Profitability Management with HPCM

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Edgewater Ranzal provides Business Analytics solutions using Oracle EPM and BI technologies

Transcript of Profitability Management with HPCM

  • Dallas EPM ShowcaseDallas EPM Showcase

    Profitability Management with HPCM

    Dallas, TX, Feb 18, 2014

    Mike Killeen

    Vice President of Technology

    mkilleen@ranzal.com

  • Introduction

    The Need for Profitability Management

    How HPCM Enables Profitability Management

    Agenda

    How HPCM Enables Profitability Management

    Profitability Management Case Study

    Closing and Q&A

  • 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

    Edgewater Ranzal Overview & Differentiators

    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

    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

    Installation, Upgrades, Migration,

    System Monitoring, Backup and

    Recovery, Disaster Recovery, Load

    Consolidation

    Business

    Intelligence

    Enterprise

    Planning

    Edgewater Ranzal EPM & BI Service Offerings

    HPCM Standard & Detailed Models,

    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

    Recovery, Disaster Recovery, Load

    Testing, Hardware Sizing, Exalytics

    Benchmarking 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

    HPCM Standard & Detailed Models,

    Waterfall Allocations, Activity Based

    Costing, Customer, Product & LOB

    Profitability

  • 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

    Installation, Upgrades, Migration,

    System Monitoring, Backup and

    Recovery, Disaster Recovery, Load

    Consolidation

    Business

    Intelligence

    Enterprise

    Planning

    Edgewater Ranzal EPM & BI Service Offerings

    HPCM Standard & Detailed Models,

    Ranzal has a long history of delivering Profitability Management Solutions

    1998 - Custom Essbase BSO Profitability Apps (5.x)

    2004 - Custom ASO/BSO Profitability Apps (7.x) Angel/Demon Customers

    2007 Paid Engagement with Hyperion Dev to review HPCM (Project Oslo)

    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

    Recovery, Disaster Recovery, Load

    Testing, Hardware Sizing, Exalytics

    Benchmarking 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

    HPCM Standard & Detailed Models,

    Waterfall Allocations, Activity Based

    Costing, Customer, Product & LOB

    Profitability

    2009 First HPCM Implementation replacing HBM (11.1.1.3)

    2012 Co-Developed Key Teach HPCM Training Course (11.1.2.1)

    Today 20 Successful HPCM Project Implementations

  • The Need for Profitability ManagementThe Need for Profitability Management

  • Profitability Management Goal Delivery of Strategic P&Ls

  • Profitability Challenge #1 -

    Statutory Reports are not Timely or Detailed Enough

    What defines a profitable

    customer?

    What is the profit

    contribution margin of a

    product or a service?

    What does it cost to sell

    to or to service

    Financial

    transactionsConsolidation

    (GL or HFM) to or to service customers?

    What proportion of

    resources does a specific

    customer consume?

    Why hasnt increased

    revenue resulted in

    increased profitability?

    transactions

    Financial

    Data

    (GL or HFM)

    AccumulatorBottom-line

    Results

    Organizational P&L

  • Profitability Challenge #2 -

    Indirect Cost Assignment to Products, Services & Customers

    No Standard Process

    Standard,

    accepted

    process

    No Standard Process

    Indirect Costs are tracked

    against supply side

    structures, not demand side

    needs. This makes

    measurement difficult

  • Profitability Challenge #3 Ensuring Consistent Performance as

    Users, Data Volumes, & Frequency of Use Increases

    Sales/Product Managers

    Cost Center Managers

    1000s

    1000s

    Departments

    Products & CustomersUser

    CountsData

    VolumesFrequency

    Of Use

    1 MMs Daily

    LOB Execs.

    Finance10s

    100s

    1000s

    LOB/Functions

    Segments/Entities

    100s

    1000s

    10Ks

    Qtrs

    Monthly

    Weekly

  • Profitability Management Solution Elements

    Reporting & Analysis

    Product P&L by Activity

    Financial P&L

    Operational

    Data

    SourceData

    MeaningfulAttributions &

    Allocations

  • Source Data - Financial P&L

    LegendC Customer Specific CostsP Product Specific CostsF Financial/Overheads

    Type P&L Line $ % of RevC/P Units Sold 100

    C/P Gross Sales 1,000$ 102%C/P Less Disc, Rtrns & Allow. (20)$ -2%

    Net Sales 980$ 100%C/P COGS @ Std 400$ 41%

    Raw Materils, Labor, Freight In, Mfg Ovhd

    Core Statutory Fields

    Account

    Company/Legal Entity

    Affiliate/Partner

    High Level Management Fields

    Cost Center/Department/Geography

    Profit Center/Product Line/Channel

    Project and Related Attributes

    While some elements of product profitability C/P COGS @ Std 400$ 41%F COGS @ Var 23$ 2%

    Less: Total COGS 423$ 43% Gross Profit 557$ 57%

    P/F/O Selling & Marketing Exp 150$ 15%F G&A Exp 100$ 10%

    Less: Total Operating Exp 250$ 26%Operating Income 307$ 31%

    F Depreciation & Amortization (75)$ -8%F Other Inc/(Exp) (50)$ -5%

    Net Income Before Taxes 182$ 19%Less: Income Taxes @ 40% 73$ 7%Net Income After Taxes 109$ 11%

    Dept Costs:AccountingMgmtIT

    Mfg Plant Departmental Exp Variances

    While some elements of product profitability and customer profitability may be present, they are typically at a much higher level (e.g. many SKUs rolling up to a Product Line, or many Customers rolling up to a Channel)

    Significant manual effort may be involved in achieving this (e.g. Thick G/L, XL, Manual Journals)

    Complete Financial Results also occur at the close, where its often too late to react

    Need to be more detailed, timely, transparent & automated to be actionable

  • SHIPPED TO SOLD TO TERMS: FROM INVOICE DATEXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX

    2% 15 daysNet 16, USD

    DIRECT INQUIRIES TO:1 (800) 999-9999

    INVOICE SHIP DATE 11/01/2004INVOICE DATE 11/01/2004