Diane furst re hyperion

Compliance Update

Mike MalwitzSr. Product Marketing Manager

Hyperion

Copyright © 2005, Hyperion. All rights reserved. P. 2

The Financial/BPM Market

Hyperion 2x nearest competitor2004 Worldwide Financial/BPM Revenues2004 Financial / BPM Market Shares

HYSL21%

ORCL9%

COGN8%

SAP7%

Other55%

97.2

121

119

292.6

64.3

61.88GEAC

SAS

SAP

COGN

ORCL

HYSL

Note: 40% Market Share in Financial Consolidations!

Source: IDC, 2004IDC counts software license and maintenance in their revenue estimatesIDC derives their numbers independently, without validation from Hyperion

2004 Total Market: $1.4B2004-2009 CAGR of 11.3%


Corporate Performance ManagementGartner Magic Quadrant

The Magic Quadrant is copyrighted 2005 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner'sanalysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner.Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the "Leaders" quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action.Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Magic Quadrants for CPM Suites, 2005: October, 2005; N Raynor, F Buytendijk, LGeishecker


Hyperion is Recognized by Analysts at IDC and AMR

H. Morris, R. Blumstein, D. Vesset,"Worldwide Total Analytic Applications Software Competitive Analysis, 2003: 2002 Shares and Current Outlook“. August 2003

“Hyperion retains its position (held since IDC established the category in 1997) as the leading analytic applications vendor by revenue…”

Hyperion Vendor Profile, February 2003

“Hyperion has an excellent position and vision into financial performance management.”


Business Performance Management Cycle

Strategy

Customer profitability

Benchmarking

Financial ModelingFinancial reporting

Sales planning

Procurement andsupplier analysis

Working capital management


Data

Information

Value Added Actions

Finance Performance Level

Business Impact

Change AgentStrategic Level

ScorekeeperOperational Level

Business PartnerTactical Level

• Focus on Critical Issues• Resource Allocation• Corrective Actions

ExecutiveScorecards& Models

BusinessReporting and Analysis

• Data Analysis• Decision Support

• P&L, Balance Sheet Delivery• Transaction Efficiency• Fiscal Reporting

Local IT Systems

Customer Example: Business Reporting Systems, Process and People Linkage

Core Business Processes


The Most Complete Solution Offering

BUSINESS PERFORMANCE MANAGEMENT SOLUTIONS

BPMAPPLICATIONS

HYPERIONBI PLATFORM

Scorecarding and Dashboarding

ModelingPlanning,

Budgeting and Forecasting

Consolidation and Reporting

Tailored Applications

Analytics Performance Metrics

Query and Reporting

Enterprise Reporting

Developer Tools

Core and Data Integration Services

LEGACY MDB DW ERP CRM


Agenda

Consolidation AccountingGovernance, Compliance and Business Performance Management– Analyst Viewpoints– Business Challenges (SOX, COSO, etc.)

Financial Consolidation, Reporting and Compliance— Features and Benefits


Consolidation Accounting

Accounting CycleMechanics of the Close – subledgers, general ledgers, consolidation and reportingManagement vs StatutoryStandard Setting BodiesRecognition and MeasurementConsolidation and Reporting

— ARB51/IAS27: Consolidated Financial Statements and IntercompanyEliminations

— FAS94/IAS27: Consolidation of Majority-Owned Subsidiaries — FAS 8/FAS52/IAS21: Foreign Currency Transactions and Translations— FAS95/IAS7: Statement of Cash Flows— FAS131/IAS14: Disclosures about Segments of An Enterprise


In September, IBM in collaboration with the EIU completed the global CFO survey data collection with 889 CFOs and senior finance professionals

Distribution by Geography

Americas, 44%

EMEA, 33%

Asia Pacific, 23%

Distribution by SectorComms, 14%

Distribution, 23%

Financial Services, 26%

Industrial, 25%

Public, 12%Less than $1B,

18%

$1B to 5B, 24%

$5B to 10B, 27%

Greater than $10B, 31%

Distribution by Business Turnover

Distribution by Title

CFO/Deputy CFO/CRO/SVP, 40%

Treasurer / Audit / Sr. Business /

Other, 4%

Finance Mgr, 6%

en'l Mgr, SSCs, 8%

Controller/Asst Controller, 18%

Finance Director/VP, 23%

Distribution by Scope

Enterprise / global, 47%

Region, 17%

Country, 20%

BU / Program Area, 15%

CFO Survey 2005 Firmographics

Source: IBM Business Consulting Services, The Global CFO Survey 2005


Executive SummaryCFO Survey 2005 Summary

Finance is emerging from a period of foundation-buildingFoundations are enabling the linkage of controls/risk, performance management and business insightIntegration of information can catalyze the close alignment on Finance’s focus and effectivenessThe agile Finance organization utilizes processes, tools, technology and organization to balance business needsEmerging model for Finance keeps the upside opportunity and downside risk in balance to maximize returns


Overall Finance aspires to manage performance, drive greater insight and value, strengthen controls and meet fiduciary requirements

Finance’s Top Areas of FocusMost Important Areas of Focus in Role as a Finance Professional

Percent of High Responses (Responses = 870)

Source: IBM Business Consulting Services, The Global CFO Survey 2005

0% 20% 40% 60% 80% 100%

Meeting fiduciary and statutoryrequirements

Leading finance-related complianceprograms and strengthening the internal

control environment

Continuous process improvement /business improvement

Partnering with your organization to identifyand execute growth strategies

Measuring / monitoring businessperformance

Aligns with the profitable growth agenda identified in IBM’s 2004 CEO study

Reflects the top priority identified in IBM’s 2003 CFO study

Reflects the current regulatory environment

Managing performance

Driving insight and

value

Managing controls and

risk


Need for Performance VisibilityRegulatory

Requirements

FragmentedSystems

High Cost of Information Access

Unreliable Plans & Forecasts

ComplexOrganizations

Reporting & Controls Overhead

Pressure on Profitability

Earnings Expectations


Components of a Compliance Architecture

SarbanesSarbanes--OxleyOxley

EU DPDEU DPD

IASIAS Basel IIBasel IICFR Part 11CFR Part 11

Basel IICFR Part 11

Business Process Management, Integration Broker, BAMAssert Process Controls

CPMReporting and Risk

Acronym KeyERP = enterprise resource planning EU DPD = European Union Data Protection Directive

BusinessUnit

Systems

CRM andCustomer-

Facing Systems

FinancialandERP

Systems

Classify, Analyze, InterpretBI Infrastructure, Tools and Applications

Document and ArchiveRecords Management, Document Management, Knowledge Management,

Content Management and Storage

Identify, Audit, Secure and ProtectIdentity and Access Management, Network Security and Business Continuity


PWC Whitepaper on Spreadsheets and SOX

Change ControlVersion ControlAccess ControlInput ControlSecurity and Integrity of DataDocumentationDevelopment LifecycleBackupsArchivingLogic InspectionSegregation of DutiesAnalyticsBottom Line: Almost impossible to build a compliant spreadsheet environment –evaluate a purpose built application instead.www.pwcglobal.com


What’s New: COSO2 ERM

New with COSO2

The four objectives categories - strategic, operations, reporting and compliance - are represented by the vertical columns. Strategic objectives are new.The eight components are represented by horizontal rows. Objective Setting, Event ID and Risk Response are new.The entity and its organizational units are depicted by the third dimension of the matrix.

New with COSO2

New with COSO2


““While identifying control deficiencies and significant deficiencies represents an important component of management's assessment, the overall focus of internal control reporting should be on those items that could result in material errors in the financial statements.”

US Securities and Exchange Commission

Commission Statement on Implementation of Internal Control Reporting Requirements

May 16, 2005


““The internal control environment extends to …the period-end financial reporting process including the preparation of both annual and quarterly financial statements, including controls over procedures used to record recurring and nonrecurring adjustments to the financial statements (for example, consolidating adjustments, report combinations, and reclassifications).”

US Securities and Exchange CommissionPCAOB Auditing Standard No. 2March 9, 2004


Global Issues

International Financial Reporting Standards— Recognition and Measurement— Consolidation and Reporting— Transition Issues— US-GAAP Harmonization— Segment Reporting— Impairment (Fair Value) analysis— UK Operating and Financial Review (OFR)

Sustainable Development ReportingCanadian Continuous Disclosure Obligations— (aka “Bill 198” or “NI 51-02”)— Canadian Version of Sarbanes-Oxley


IFRS Success Stories

WELLAFlexibility of HFM was key to IFRS compliance at Wella AG Dr Dietmar Scheja, who was Head of Corporate Financial Analysis at Wella AG faced significant issues after the group had completed its IFRS implementation.“We had separate consolidation models for management and financial reporting. They were never completely in step and we had the added burden of making sure that what we reported externally to shareholders in IFRS agreed with what we were saying to management.”The flexibility of HFM really became apparent when the Wella Group was taken over by Procter and Gamble and was required to report under US GAAP as well as IFRS and local GAAP. “At first we simply added US GAAP adjustment members to the existing custom dimensions and put through the larger adjustments at a consolidated level. But later we were able to push responsibility for US GAAP adjustments down to the reporting,” says Dr Scheja. “HFM was also vital in allowing us to reconcile results between US GAAP and IFRS so that we could explain the differences”.“The most outstanding benefit of HFM is its flexibility. We were able to accommodate US GAAP when it was suddenly sprung on us and prepare profit forecasts in HFM very quickly and relatively easily without incurring big consulting costs. This really was a key benefit”.


IFRS Success Stories

FINANCIAL TIMES (Pearsons)Centralised web based model gave Pearson Group plc visibility of IFRS Pearson Group plc, the publishing giant which owns the Financial Times has dual listings in the UK and the United States. As such, Andrew Midgley, Head of Financial Reporting had to cope with complex multi-GAAP issues when transitioning the group from UK GAAP to IFRS. “It was difficult at first because there was considerable uncertainty around the application of standards which were still subject to change,” says Midgley. An initial paper based exercise quickly identified the types of IFRS adjustments that had to be handled at the centre and those which could be posted by the reporting units. “There were fewer adjustments at the reporting entity level than we had expected and they tended to be relatively small. They mainly related to acquisitions, intangibles, leases, and joint ventures,” says Midgley. “Adjustments at the centre were bigger and more complex and included pensions, share option expense, deferred tax and financial instruments.” Given this relatively straightforward background, the group was quickly able to establish a unified chart of accounts in HFM covering, UK GAAP, IFRS and US GAAP. It was then a simple matter to post the adjustments against these accounts as required.Segmental reporting was a challenge but the group was already accustomed to the concept under US GAAP even though not all of the detail is required to be published in the US.


Sarbanes-Oxley Background

Most significant legislation since the Great Depression11 major sections (or “Titles”)

— Public Audit— Corporate Responsibility— Financial Disclosures— Brokerage Practices— Penalties

Adoption by SEC is proceeding










IDC Compliance Chasm Excerpts220 CFOs Surveyed



How Hyperion Addresses Key Compliance Requirements

Upstream/HAL, FM Dimensions, Journals Module, Task/Data Audit

Clear audit trails from source to 10K¥10Q (2003)

SAS99

Financial Management – That’s what it’s all about!

10K in 75 days moving to 60 (2005)Accel. Filings

Financial Management “What If” capabilitiesPro-forma reconciliations

Off-balance sheet trans. (2003)

401

Financial Management, Hyperion BI PlatformRapid disclosure of material changes –“Real Time” reporting (Mar 2004)

409

1. FM - Close and Reporting Controls and Audit Trails

2. Integration with Hyperion Technology and GSI Partners: IBM Business Controls,Axentis, Upstream, OpenPages

Annual assessment of effectiveness of internal control and COSO Compliance (Dec 2004)

404

Cascading certification with FM Process Management, Doc Attachments, Cell Text

Quarterly certification of financial statements (2002)

302

Hyperion SolutionRequirement/Eff. DateSect.


Agenda

Consolidation AccountingGovernance, Compliance and Business Performance Management– Analyst Viewpoints– Business Challenges (SOX, COSO, etc.)

Financial Consolidation, Reporting and Compliance— Features and Benefits


Disconnected Silos of Information

XL

Word

Email

ppt


Unifying Financial Information

Documentation


FM/SOX Presentations at Hyperion’sSolutions 2005 User Conference

Migrating From Hyperion Enterprise to Financial Management at Comcast: Christine Diantonio, Comcast & Tara Krause, ComcastAchieving Sarbanes-Oxley and Continuous Improvement Objectives Within the Corporate Reporting Cycle: Heather Wilson,PricewaterhouseCoopers & Dean Curtin, PricewaterhouseCoopersMeeting Sarbanes-Oxley Requirements With Hyperion HUB: Edward Roske, interRel ConsultingDelivering Accountability Across the Enterprise With Financial Management at TV Guide: Diane Furst, Gemstar-TV GuideInternationalOptimizing Financial Reporting With Financial Management at Kansas City Life Insurance: Rob Fisher, Kansas City Life Insurance & Jeff Branton, MarketSphereMeeting Sarbanes-Oxley Compliance and Beyond With Financial Management at Royal AHold: Tim Wassman, Axentis


Hyperion Financial Management Benefits

Tax/TreasuryDetailed AnalysisInternal ReportingExternal ReportingProduct Line Profitability

Accelerates Reporting Cycles and Reduces Costs of Compliance

Shortens close-cycles to report in a timely and accurate mannerUnifies financial and operational results into “one version of the truth”Provides complete audit trails and process controls to reduce costs of complianceProvides detailed management information for better decision makingAutomates processes so Finance staff can spend more time on analysis


Close Process…It’s Not Easy!

Local Regional Central

ERP/GL

Monthly/Quarterly

Actual ResultsInput/Load

SubmitValidate

Input/LoadSubmitValidate

Input/LoadSubmitValidate

MonthlyForecast

AnnualBudget

Process

• Review

• Approve

• Adjust

• Consolidate

Submit

Approve

Reject

Reject

Approve

Approve

Reject

Approve

Process

• Review

• Approve

• Adjust

• Consolidate

• Intercompany

• Currency

PublishReports

SECTax

LegalTreasury

Management


Hyperion Financial Management Features

Patented financial consolidation and reporting featuresComplete audit trails, workflow and validations “Smart Dimensionality”Flexible "what if" scenario management featuresPowerful, reporting and analysis toolsFull integration with ERP and other transaction systems Easy to customize and extendWeb-architected

Market-leading Financial Consolidation and Reporting Application


Financial ManagementSOX-Specific Features

Segregation of Duties— Roles— Classes— Authentication— Metadata security

filtering

Documentation— Cell Text and

Document attachments

Change Control— Versioning of metadata— Comparisons of

metadata updates

User Monitoring— Users on System

Audit Trail— “G/L to 10Q” Audit Trial— Task Audit— Data Audit— System and Event Logs— Intercompany Transactions

User Interface— Process Management

— Control mechanism for data submission

— Signoff required— Prevent Control Validations

enforced— Workspaces

— Control how a user interacts with system (Basic vs Advanced)

— Provide controlled task flow— Task Automation

— Repeatable Processes


User Interface - Process Management


Annotation Indicator

Attachment of full MS Word Commentary,

then Print In HyperionReports


Hyperion Shared Services -Metadata Compare


XBRL Output From Financial Reporting: Available Now!

JDE

SAP

Oracle


Summary

Business Performance Management Has Major Role in ComplianceSarbanes-Oxley has had a profound impact on U.S. businessesHyperion has the right applications and tools to helpHyperion customers are well equipped to handle Sarbanes-Oxley, IFRS and any other regulations