Oracle: Information’s Business Impact - Business Intelligence
description
Transcript of Oracle: Information’s Business Impact - Business Intelligence
Oracle BI Applications Project Summary
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Key Performance Indicator (KPI)
infoGROUP IncOpportunity
AnalysisImpact of Improvement
Baseline Value
($m)
KPI Value
Industry Average
(TTM)
Oppty.
($ m)Change
in KPIPotential
($ m)
SG&A Expenses Reduction
SG&A Expenses / Revenues (%) 255,228 51.05 -1% 2.55
Receivables Reduction
Day Sales Outstanding (DSO)
60 56.68 -2 day .90
Industry: AdvertisingSource: OneSource Data as of 01/20/2009
Opportunity Analysis
*Currency: USD, in millions
1. Integrate Financial to identify and create opportunities for synergizes to drive out cost.
2. Enable Payables and Receivables analysis to enable optimization and monitoring
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System Complexity Creates Chaos
MULTIPLE ROLES
DIFFERENTMETRICS
DISPARATE BI TOOLS & REPORTING SYSTEMS
FRAGMENTEDDATA SOURCES
Executive
Marketing
Finance
HumanResources
CustomerService
COMPANY HEALTH
BRAND
EBITDA
HIRING QUALITY
SERVICE LEVELS
FINANCE
OPERATIONS
PLANNING
Multiple Point Applications
Multiple ERP
MultipleSupply Chain
Multiple Legacy Applications
Multiple Data Warehouses
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Sample Legacy Reporting EnvironmentComplex and Expensive
Disparate Data Sources Disparate Reporting Tools
SQR
Reports,
Discoverer,
BI Publisher
MSRS
SAS,
Greenbar,
DataStation, …
SAR
output
MSAS,
ProClarity
Cognos
Business
Objects
N Vision
Crystal
Reports
Decision
Cast
PS Query
MBI
DTS
HR
GL
EBS
Mainframe
Headcount
Forecast
Data
Warehouses
HR, GL, EBS
Data Marts
Roles Use Multiple Tools
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Record to Report ChallengesDeliver High Value and Reduced Cycle Times
Collect data Close AdjustmentsCurrency
I/CSubsidiaries
ReportManagement
LegalExternal
Analyze
6 Days 12 DaysAverage
Collect Close Adjustment Report Analyze and Forecast
<2 Days 6 DaysWorld Class
More time!
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Oracle’s End to End SolutionRecord to Report
CloseClose ReportReportEliminateEliminateRecordRecord
Transactions Sub Ledgers
Accounting Accruals ResultsI/C
Activity Sub
Ledgers Foreign Currency
AnalyzeAnalyze ConvertConvert AdjustAdjust
Oracle
E-Business
Suite
Financial Analytic
Applications
HyperionIFRS/GAAP
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Sample Oracle Reporting EnvironmentSimplified and Effective
Single Source of Truth One BI Enterprise Solution Roles Use Single Platform
HR
GL
EBS
Mainframe
Headcount
Forecast
Data
Warehouses
HR, GL, EBS
Data Marts
BI AppsBI AppsData WarehouseData Warehouse
(Oracle DB)(Oracle DB)
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Improve Financial Timeliness and Analysis for
Improved Accuracy
• Single Source Best Practice method of financial data integration. Minimizes Control Testing Points.
• Ability to source data throughout the period and provide corporate visibility into financial status
• View across Organizations, Customers, and Products to address profitability and expense issues.
• Reduction in audit expenses due to consistent process and ability to track issues to source.
FDW Project Enablers• Multiple consolidation steps and manual
intervention can impact accuracy of financial data
• Late or Unexpected impact to earnings (Goodwill, etc.)
• Lack of understanding of profitability can lead to not changing behavior on supporting/selling/marketing poor yielding products.
What Risks Analytics Helps Mitigate
Opportunity• Lack of intra period reporting of Financials
• Accuracy of profitability analysis
• Complex and extensive audit process
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Improve Receivables Analysis and Focus to Reduce DSO and Improve Terms
• Identify trends around Reversals to provide feedback on which customers/products are biggest offenders
• Ability to monitor status and delays via a common score card
• Ability to pro actively identify source of late payment and escalate as appropriate
• Ability to trend impact of late payments relationship to uncollectable debt
• Ability to analyze customer trends to optimize payment and credit terms
FDW Project Enablers• Reversal behavior remain persistent, and no
trending is available to identify areas of concern
• Aged Debt becomes uncollectable and impacts balance sheet and shareholder value
• Miss-management of customers credit can result in customer churn
• Miss appropriated credit terms and decrease margin and increase expenses
What Risks Analytics Helps Mitigate
Opportunity• Lack of visibility into collections can cause focus to shift from late invoices
• Multiple sources of invoices complicates the collection process
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Improve AP Analysis and Focus to Manage Expense & Maximize Discounts
• Ability to monitor invoice delays via a common score card
• Ability to identify opportunities for vendor consolidation and negotiation
• Ability to report discount metrics by commodity, vendor, and organization
• Ability to analyze internal processes to optimize negotiated discount terms and associated discounts
FDW Project Enablers What Risks Analytics Helps Mitigate• Erosion of operating margin through increased
expenses
• Stricter payment terms can impact cash flow
• Misappropriated credit terms and decrease margin and increase expenses
Opportunity• Little visibility in to expense detail leads to lack of accountability
• Visibility can provide opportunity for consolidation and better costs and payment terms with core vendors
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Improve Financial Timeliness and Analysis for Improved Accuracy
• Single Source Best Practice method of financial data integration. Minimizes Control Testing Points.
• Ability to source data throughout the period and provide corporate visibility into financial status
• View across Organizations, Customers, and Products to address profitability and expense issues.
• Reduction in audit expenses due to consistent process and ability to track issues to source.
How Analytics Helps Achieve• Multiple consolidation steps and manual
intervention can impact accuracy of financial data
• Late or miss statement of earnings
• Lack of understanding of profitability can lead to pushing poor yielding products.
What Risks Analytics Helps Mitigate
Opportunity
• Lack of intra period reporting of financials
• Accuracy of profitability analysis
• Complex and extensive audit process
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Improve Receivables Analysis and Focus to Reduce DSO and Improve Terms
• Ability to monitor status and delays via a common score card
• Ability to pro actively identify source of late payment and escalate as appropriate
• Ability to trend impact of late payments relationship to uncollectable debt
• Ability to analyze customer trends to optimize payment and credit terms
How Analytics Helps Achieve• Aged Debt becomes uncollectable and impacts
balance sheet and shareholder value
• Miss-management of customers credit can result in customer churn
• Miss appropriated credit terms and decrease margin and increase expenses
What Risks Analytics Helps Mitigate
Opportunity
• Lack of visibility into collections can cause focus to shift from late invoices
• Multiple sources of invoices complicates the collection process
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Improve AP Analysis and Focus to Manage Expense & Maximize Discounts
• Ability to monitor invoice delays via a common score card
• Ability to identify opportunities for vendor consolidation and negotiation
• Ability to report discount metrics by commodity, vendor, and organization
• Ability to analyze internal processes to optimize negotiated discount terms and associated discounts
How Analytics Helps Achieve What Risks Analytics Helps Mitigate• Erosion of operating margin through increased
expenses
• Stricter payment terms can impact cash flow
• Miss appropriated credit terms and decrease margin and increase expenses
Opportunity
• Little visibility in to expense detail leads to lack of accountability
• Visibility can provide opportunity for consolidation and better costs and payment terms with core vendors
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Time to Benefit SummaryFocus on Reducing DSO & Expenses Can Yield $2.6M in Savings
• Benefits Based on a 1% Improvement in Expense 2 Day Reduction in DSO
• Achieved over 5 year at a 0.20% achievement per year
• 5 year cumulative benefit of $3.3M
-800-600-400-200
020040060080010001200
1080
554 554 554 554
-700
-90 -90 -90 -90
Cost
Benefits
$380
Year 1
$464 Net Benefit
Year 2 Year 3 Year 4 Year 5
$464 $464 $464
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Benefit CalculationsINPUTS Current Target
SG&A Expenses $255,228,000 -1.00%
Annual revenue (A) $499,913,000
Days Sales Outstanding (B,C) 60 58
Receivables balance (D=(A/365)*B,E=(A/365)*C) $82,177,479 $79,438,230
One-time reduction in accounts receivable due to lower days sales outstanding (F)=(D)-(E) $2,739,249
Cost of working capital (%) (G) 8
Annual Benefits (factoring growth and adoption rates) 20%
Annual Benefits (USD) Year 1 Year 2 Year 3 Year 4 Year 5
Reduction in working capital due to reduction in accounts receivable factoring adoption rate $548,000 $0 $0 $0 $0
Reduction in annual interest cost due to lower working capital due to reduction in accounts receivable $22,000 $44,000 $44,000 $44,000 $44,000
Reduce days sales outstanding factoring benefit adoption rate $570,000 $44,000 $44,000 $44,000 $44,000
Summary: Year 1 Year 2 Year 3 Year 4 Year 5Cumulative
Expenses $510,456 $510,456 $510,456 $510,456 $510,456 $1,531,368
DSO $570,000 $44,000 $44,000 $44,000 $44,000 $658,000
Total: $1,080,456 $554,456 $554,456 $554,456 $554,456 $3,298,280
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Solution Overview
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PackagedPackagedETL MapsETL Maps
UniversalUniversalAdaptersAdapters
IVR, ACD, CTIIVR, ACD, CTIHyperionHyperionMS ExcelMS Excel
Other Data SourcesOther Data Sources
Ad-hoc Analysis
ProactiveDetectionand Alerts
MS OfficePlug-in
Reporting & Publishing
Interactive Dashboards
DisconnectedAnalytics
WebServices
Oracle BI ApplicationsMulti-source Analytic Apps Built on BI Suite EE Plus
Oracle BI Apps built on
Oracle BI EE Plus• Prebuilt Hierarchies, Drill Paths, Security, dashboards, reports
• Common Enterprise Information Model
• Based on industry and analytic best practices
Oracle BI Applications
SalesService &Contact Center
Marketing
Supply Chain & Order
Management
Procurement & Spend
FinancialsHuman
Resources
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AutoAuto Comms& MediaComms& Media
Complex
Mfg
Complex
Mfg
ConsumerSector
ConsumerSector EnergyEnergy
FinancialServicesFinancialServices
HighTechHighTech
Insurance
& Health
Insurance
& Health
LifeSciences
LifeSciences
Public SectorPublic Sector
Sales Marketing Procurement & Spend
Supply Chain & Order
Management
HumanResources
PipelineAnalysis
ForecastAccuracy
Sales Team Effectiveness
Up-sell/ Cross-sell
Cycle Times
Lead Conversion
Employee Productivity
Compensation
Compliance Reporting
WorkforceProfile
RetentionAnalysis
Return on Human Capital
Revenue andBacklog
Inventory
FulfillmentStatus
CustomerStatus
Order Cycle Time
BOM Analysis
Direct / Indirect Spend
Buyer Productivity
Off Contract Purchases
Supplier Performance
Purchase Cycle Time
Employee Expenses
Campaign Effectiveness
CustomerInsight
Product Propensity
Loyalty &Attrition
Market Basket Analysis
Campaign ROI
Service &Contact Center
ServiceEffectiveness
Customer Satisfaction
ResolutionRates
Service RepEfficiency
Service Cost
Churn & Service Trends
Travel& TransTravel
& TransTravel
& TransTravel
& Trans
Financials
General Ledger
AccountsReceivable
AccountsPayable
Cash Flow
Profitability
ExpenseManagement
Oracle BI ApplicationsComplete, Pre-built, Best Practice Analytics
Oracle BI Suite Enterprise Edition Plus
and Other Operational & Analytic Sources
Source adapters:
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Financial Analytics Components
Pre-mapped metadata, including embedded best practice calculations and metrics for financial, executives and other business users
A “best practice” library of over 360 pre-built metrics, 30 intelligent dashboards, 200+ reports and several alerts for CFO, Finance Controller, Financial Analyst, AR/AP Managers and Executives
Pre-built ETL to extract data from over 3,000 operational tables and load it into the DW, sourced from PSFT, Oracle EBS and other sources
Pre-built warehouse with 16 star-schemas designed for analysis and reporting on financial analytics
• Presentation layer• Logical business
model• Physical sources
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202020 >> © 2008 Optimum Solutions Group, LLC
Architectural BI Foundation
ETL
Load Process
Staging Area
Extraction Process
DA
C
Oracle DataOracle DataWarehouseWarehouse
EBS
Excel
Other
BI Foundation
Oracle BI EE Plus
BI Applications
Finance
Web
Disconnected
Office
Alerts
Mobile
Desktop
Financial Analytics Includes:
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Oracle Financial AnalyticsComprehensive View of Financial Performance
General Ledger & Profitability Analytics• Incorporates detail-level general ledger transactions and cash flow analysis
across locations, customers, products, sales territories, distribution channels, and business units
• Identifies the customers and transactions that are providing maximum profits by product, location, department, and geographic detail. When combined with Marketing Analytics, it enables analysis of Campaign ROI and assists in customer segmentation
Payables Analytics• Provides visibility into payments due to suppliers and expense line detail so
managers can manage cash outflows and control expenses. When combined with Procurement & Spend Analytics, it allows full procurement analysis from Requisition to Check
Receivables Analytics• Monitors collections processes to show what customers buy and how they
pay, enabling managers to identify overdue balances and other receivables bottlenecks. When combined with Sales Analytics and Supply Chain & Order Management Analytics, it enables more efficient management of the entire Lead to Cash process.
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Finance Struggles to Use Intelligence to Maximize Cash Flow and Profitability
KEY CHALLENGES EXAMPLES
Lack of visibility into financial performance data
• No single integrated view of multiple charts of accounts• Poor or inconsistent financial metric definitions• Inability to integrate dozens of financial source systems
Poor management of cash inflow and outflow
• Lack of insight into payments to suppliers and expenses• Unable to obtain timely financial data across the enterprise• Limited information to identify overdue balances and other
receivables bottlenecks
Unable to support financial accountability and best practices
• Unable to comply with financial and accounting disclosure legislation such as the Sarbanes-Oxley Act and IAS/IFRS
• Inability to associate aggregated financial results to the line item details in the transactional data sources
Time wasted gathering data to manage and report
• Continued reliance on management-by-spreadsheet• Disparate financial reporting and poor internal distribution• Relevant data in multiple systems – CRM, ERP, etc.• No single source of the truth
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ANALYSIS & METRICS BENEFITSReceivables
• More timely, informed decisions at all levels of the organization
• Control expenses before they impact earnings
• Maximize cash flow from payables while maintaining relationship with strategic suppliers
• Control the risk of overall receivables portfolio
• Drive financial accountability to managers
• Receive intra-period financial information before books are closed
• Identify weak business units and product lines
General Ledger
Payables
Profitability
• Closing Group amount• DSO• Credit limit used %• AR payment days• Time paid before Due
• Total AR Overdue amount• AR due 1-30 amount• AR overdue 1-30 amount• AR credit memo amount• AR Average Invoice amount
• Accounts receivable• Debt to equity ratio• AR turnover• Cash cycle• Inventory turnover
• Fixed assets turnover• Operating cash flow• Investing cash flow• Financing cash flow• Net cash flow
• AP due 1-30 Amount• AP payment days• AP weighted days• DPO• Times paid before Due
• AP overdue 1-30 amount• Closing group amount• Total AP overdue amount• Overdue Amount to total %• AP average Invoice amount
Oracle Financial Analytics Provides Insight to Maximize Cash Flow and Profitability
• Return on equity• Return on assets• Return on capital• Gross margin %• Product operating profit
• Net Income margin %• Operating margin %• EBT margin %• Product gross profit• Customer gross margin
Why did we select the Packaged Solution for EBS?
2626© 2008 Oracle Corporation – Proprietary and Confidential
Building BI Solutions is CostlySignificant Investment, Skills and Time Required
• Single subject data warehouse typically takes 1-1½ years and costs $1.5-3 million.
• Support typically runs 25% - 50% of build costs per year.• When you upgrade the OLTP, you rewrite half your OLTP specific
ETL.• Design and Implementation Costs
• ETL and metadata design and implementation are 70% of preproduction costs – Henry Morris, IDC
• No, they are 80% -- Ralph Kimball• Costs rise dramatically if there are many data sources.• Therefore, concentrating on vendors’ prebuilt reports focuses
on the tip of the iceberg, not the part that sinks the ships.
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Build from Scratchwith Traditional BI Tools Oracle BI Applications
Prebuilt Business Adapters for Oracle, PeopleSoft, Siebel, SAP, others
Prebuilt DW design, adapts to your EDW
Role-based dashboards and thousands of pre-defined metrics
Easy to use, easy to adapt
Weeks or Months
Back-end ETL andMapping
DW Design
Define Metrics& Dashboards
Back-end ETL andMapping
DW Design
Define Metrics& Dashboards
Training / Roll-out
Training / Rollout
Months or Years
Results• Faster time to value• Lower TCO• Assured business value
Source: Patricia Seybold Research, Gartner, Merrill Lynch, Oracle Analysis
Oracle BI Applications Speed Time To Value Lowers TCO
Copyright © 2008, Oracle and/or its affiliates. All rights reserved. 27
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BI Applications – Ex. Build vs. Buy ComparisonCategory Element of Solution Typical Build Effort Buy (Average
Configuration Effort)
Define Metrics & Dashboards
Reports & Dashboards 2-4 Weeks 2-4 Weeks
Meta Data 7-10 Weeks 2-4 Weeks
DW DesignSchemas, Indexes, Aggregate
10-12 Weeks 1-3 Weeks
Back-End ETL and Mapping
Workflow & Scheduling 10-15 Weeks 2-4 Weeks
Transform & Load 12-20 Weeks 1-3 Weeks
Change Data Capture 8-9 Weeks 2-4 weeks
Staging 10-15 Weeks 1 Week
Extracts 12-15 Weeks 2-4 weeks
* Estimates Only (Assumes Typical Team Size 4-6 Full Time Resources)
71 – 100 Weeks 13 – 27 Weeks
73 % of Build Effort is Back End
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BI Applications - Classic Report Development
Application Dashboard Pages
Reports Average Build Effort Per Report
Weeks of Effort to Build
Content
Sales 33 620
24 Hrs (Using traditional reporting tools)
372Marketing 27 124 74Service 15 102 61Contact Center 17 72 43Finance 30 205 123HR 16 76 45Supply Chain & Order Mgmt.
18 157 94
Procurement & Spend
14 103 62
Total 317 2576 875
3030Copyright © 2008, Oracle and/or its affiliates. All rights reserved. 30
BI Applications – Standardization Benefits
TYPICAL CUSTOMER CHALLENGES
Fragmented view
Unintuitive
Data latency
Expensive to maintain
Slow deployments
Limited scalability
ROI
ORACLE Real Customer VALUE
Single view, 14 TB across 3 systems
7,000 out of 7,400 employees use
Real-time global view – 500 top execs
400 dashboards, 1,250 users, 1 admin
3,000+ users live in 3.5 months
1,000,000+ users on 15 TB of data
500%; $30M savings
3131Copyright © 2008, Oracle and/or its affiliates. All rights reserved.
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BI Applications Reduces Risk and Lowers CostLeverages Investment, Skills and Time Required
License an ETL tool to move data from operational systemsto this DW
License interactive user access tools
License/create information delivery tools
Research/understand analytic needs of each user community
Set up user security & visibility rules
Perform QA & performance testing
Manage on-going changes/upgrades
Develop detailed understanding of operational data sources
Build ETL programs for every data source
Build analytics for each audience
Design a data warehouse by subject area
License an ETL tool to move data from operational systemsto this DW
License interactive user access tools
License/create information delivery tools
BI Applications Standardize Platforms
Develop detailed understanding of operational data sources
Build ETL programs for every data source
Build analytics for each audience
Design a data warehouse by subject area BI Applications Provide Time to Value
BI Applications Robust Architecture
Research/understand analytic needs of each user community
Set up user security & visibility rules
Perform QA & performance testing
Manage on-going changes/upgrades
Seeded Dashboards, Reports, and Metrics put focus on delivery vs. creation generating savings by faster deployment
Common Architecture Provides for Efficient and Cost Effective Extensibility & Scalability
Single Technology Stack and Vendor Support lower overall Support and Maintenance Costs
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Additional Un-quantified Benefits Tangible Yet Un-monetized Value
• Common enterprise-wide Business Intelligence and Operational / Financial Reporting platform.
• Reduced cost of ownership and improved time-to-value using a shared library of pre-built standard metrics and reports.
• Better, faster, accurate, more informed fact-based decisions.
• Enhanced visibility into detailed business data for trending, root cause analysis, period-to-period comparisons, what-if and forecasting.
• Flexible open technology enables integration of financial and operational data.
• Single source of truth for all information eliminates manual data gathering.
• Enable drilling from summary to detailed transaction level information via logical linkage to operational systems and data.
• Easy to use with minimal end user tool training thereby increasing adoption.
• Drive financial accountability down to the business.
• Receive intra-period financial information before books are closed.
• Empower everyone with relevant, complete and consistent information tailored to their function and role.