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Profitability and Risk Analysis with Essbase
Alain FlochSenior Sales Consulting Manager, BI, Oracle Systems Hong Kong & Taiwan
Agenda
• Analytic Challenges• Introduction to Essbase• Demonstration• Value of Essbase for Profitability and Risk Analysis
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Analytic Challenges
“Not all Questions are Created Equal”
BI Experts Say….
Questions Can be Worlds Apart
What is our performance?
• What are the top 10 markets?
• What is the gap to forecast?
• What customers are most profitable?
• What are revenues by product compared to last year?
• What are sales by product, store and quarter?
• What is the trend for employee-related costs?
• What is our open headcount?
How can we improve performance?
• How can we increase promotional lift by 10% in our major markets?
• What happens to our forecast if the dollar declines by 5% to the Euro?
• What happens to gross margin if our materials costs increase by 20%?
• Which customers drive 80% of our overall profitability?
• What happens to same store sales if inventory turns increase by 5%?
Situational Forward-looking
Distinct BI Solutions Have Addressed What Should be a Seamless Continuum
Ad-Hoc Query& Reporting
Standardized Reporting
AdvancedAnalytics
Modeling
Future Oriented
Operational Static
Strategic Dynamic
Past Oriented
The Business Intelligence Continuum
Which customers spend the most?
What did this customer buy?Which customers are most profitable?
What if demand falls short of forecast?
What if we rolled out this product nationwide?
Will our cash balances take us through this crisis?
What is the Q4 revenue forecast?
Future OrientedPast Oriented
Operational Static
Strategic Dynamic
Modeling
Standardized Reporting
• Dashboards• Publishing• Pixel-perfect
• What-if• Scenarios• Allocations
Diverse Needs in the “BI Pyramid”
AdvancedAnalytics
Ad-hoc Query & Reporting
• Predictive Analytics• Allocations / Aggregations• Set-based Analysis
• Slice and Dice• Parameter-driven• Self-service
BusinessInsight
Gap
Oracle’s Unified BI FoundationMeeting All BI Pyramid Needs
Oracle BI Suite EE Plus
CommonEnterprise Information
Model
• Consistent definitions• Role-based views• Model-driven
• Interactive Dashboards• Ad-hoc query• Report Publishing
Oracle
BI
Applications
Essbase
• What-if• Advanced Analysis• Predictive Analytics
Essbase
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Introduction to Essbase
Highly Scalable BI Foundation
BUSINESS INTELLIGENCE FOUNDATION
Essbase BI Server Real Time DecisionsCommon Enterprise Information Model
EPM Workspace
OLTP & ODSSystems
Data WarehouseData Mart
SAP, Oracle, Siebel,PeopleSoft, Custom
BusinessProcess
OLAP
Fusion Middleware
BI ApplicationsPerformance ManagementApplications
EPM Workspace
ExcelXML
Essbase?
1 Richest Business User Experience
SmartView: Microsoft Office Integration
plus a range of superior reporting tools….
Visual Explorer is not just a slick way to visualize, it’s a slick way to visually analyze.
Wayne Eckerson, Industry Analyst, TDWI
Broadest Analytic functionality
– Drill, pivot, select, compare, rank, sort, filter, group stack, calculate, annotate, write back……..– Reporting tools enabled by the “Outline” – “Maps” to the business
Essbase?
1 Richest Business User Experience
2 Highly Advanced Calculation Engine
Superior Calculation Power
• Widest range of functionality: – Simple aggregations to complex
cross dimensional allocations– Results stored or calculated upon
retrieval– Relationship aware– Application wide or subset specific– Conditional and procedural logic
Comprehensive Library of Functions
• 350+ functions• Simple syntax• Extensible• Single point of
maintenance
Essbase?
1 Richest Business User Experience
2 Highly Advanced Calculation Engine
3 Best Custom Analytic Environment
Optimized Storage
Block
Aggregate
Hybrid
Advanced Relational Access
Forward Looking Applications
“Predictive Analytics… is where Business
Intelligence is going.”
• A spectrum of analyses
– Trending– Forecasting– Scenario modeling– What if testing– Goal seeking– OLAP mining
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Demonstration
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The Value of Essbase for
Profitability and Risk Analysis
Belk Department Stores Inventory Analysis and Store Profitability
Needs
Centrally manage financial data throughout the organization
Expand reporting and analysis to complement Lawson Financials
Eliminate paper based reporting with Web based access
Analysis of merchandizing plans Analysis of inventory levels and
sales opportunities
Headquartered in Charlotte, NC
Largest privately held department store chain in the US
275 stores in 16 states
After
Create monthly and year-to-date financial statements used to drive performance
Take action on key drivers - sales, margins, markdowns, and inventory levels and receipts
Calculate fully loaded store profitability
Turned store managers into expense champions
Belk Department StoresInnovative Retailing for Maximum Performance
“We are able to isolate all of the fixed costs that affect store profitability—the amount of square
footage, capital invested, inventory levels, and other fixed costs. That way, we can rank stores
appropriately,”
“Without Hyperion Essbase, we just couldn’t have performed the analysis we are doing today”
David PalmerVice President, Financial Services
Essbase – Speed of Thought Analytics
• Superior tools for the business user
• Broadest analytic functionality
• “Speed of thought” response
• Superior calculation power
• Comprehensive library of functions
• Extensive financial and time intelligence
• Optimized storage
• Enterprise scale forward looking applications
• Premium performance
Most HighlyAdvanced
CalculationEngine
RichestBusiness User
Experience
Best CustomAnalytic
Environment
AQ&
Customer Profitability in Health Care
Previous attempt
Three day calculation times Additional week to produce reports IT required to maintain rate
changes and calculations Limited insight into customer
profitability
Leading distributor of name-brand medical and surgical supplies – 51 distribution centers in the US
$5.5 billion in revenue (2006)
200,00 SKUs / 20,000 customer accounts
After
Identified top 10 low profit customers in each geography
Profile of each customer now shows operational characteristics as well as programs and services purchased
Developed what-if scenarios providing a roadmap to increased profitability for targeted accounts