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Implementing Oracle Hyperion Profitability

and Cost Management in a Professional

Services Firm

Prepared by:Pete CammisaEPM Project LeadInnovus Partners

Session ID#: 14914

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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Presenter Biography■ Pete Cammisa , Chairperson OAUGNJ, Managing Partner,

Innovus Partners▪ Over three years HPCM consulting experience, over 5 years

EPM consulting experience— Telecom

— Insurance

— Professional Services

■ Expertise in technical implementation of Essbase, Planning and HPCM

■ Deployed over 15 EPM solutions■ Primary Application Experience

▪ Profitability & Cost Management Solutions

▪ Budget & Forecasting Solutions

▪ Management Reporting Applications

*PeopleSoft*JD Edwards World*JD Edwards EnterpriseOne*E-Business Suite*Hyperion/EPM/BI*HCM General /Applicable to All*Financial Services

Tracks Focused on:

For more information visit: Innovate14.Eventbrite.com

MAXIMIZE your current investment in Oracle solutions & PLAN for the future!

FRIDAY MAY 16, 2014

THE WOODBRIDGERENAISSANCE

HOTELISELINNEW

JERSEY

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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Profitability Project Overview

Prepare & Analyze

Prototype & Socialize

Build & Rollout

• Assemble team

• Gather business requirements

• Determine data availability

• Design allocation model(s)

• Prepare roadmap

• Create HPCM application

• Create Drivers• Import

(subset) Assignments

• Import (subset) cost/revenue and driver data

• Run model• Validate model• Socialize

model

• Create any additional Drivers

• Import all Assignments

• Import all data (cost/rev/driver)

• Run model• Validate data• Migrate to

Prod• Train users• Present results

to management

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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HPCM Product Overview

■ What is HPCM?■ Cost and revenue allocation tool■ Flexible in allocation method - TBC / ABC / custom■ User driven process■ Single point of maintenance■ Traceability and audit trail■ Essbase or Relational back-end■ Integrated into the EPM suite

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HPCM Product Overview

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HPCM Product Overview■ Stages

▪ A stage provides the definition of a slice of data in the HPCM Model. The Stages are key

building blocks in an HPCM model since the allocations occur from stage to stage (inter

stage) or within a stage itself (intra stage). A Stage in HPCM is made up of up to three (3)

dimensions. An application may contain up to nine (9) stages.

■ Drivers

▪ Drivers provide the allocation method or formula by which data is allocated from a Source

to a Destination. The HPCM software provides default drivers such as Simple, Even, or

Percentage, while also allowing the user to create unlimited custom drivers to fit their

needs.

■ Assignments

▪ Assignments in HPCM represent the relationships in the data between stages (mappings).

Assignments must be represented by all dimensions in the source stage and all dimensions

in the destination stage. Assignments can be within a stage (intra stage), from stage to

stage, or skip stages, but must always flow downstream.

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HPCM Product Overview Assignment Rules

When creating assignments, destinations can be selected one-by-one or by applying

assignments rules. That is to say that for a single source, there may exist multiple

destinations. This method of assigning destinations by using Assignment Rules is usually

more efficient for calculations scripts to generate, calculate, and maintain.

Direct Allocations vs. Genealogy Allocations Direct allocations occur downstream from stage to stage. They represent data that has a

direct relationship from the source to the destination of the assignment.

Genealogy allocations occur up and down stream. The results of the genealogy allocation

represent data that has an indirect relationship. (i.e. Stage 3 back to Stage 1)

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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Functional Requirements

■ For our discussion, the business requires that the solution provide:▪ Ability to allocate revenue and expense actuals by Account,

Department, Activity and Client

▪ Ability to drive allocations using metrics such as Headcount and Billed hours

▪ Ability to report on and analyze revenue and expense allocation detail by Account, Department, Activity and Client

▪ Ability to provide client-level profitability detail

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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Design Objectives

■ Design a solution that will:▪ Accept data imported from source systems (i.e. GL or HR

systems)

▪ Allow for business-specific driver definition

▪ Allow for system or user entry of driver values

▪ Process cost and revenue allocations on a monthly basis

▪ Process cost and revenue allocations by Account, Department, Activity and Client

▪ Allocate cost and revenue data using Drivers such as Headcount and Billed hours

▪ Provide end-user reporting for cost and profitability by Account, Department , Activity and Client

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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Technical Design - Overview

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Technical Design - Dimensionality

■ HPCM System Dimensions:▪ Measures

▪ AllocationType

■ POV Dimensions:▪ Year

▪ Period

▪ Scenario

■ Business Dimensions:▪ Account

▪ Department

▪ Activity

▪ Client

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Technical Design - Stages

■ Stage 1 – General Ledger (Department, Account)▪ This stage represents the data loaded from the General Ledger

■ Stage 2 – Activity (Activity, Department)▪ This stage represents data through an Activity “lens”. In our example, Stage 2

receives data that results from the Stage 1 allocations.

■ Stage 3 – Client (Client)▪ This stage represents the end state of the allocations. Once the data reaches

this stage, it should be fully allocated and visible through the client “lens”.

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Technical Design - Drivers

The profitability solution can use a combination of standard HPCM drivers along with User Defined Drivers.

■ HPCM Drivers:▪ Simple

▪ Even

▪ Percentage

■ User Defined Drivers▪ Custom Driver 1

▪ Custom Driver 2

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Technical Design – Driver Selection■ The Driver selection is made at the members of the driving dimension of

each Stage. Exceptions can be defined with members from each dimension of the Source Stage to define the Driver Selection. Exceptions are less efficiency and more maintenance intensive and so they should be used sparingly.▪ In our application, Department is the driving dimension for Stage 1. A sample

Driver Selection would be at the member “Sales_Marketing”. That Driver would be Even and so the costs associated with the “Sales_Marketing” Department would be allocated to each assignment in Stage 2 evenly.

▪ In our application, Activity is the driving dimension for Stage 2. A sample Driver Selection would be at the member “EPMConsulting”. That Driver Selection would be Billable Hours and so the costs associated with the Activity “Consulting” would be allocated to each assignment in Stage 3 using the Billable Hours Driver.

Source Stage Dimension/Member DriverStage 1 - General Ledger Sales_Marketing Even

Source Stage Dimension/Member DriverStage 2 - Activity EPMConsulting Billable Hours

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Technical Design – Assignments■ The profitability solution can use a combination of standard Assignments

and Assignment Rules.▪ A Standard Assignment is specifically defined by selecting a member from each

dimension in the Source Stage and each dimension in the Destination Stage.

▪ An Assignment Rule is defined at the Source dimensions and creates assignments to the Destination Stage based on a set of criteria. That criteria can include member name, outline relationship, attribute, or a UDA. Assignment Rules are typically more efficient to process. Their use also reduces maintenance.

Stage 2 -> Stage 3S2AT_Department S2AT_Activity S3CL_ClientEssbasePractice Consulting Client100PlanningPractice Consulting Client100HFMPractice Consulting Client300

Stage 1 -> Stage 3S1GL_Department S1GL_Account S3CL_ClientSales_Marketing Sales_Marketing_Expense @RELATIVE(All Clients,0)

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Presentation Agenda

■ Presenter Biography■ Company Profile■ Profitability Project Overview■ HPCM Product Overview■ Functional (Business) Requirements■ Design Objectives■ Technical Design■ Profitability Solution■ Next Steps■ Questions

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HPCM Process Flow

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Profitability Solution

■ Stage Balancing Report

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Profitability Solution

■ Web Analysis View

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Next Steps…

■ Training, training, and more training■ Build a Planning application to collect Driver and Assignment

data■ Build an interface to support loading the staging tables■ Build a reporting application to sit out in front of the HPCM

application reducing dimensionality down to the core dimensions and service end-users

■ Build Web Analysis views and Financial Reports to distribute data

■ Integrate results into Driver based planning model

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Wrap-Up & Questions

■ Questions■ Let’s continue the conversation…

▪ Email me: Pete@InnovusPartners.com, Pete@OAUGNJ.org

▪ Connect on LinkedIn

▪ Follow me on Twitter @PeteCammisa

▪ Gather knowledge at www.innovuspartners.com/blog

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