

Mgmt

Support Services – Infrastructure & Application Support Contracts

Key Teach Course Delivery: Planning, Essbase, Financial Reporting, Smart View, HPCM, HFM, FDM, DRM, OBIEE

Custom Training Delivery: Process & Reporting

Edgewater Ranzal EPM & BI Service Offerings

HPCM Standard & Detailed Models, Waterfall Allocations, Activity Based Costing, Customer, Product & LOB Profitability

Client & Project Background

► Project

• Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people.

• Mercer's 20,000 employees are based in more than 40 countries.

• Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital.

• Change in business focus towards a P&L approach for each Country and Business.

• A tactical MS Excel solution developed for this immediate need.

• The tactical solution was based upon Excel.

Business Process and Approach

Mercer needed an information management solution to address the challenges

Key Solution Requirements

Flexibility

• Analyze different chargeback approaches to yield optimal mix of services versus costs incurred by the shared service center.

• Rapidly evolve methodologies as the maturity model of the shared service center evolves.

Audit & Control

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

Shared Methodology

• Define consistent allocation and charge back methodology across all management cycles.

• Ensures consistent comparisons when reviewing and updating methodology result and planning for future management cycles.

Transparency

• Give BU’s the detail costs they incur for the service consumed.

• Also compares effectiveness of internal shared services with those of external providers to ensure efficiency.

Mercer needed an information management solution to address the challenges. These needs can be abbreviated as F-A-S-T!

Reporting & Analysis Financial Reports

Smart View for Office BI Foundation (OBIEEE/Essbase)

EPMA

Hyperion Planning Multi User Data Entry Task Lists & Workflow

Bottoms Up Calculations Reporting & Commentary

HPCM Multi-Step Allocation Modeling

Validation Reporting Traceability Maps & Analysis

Data synch: Costs by Account & Dept

Data synch: Direct Attribution to LOB

Data synch: Drivers by Account & Dept & LOB

Data synch: Results by Account & Dept & LOB

Shared Dimensions & Hierarchies (EPMA)

HPCM & Planning – Better Together

Business Process & Requirements

► Process Definition

1. Creation of a “Fully Burdened” dataset.

2. Attribute the “Fully Burdened” dataset.

3. Allocate the Costs to the lowest level of the business (Entity & C2 Dimensions)

► Current State

1. A large tactical MS-Excel and MS-Access Solution – 50+ Worksheets – (Need: Transparency)

2. Difficult to integrate the process – (Need: Shared Methodology)

3. Difficult to control changes – (Need: Audit & Control)

► Future State Definition

1. To deliver an allocation solution that combines the Planning and HPCM approach

2. Solution delivered on strategic software – providing a platform for future growth

3. Ability to easily run multiple versions

F-A-S-T Reqmts

• Rapid prototype delivered first in an Essbase cube

• Parallel Development

• EPMA Shared Dimensions – reduce maintenance

• Data managed in a staged approach

• Understand the Who’s/How’s/What’s

Approach

The Solution

Staging

Application

HPCM Source

Application

Driver Data

Hyperion Planning

Hyperion Profitability & Cost Management

Microsoft Excel

HPCM Stage

Management Utility

Solution Architecture

STG 1

BONUS

STG 2

PROP & ADMIN

STG 3

MGTI

STG 4

PRE ATTR

STG 5

POST ATTR

STG 6

PRE HPCM

STG 7

POST HPCM

STG 8

TOTAL ALLOC

Source

Application

SOURCE DATA

Source

Application

Business Logic – Calculations, Attributions & Allocations

Attributions & Allocations – Attribution Data Entry Form

Mercer Allocation Requirements

Entity Business Account

Entity Business

Entity Business

Entity Business

Department

Stage 1 - Global

Stage 2 - Regional

Stage 4 - Business

Stage 3 - Local

Stage 5 - Department

HPCM Model Architecture

► 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.

Source Stage

Project Detail Target Stage

Customer

Project

Dept

Resource

Customer

Project 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

1 4

4

HPCM Model Definition Components

HPCM Driver Definitions and Selections

Key Model Validation – HPCM Stage Balancing Report

Key Analysis – Trace Allocations in HPCM

Trace Allocation

Allocation

Source

Outcomes

Key Project Outcomes

• Excellent visibility throughout the allocation process.

• A platform for great reporting.

• Ability to run multiple versions.

• Low IT involvement (Run the Model).

• Can answer business questions quickly.

• A robust and repeatable process.

• Business areas can understand their costs – challenge the data not the process.

• Risk mitigation – Enterprise platform

Closing and Q&A

Visit us at Oracle Open World in the Exhibit Hall - 747 Moscone West

Edgewater Ranzal Contact Info: 108 Corporate Park Drive, Suite 105, White Plains, NY, USA 10604

US: +1-914-253-6600 E-mail: info@ranzal.com UK: +44 (0)2033 717174