Business Analytics Solutions Provider Using Oracle EPM, BI, and Big Data Technologies Oracle EPM Day Boston Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM Mike Killeen, Oracle Ace, Sr. Vice President, Technology Jan 14, 2016
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Oracle EPM Day Boston - Improving Performance with Enhanced Insight into Profitability and Costs using Oracle Hyperion Profitability and Cost Management
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Business Analytics Solutions Provider Using Oracle EPM, BI, and Big Data Technologies
Oracle EPM Day Boston
Improve Performance with Enhanced Insight into Profitability and Costs Utilizing HPCM
Mike Killeen, Oracle Ace, Sr. Vice President, Technology
Jan 14, 2016
Agenda
IntroductionsThe Need for Profitability ManagementProfitability and Cost Management Solution OverviewProfitability Management Case StudyClosing and Q&A
2
Edgewater Ranzal Overview
3
Oracle Platinum Consulting Partner - EPM, BI & Big Data Focus190+ Full time EPM/BI Billable Consultants US, Canada and the United Kingdom
Experience & SuccessFounded in 19961,700+ Oracle EPM & BI successful projects
Depth & Breadth of Service OfferingsFull EPM, BI & Big Data Platform Product DeliveryVisioning & Roadmaps, Full Life Cycle Implementations, Tech Review & Assessments, Staff Augmentation
EPM, BI & Big Data Solution ExpertsOracle ACEs Across EPM, BI & Big Data PlatformsCustomer Advisory Boards, Beta Testing, Certification Exam Development
Client is a global consulting leader in talent, health, retirement and investments; helps clients around the world advance the health, wealth and performance of their most vital asset – their people.Over 20,000 employees based in more than 40 countries.Global team of professional services companies offering clients advice and solutions in the areas of risk, strategy and human capital.
Project CharterDelivery of an Enhanced Client Profitability Solution to Support US Outsourcing BusinessSolution would replace a tactical Excel Model that wasn’t timely or accurate enough to support business decisions such as adding/redeploying employees and adding/losing clients.Solution needed to be Business User Enabled and meet corporate standards
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Client Outsourcing Business Challenges
Outsourcing business model is different than traditional consulting – longer contracts & volume based cost drivers.
Bad contractual decisions can lead to recurring unprofitable results
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Outsourcing Solution Requirements
Initial Client Profitability Delivery1. Establish Alternative View of Global Client P&L for Outsourcing 2. Built a Tactical Excel Solution to Validate Potential Cost Methods3. Allocations Moved Fully Allocated P&L views down to a Client and Service Level
Business Requirements – Mandated by Outsourcing Business1. Accuracy, Transparency, and Relevance in Cost Allocation Methods2. Timely, Accurate Data3. Flexibility in Costing Methodology (e.g. Cost Pools and Drivers)
Technical Requirements – Mandated by Finance Info Systems (FIS)1. Business User Enabled2. Automated Solution3. Fits into FIS Technology Strategy and Operating Model
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Service 1 Service 2 Service 3 Service 4 All Services
Cost of Delivery Call Center $0 $123,018 $0 $0 $123,018 Client Services $0 $131,360 $0 $0 $131,360 Comms-Fulfillment-Postage $0 $27,887 $0 $0 $27,887 OSI - Support Mgmt $0 $1,396 $0 $0 $1,396 Trust and Treasury $0 $49,539 $0 $0 $49,539 Implementation Amortization $0 $0 $0 $0 $0 Total Cost of Delivery $0 $333,199 $0 $0 $333,199
Function and Support Function $0 ($1,499) $0 $0 ($1,499) IT - Run the Business $0 $0 $0 $0 $0 IT - Change the Business $0 $0 $0 $0 $0 Support $0 $66,900 $0 $0 $66,900 Total Function and Support $0 $65,401 $0 $0 $65,401
Cost of Delivery Call Center $0 $123,018 $0 $0 $123,018 Client Services $0 $131,360 $0 $0 $131,360 Comms-Fulfillment-Postage $0 $27,887 $0 $0 $27,887 OSI - Support Mgmt $0 $1,396 $0 $0 $1,396 Trust and Treasury $0 $49,539 $0 $0 $49,539 Implementation Amortization $0 $0 $0 $0 $0 Total Cost of Delivery $0 $333,199 $0 $0 $333,199
Function and Support Function $0 ($1,499) $0 $0 ($1,499) IT - Run the Business $0 $0 $0 $0 $0 IT - Change the Business $0 $0 $0 $0 $0 Support $0 $66,900 $0 $0 $66,900 Total Function and Support $0 $65,401 $0 $0 $65,401
Client Profitability Analysis – Real OutcomesTimely , Accurate Data for Contract Renewal & New Business Pricing Identify Non Standard Clients to Support Contractual FeesContractually change client behavior and share in cost savings
Cost to Serve Analysis – Real OutcomesOperations Managers Understand Cost Drivers of BusinessEmployee Utilization supports Hiring and Organization DecisionsIdentification of Six Sigma Process Improvement Opportunities
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Business Outcomes: 6 Months Later
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Client Case Study
Implementation Details
Rapid Prototypes Delivered First
Prototypes used for Validations
Implementation Approach
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Parallel, Iterative Development
Utilize EPM Shared Dimensions
AttributionPlanning
HPCMCost Allocations
Budget Planning Application
Oracle Hyperion Planning
Hyperion Profitability & Cost Management
Microsoft Excel
Allocation Control
Set POV Variables
Load Costs
Load Driver Metrics
AdjustData
Load Pools
Update Allocation
Rules
Run Allocs
Validate
Publish Results
Metrics Mart
Global ClientProfitabilityBI Reporting
mIdeas
Time Entry
LaborRates
Operational Stats
LoaderFiles
Client Profitability Solution Architecture
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Client HPCM Model Requirements
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AccountSegment DataType
Stage 1 - Finance
Stage 2 – Line Item
Stage 3 - Intra Process
Stage 3 - Process
Stage 4 - Service
HPCM allocates Costs & Revenue Pools through one or more stages in a top down capacity
Stage - Step in the allocation process that has similar pool characteristics
Separate stages enable traceability.
Cost PoolSegment Process
Cost PoolSegment Process
ClientService
Cost PoolSegment Line Item
HPCM Model Architecture
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Source StageProcess
Target StageService
Segment
Cost Pool
Process
Service
ClientDriver
Driver Selections – Defines what Driver Definitions to use against the Source stage, typically the dimension identified as the driver definition.
Assignment Rules Definitions– Defines the member combination in the target dimension for the assignment.
Assignments– Defines the source dimension combination and the target Assignment Rule
Driver Definitions – Create an allocation formula/methodology that references a loaded metric within the model.
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2
3
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2 3
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HPCM Model Elements
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HPCM Driver Definitions and Selections
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• Easily add & assign new drivers with preconfigured formula types
• Create compound drivers
HPCM Model Validation – Stage Balancing Report & Excel Export
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Trace Allocation
Allocation
SourceEden Corporation
AA Football
Madrid Hospital
Jackson Bikes
HPCM Model Analysis – Cost To Serve Trace Allocations
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Trace Allocation
Allocation
Source
HPCM Model Analysis – Client Profitability Trace
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FlexibilityBusiness Users can Run Multiple Versions to assess impact of business changesBusiness Power User facing application – limited IT involvement in running the model
AccuracyProfitability Workflows are now an automated, repeatable processesMeaningful 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 client profitability and cost to serve via the analytical platform.
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Summary - Project Outcomes
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Closing and Q&A
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Does your company understand the true costs of its products or services?
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?
Self-Evaluation Questions
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Closing and Q&A
Edgewater Ranzal Contact Info:
108 Corporate Park Drive, Suite 105, White Plains, NY, USA 10604US: +1-914-253-6600 E-mail: [email protected]