MasterCard Worldwide Drives Performance Using Oracle HPCM

Edgewater Ranzal Lunch and LearnMastercard Drives Financial Performance

Using Oracle HPCM

Jonah Rufus William, Business Leader Financial Systems, Mastercard Mike Killeen, Oracle Ace, Sr. Vice President, Edgewater Ranzal

Tues Sep 20, 2016

About Ranzal

Edgewater Ranzal is a full-service Oracle Platinum Consulting Partner with premier services in North

America and a regional office in the United Kingdom.

1,000+ Oracle/Hyperion epm, bi, big data customers

2,000+ Oracle/Hyperionepm, bi, big data projects

PBCS

EPBCS

FCCS

ARCS

BICS BD Cloud

PCMCS

EPRCS

Planning

Suite

Fin Close

Suite

BI Suite

Cloud (SaaS/PaaS) On Premise

Big Data

HPCM

DRM

FDMEE

Governance

Engineered

Systems

FCM

Integration

3

• 17 Years in EPM & BI Space• Consulting• Managing Financials Systems

• Industry Experience• Technology• Retail• Finance• Education• Govt.

• Implemented EPM/BI at • Mastercard• DoE Mass• SGI• Staples• AAFES• Activision• Hindustan Lever etc.

• Worked at:• IBM Cognos as EPM Architect• Oracle Partner as Sr. Principal Consultant• Mastercard since 2006

Education

Engineer – Electrical & Electronics

MBA – Systems and Marketing

Strategize, Implement and Sustain Hyperion and BI Platforms

Business Leader | GBSC Systems

Presenter Bio

© 2016 Mastercard. Proprietary and Confidential

About the Speaker – Mike Killeen

4

Senior Vice President of Technology & Strategy� Planning & Analytics Practice Lead for 5 Years� Helped Establish Ranzal’s UK Division� Responsible for driving growth through strategic initiatives – currently focused on HPCM, DRM & BI� Works from Ranzal’s Corporate HQ in White Plains, NY

Oracle Certified Professional� Essbase, Planning & HFM� Oracle ACE – Business Intelligence

19+ Years of Functional & Technical Experience In:� Budgeting, Forecasting & Planning� Cost Allocation & Profitability Management Solutions� Business Intelligence� Master Data Management & Data Integration� Solution Architecture & Design� Process Rationalization & Transformation

Client Engagement Portfolio Includes Various Industries:� Financial Services & Insurance� Consumer Products and Retail� Professional Services� Telecommunications� Higher Education� Health Care

Works Closely with Oracle Product Management on Enhancements & Direction

Oracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer Story

Fully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard Worldwide

September, 2016

Jonah Rufus William

Business Leader – GBSC Systems

1. Hyperion @ Mastercard

2. Business Background & Challenges

3. Solution Overview

4. Business Benefits & Lessons Learned

5. Future Plans

6

Mastercard Customer Story Agenda


7

Keep things simple and stretch the boundaries, go beyond the general use of Hyperion / BI.

Mgmt. Reporting

Entity Mapping

Work Force

Product P&L

2011 2012 2013 2014

Local Currency

Driver

Local Currency

ExposureFX

FTE

SPA - II

Implementation Stabilization Expansion

Budget Breakout

PerformanceTuning

2015

Commitment

Lights Out Automation

StratPlan

Customer P&L

2010

Payroll

Renovation

2016

D&A

Revenue Attribute

Local Actual

M&A

Cash Flow

Hyperion Upgrade

Allocated P&L

Expense Mgmt. BI

Rev. Rec.

Application Automation / Enhancement / Project BI

Stabilization | Expansion

Fin - BI

Revenue

Expense

A&M Op Plan - BI

Cur. Neutral

Hyperion @ Mastercard


Hyp

eri

on

Sta

ts

20 • Hyperion Applications

30 %40 %

• 2015 Growth In Foot Print• 2014 Growth in Foot Print

14• Process Supported Globally

across 12 business units

600 • World Wide Users

1 Monthly Close

2 Strategic Planning

Annual Budget3

Quarterly Forecast4

8 Workforce Planning

9 Monthly Customer P&L (COS)

Quarterly Product P&L (PPL)10

Local Currency Exposure11

Monthly Payroll Process5 Commitment Collection Process12

M&A Reporting6 Managerial P & L13

Cash Flow7 BI Updates14

8

1. Fully Loaded Country P&L

2. Transparent Rules

3. Sound and Simple Methodology

4. Faster System

5. Fit within Hyperion Framework

Mastercard Challenge


9

1. Prototype in MS Access & Excel

2. Obtain buy in from impacted business owners

3. Assess solution fit with in Oracle Platform

4. Develop Functional Pilot in Requirements & Design

5. Implement & Rollout

6. Build Future Roadmap

Mastercard Strategy


10

Guiding Principle: Tiered approach to attribute Revenue & Margin between Direct/Dedicated and Indirect/Overhead.

1. Drivers – Revenue Based or Metrics Based

2. Actual from Oracle General Ledger

3. M1: Revenues & Directly associated expenses no allocation

4. M2: Dedicated expense mapped to country

5. M3: Support expense allocated to country

6. M4: Overhead expenses allocated to country

7. Actual from Oracle GL gets allocated using the guiding principle

8. Simple rule to produce Tiered P&Ls applied after allocation

9. Validation reports are run to ensure data accuracy

10.Results published via Prebuilt FR or SmartView

Mastercard Solution Overview


11

Margin 1

Margin 2

Margin 3

Margin 4

VarianceExplanation

Fully Allocated P&L


12

1. HPCM allocates Costs & Revenue Pools through one or more stages in a top down capacity

2. Stage – Step in the allocation process that has similar pool characteristics

3. Separate stages enable traceability.

Cost CtrAccount* Data Type

GeoDivision*

GeoDivision*

Geo*Division

Stage 1 – Financial Detail

Stage 2 – Fin. Pool

Stage 4 – Tier 2

Stage 3 – Tier 1

Cost Pool

Tier 1 (Div) Allocs or Pass Thru (Direct)

Tier 2 (Geo) Allocs or Pass Thru (Direct)

Sum Account/CC to Cost Pool (Direct)

AccountCost Ctr Data Type GeoDivision GeoDivisionCost Pool

1-3-4 Genealogy Allocation Results

1-3-4 Genealogy

HPCM Model Architecture – Stage Design


13

1. Planning App to stage, validate inputs and consume

2. Relational model to contract and expand data grain

3. Front end to assign rules

4. Prebuilt Tiered report

5. Trace Screens

Mastercard Solution Highlights


14

1. Trace Screens work at allocation grain

2. Need a reporting solution to make end user consumption easy

3. HPCM is a maturing product

4. Success or Failure depends on the partner’s experience – project completed on time and on budget

Mastercard Lessons Learned


15

1. Explore use of Management Ledger• Movement of historical management restatements from the general ledger

• Would require upgrade to 11.1.2.4

2. Product & Customer Profitability migration to HPCM

3. Delivery of Dashboards to Business Users using OBIEE

Mastercard HPCM Future Plans


Edgewater Ranzal Lunch and Learn

An Overview of Oracle HPCM

Mike Killeen, Oracle Ace, Sr. Vice President, Edgewater Ranzal

Tues Sep 20, 2016

HPCM Overview Agenda

17

Challenges in Profitability Management Delivery

Profitability and Cost Management Solution

Overview

Deep Dive into Oracle Hyperion Profitability & Cost

Management (HPCM)

Preview of Oracle HPCM Cloud (PCMCS)

Closing & Q&A

Recap: Profitability Management Goal – Delivery of Strategic P&Ls

19

Financialtransactions

FinancialData

Consolidation

(GL or HFM)

AccumulatorBottom-line

Results

Organizational P&L

Challenge #1 - Statutory Reports are not Timely or Detailed Enough

19

What defines a profitable customer?

What is the profit contribution of a product or a service?

What does it cost to sell to or to service customers?

What proportion of resources does a specific customer consume?

Why hasn’t increased revenue resulted in increased profitability?

No Standard Process

Standard,

accepted process

� Indirect Costs are tracked against supply side structures, not demand side needs. This makes measurement difficult

Challenge #2 - Indirect Cost Assignment to Products, Services &

Customers

20

Challenge #3 - Consistent Performance as Volume & Use Increase

21

Sales/ Product

Managers

Cost Center Managers

LOB Execs

Finance10’s

100’s

1000’s

1000’s

LOB/Functions

Segments/Entities

Departments

Products & Customers

User Counts

Data Volumes

FrequencyOf Use

100’s

1000’s

10K’s

1 MM’s

Qtrs

Monthly

Weekly

Daily

Reliability

Visibly defense profitability &

cost results through

transparency & audit/control

Agility

Timely reflection of results to

be actionable

Relevance

An ability to Allocate

resources to the most

important opportunitiesFinancial Results

Revenue & Cost Models

Operational Results

FP&A

Senior Management

Expectations of a Profitability Management Solution

22

Overview

23

Oracle Business AnalyticsProfitability Management Solution

Hyperion Profitability & Cost Management (HPCM)

24

Packaged Profitability functionality

Business User-Driven application

Tightly integrated with the full Hyperion EPM Suite

Why HPCM? To Meet these Key Requirements…

25

Flexibility Audit & Accuracy Speed Transparency

Organizations need information management solutions to address the challenges. These needs can be abbreviated as F-A-S-T!

Provide key stakeholders confidence in the numbers

produced and methodologies employed to ensure

compliance.

Ensure data is timely enough to be actionable

Ensure system provides

“speed of thought” response in reporting and

analysis to support Ad-Hoc questions

Allow managers

to understand cost to serve

and client profitability

Understand why some clients are profitable and others are not,

and what can be done to change business behavior

Analyze different contractual approaches to yield optimal mix of services versus costs incurred by the client.

Provide What-If Capabilities to assess impact of key business decisions on bottom line

Solution Architecture with HPCM

26

Ad Hoc Published Reports

HPCM Data Mart

Hierarchies, Attributes &

Maps

Web

Office

Manual Data

Input

Pre & Post-Allocations Data Processing

Attributions & Adj

ETL/FDMEE

GL or HFM

OperationalSystem

.txt file

.csv file

Calculations

Validations

Centralized Reporting

Supply Plan

DemandPlan

OBIEE Reports

DRM

Information Management: Pools & Drivers

InformationGeneration

Information Delivery

Information Management:Master Data

Multiple HPCM Use Cases

27

Group Services (e.g. Property, Controllership, IT)

Product Profitability

Customer Profitability

Group Overhead (e.g. CEO)

Division 3

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Group HQ

Operational

Profitability

"BI"

Shd Svcs

Expense

Allocations

Inter Unit Charges (e.g. Xfer Pricing, Contractual Charges)

Division Services

Fully Alloc

P&L

"Thin

Ledger"

Inter Unit

“Regulatory”Division 2

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Division Services

Division 1

Division Overhead

Fully Allocated P&L

(e.g. Product Line,

Channel, Region)

Division Services

Financial Close Use Cases� Improve Efficiency via Automation of Reports & Data

� Improve Effectiveness by enabling Transparency into drivers, pools & allocations

� Reduce Risk by eliminating manual spreadsheets and incorporating Stronger Controls through an integrated, standardized system.

Profitability Analysis Use Cases� Ensure Reliability of results through meaningful, Accurate methodologies

which generate Strategic P&Ls that tie back to published financial results.

� Improve Agility in key decision making process through Timely distribution of the stakeholders that need it.

� Improve the Relevance of published results by allowing organizations to Assess and Allocate resources to the most important opportunities

28

HPCM Business Benefits

29

HPCM Deep Dive

HPCM Has Multiple Model Types to Solve Different Allocation

Problems

30

Version 11.1.1.1 Version 11.1.2.0 Version 11.1.2.4

Management Ledger

Fully Allocated P&L

Standard Cost Rate

Development via ABC

Customer

Profitability

HFM/GL

Actuals

Planning

Bgt/FcstBI

Reporting

HPCM Management Ledger

31

ASO

EPMAHPCMHPCM repository

OR

ASOMetadata Cube

Calculation and Reporting

Meta

Data File

OR

Management Ledger- Metadata

32

System Dimensions POV Dimensions Business Dimensions

Management Ledger- Manage Rules

33

Management Ledger- Manage Rules

34

- Set-up sequence of

rule within a rule set- Select the option of

executing : - Serial

- Parallel- Iterative with

number of required iterations

12

3 .

45

User Interface and rule driven –no black box implementation with staging areas

Validationperformed at rule level Custom

MDX scripts

Traceability

available in various

formats

Iterative

rules for reciprocal

allocations

Management Ledger- Features

35

Unlimited Dimensions : Stage-less design allows 4 POV dimensions and unlimited business and attribute dimensions

Source side rules, iterative rule support for reciprocal allocations, flexible driver references, custom calculations, and easy clear / recalculation

Rule execution in parallel, serial, or iterations as needed, set by user

Balancing by rule with allocations sent and received as well as adjustment values detailed by rule

User defined slices through model views for enhanced rule balancing and trace analysis

Visual allocation trace from aggregate or granular level, detailed by rule

Management Ledger- Traceability

36

But what about Cloud?

37

PBCS2014

FCCS2016

PCMCS2016

Discover and Act on Hidden Profit and Loss

Empower Users with Flexibility

Improve Financial Decision Making

38

The Future - Oracle Profitability and Cost Management Cloud Service (PCMCS)

R$

E$

Discover Cost and Profit

Copyright © 2016, Oracle and/or its affiliates. All rights reserved. |

Profitability and Cost Management Cloud ServicePervasive and Focused Financial Analysis

Performance Ledger Applications

� Complex Multi Step Computations

� Flexible Allocation & Custom Calcs

� Business User Managed Rules

� Comprehensive Audit Trail

Performance Ledger Applications

� Complex Multi Step Computations

� Flexible Allocation & Custom Calcs

� Business User Managed Rules

� Comprehensive Audit Trail

Application Management

� Best Practice Application Templates

� Dimension Upload / Update

� User Provisioning

� Data Security

Application Management

� Best Practice Application Templates

� Dimension Upload / Update

� User Provisioning

� Data Security

Multiple Dashboards

� Charts & Data Grids

� Key Performance Indicators

� Custom Time Aggregations

� Rank and Scoring

Multiple Dashboards

� Charts & Data Grids

� Key Performance Indicators

� Custom Time Aggregations

� Rank and Scoring

Population Performance Analysis

� Multi Dimensional Profit

� Rank and Order

� Allocation Rule Trace

� Custom Queries w/Drill to Smart View

Population Performance Analysis

� Multi Dimensional Profit

� Rank and Order

� Allocation Rule Trace

� Custom Queries w/Drill to Smart View

Custom Report Creation

� Strategic P & L Reports

� Cost Contribution Detail

Custom Report Creation

� Strategic P & L Reports

� Cost Contribution Detail

Three Pillars to PCMCS

40

HPCM for Rules Management Mobile Ready Embedded Analytics

PBCS Data & Automation Management

Copyright © 2016, Oracle and/or its affiliates. All rights reserved. |

HPCM and PCMCSSummary of Recent Releases and Roadmap

Near Term: PCMCSNear Term: PCMCS Future +1Future +1

• PCM Cloud Service• Data Forms• Rule Enhancements• Enhanced Rule and Balance Dims

• PCMCS Solutions• Oracle IT Costing and Transparency• Partner Industry Specific Accelerators

• PCM Cloud Service• Management Ledger Apps (a.k.a.

Performance Ledger)• Embedded Analytics

• Embedded Analytics • Population Performance Analysis• Multi Dimensional P&Ls• Cost Contribution Reporting• Cost and Profitability Statistics• KPI’s & Dashboards

• Complete Data, Security and Automation• Data Management• EPM Automate• Data Level Security

Recent: HPCM 11.1.2.4Recent: HPCM 11.1.2.4

• Ledger Allocations Support• Management Ledger Model Type• Mixed dimensional attribution• True business rules• Rule based allocation trace

• Financial Close Manager Integration• Coordinated Schedules and Templates• Click through to ML App functions

• Performance Enhancements• Detailed Apps Multi Source Rules• Management Ledger Allocation Rules

• Dimension and Data Management• Management Ledger Apps

• Data Load from File• Dimension Load from File• Template Export / Import

Oracle Confidential – Internal/Restricted/Highly Restricted 41

Closing and Q&A

42

Summary/Questions

FlexibilityBusiness Users can Run Multiple Versions to assess impact of business changes

Business Power User facing application – limited IT involvement in running the model

AccuracyProfitability Workflows are now an automated, repeatable processes

Meaningful cost drivers and methods for cost pools ensures greater acceptance of published results

SpeedBusiness Users Can answers questions that impact operational and pricing decisions quickly.

Reporting Analytical Platform supports speed of thought ad-hoc reporting as well as user guided analysis

TransparencyExcellent visibility throughout the allocation process.

Operational Managers now understand operational profitability and cost to serve via the analytical platform.

•

Summary –Typical Project Outcomes

43

Positioning Profitability Solutions Within Your Organization

We understand where it fits…. We know the questions to ask….

44

PBCS

PCMCS

ERP

FCCSEPRCS

DRM

HCM

CRM

SCM

Does your company understand the true costs of its products or services?

re costing models transparent enough? Can you easily trace back the

assigned costs to the activities and line item expenses that drive them?

Are costing models transparent enough? Can you easily trace back the

assigned costs to the activities and line item expenses that drive them?

Do your costing methods operate at the right level of detail?

Are you satisfied that you are allocating shared services (e.g. IT/HR) accurately?

Are people spending too much time maintaining our costing models and other elements of our costing system?

Can people in your company quickly test how changes to commodity, input costs, lower or higher volumes will affect our profitability?

Are you getting answers from our costing systems fast enough to be actionable? Would reducing this process time improve our competitiveness or profitability?

Is all of the data that you need to understand true costs available in a single ERP system? If not, what are the initial and ongoing costs of integrating that data into your ERP system?

Q&A

45

6 Conference Sessions. 3 Lunches. 1 Happy Hour! Join Us.

− LUNCH N LEARNS @ the Thirsty Bear, 11:45-1:00 pm

− Mon: Cloud Showcase Featuring Universal Health Services and Brookdale Hospital

− Tues: Mastercard Worldwide Drives Performance Using Oracle HPCM

− Wed: Terumo Medical: Integrated Business Analytics at its Best!

− Register for Lunches or Tuesday night Happy Hour @Southside Spirit House @[email protected].

− RANZAL KIOSK, Moscone West, 3rd Floor

We're giving away Apple watches and TVs, wireless headphones, Bluetooth speakers, and much more!

Receive an entry every time we see you - sessions, lunches, happy hour, and at our EPM kiosk #10

− CONFERENCE SESSIONS− Universal Health Services Presents:

Monday, 9/19, 1:45pm - 2:30pm, Moscone West - 3018Oracle Enterprise Performance Management on Premise and in the Cloud: Taking a Hybrid Approach

− Mastercard Presents:Monday, 9/19, 3:00pm - 3:45pm, Moscone West - 3020Customers Present - Profitability and Cost Management

− Ranzal Presents:Wednesday, 9/21, 11:00am, Moscone West - 3rd FloorUnderstanding Cloud Strategies: On Premise, Cloud, and the Hybrid Approach

− TransRE Presents:Thursday, 9/22, 9:30am - 10:15am, Moscone West - 3020Introduction and Update: Oracle Hyperion Financial Close Suite

− Brookdale Hospital Presents:Thursday, 9/22, 1:15pm - 2:00pm, Moscone West - 3018Brookdale Hospital's Journey to the Cloud

− PPG Industries & Trinity Health Presents:Thursday, 9/22, 1:15pm - 2:00pm, Moscone West - 3024Customers Present - PPG Industries Simplifies with DRM

46

MasterCard Worldwide Drives Performance Using Oracle HPCM

Data & Analytics