50_118-898

EPM Roadmap Update

Albert Kim

EPM Sales Representative

Enterprise Performance

Management is a Discipline

that Enables Management to:

Link strategies to plans and execution,

Monitor financial and operational results against goals, and applying analytics to

Drive enterprise-wide performance improvement.

Copyright 2010, Oracle and/or its affiliates. All rights reserved. 3

Market Pressures Demand Effective

Performance Management

Todays Reality: Management

Processes Are Fragmented

Lack of business alignment

Low predictability in performance

Inconsistency in business

decisions

ECONOMIC VALUE ADDED

(EVA)

ANALYZE

PERFORMANCE

GOAL

SETTING

SCORECARDS FINANCIAL

REPORTING

FINANCIAL

MODELING

VARIANCE

ANALYSIS

ROLLING

FORECAST

OPERATIONAL

PLANNING

MONITOR

RESULTS


$

Management Excellence:

The Next Competitive Edge

Time

Competitive

Advantage

OPERATIONAL EXCELLENCE

MANAGEMENT EXCELLENCE

Cost Lean and Mean Quality Six Sigma, TQM Speed Real-time, JIT

Smart Deep Insight Agile Decisive Action Aligned Across the Enterprise

Oracles Process Framework for Achieving Management Excellence

Rationalize your management systems

Integrate with operational systems

Share insight across the enterprise

Copyright 2008, Oracle and / or its affiliates. All rights reserved. - Internal Use Only

Stakeholder Environment

Gain to Sustain ensures that the business gains all

the necessary contributions from its stakeholders to

drive business performance, while meeting the

required stakeholder expectations.

Mitigate Risk: Increased pressure on regulatory reporting

Cost Control: Tighten grip on outsourced activities, share cost

pressure with partners and suppliers

Build Trust: Be transparent to regain access to capital, and

improve customer loyalty

Customer Successes

Made population, economy, and environment data available for online users

Minimized the need for support from the IT team

Ensured data quality

Deliver BI to 1M merchants about marketing performance

Ability to understand what ads are successful, and where to run them

Ensure customer satisfaction via reporting

Supported reporting solution with fewer than 10 IT staff

Received high customer service ratings in 14 categories

Unified system for financial and sustainability reports

Automated calculation of emissions

Critical data disclosed at the same time schedule


Market Model

Investigate to Invest is the management process

for identifying, evaluating and creating the most

attractive market opportunities that generate the

highest returns.

Mitigate Risk: Focus on most profitable products, customers

and markets

Cost Control: Benchmark performance against competitors

Build Trust: Provide guidance with confidence

Customer Successes

Increase the probability of project success

Advanced financial modeling of strategic projects

Model technical risk and cost uncertainty

3-month strategic planning cycle

5-year plan for earnings and share price

Simulations on store openings and closures

Accelerate assessment and integration of acquisitions

Test scenarios for their impact on performance

Set earnings guidance for Wall Street


Business Model

Design to Decide is the strategy formulation

management process for designing the business

infrastructure and partner network to deliver value to

customers in the most profitable way.

Mitigate Risk: Use scenario analysis to prepare for different

future realities

Cost Control: Use financial modeling to find cost saving

opportunities

Build Trust: Communicate your strategy clearly to all involved

Industry Specific Solution : Corporate Credit Management

Solution

Corporate Credit Solution

Value: Efficiency decreased Underwriting time by roughly 6 hours

per deal (from 8 to 2) Standardized

analysis all Credit Reports for Credit Committee are locked down reports in

application

Functional Use: Underwriting, account management / credit analysis

Customer Successes

Survive a Financial Crisis

Lost investment-grade credit rating,

credit rating back to investment

grade

$4 Billion debt restructuring

Simulate capital structure and cash

flow

3% accuracy in net income

projection


Business Planning

Plan to Act optimizes capital and resource

allocations across the organization in order to

effectively execute its strategy. This process involves

budgeting, planning and forecasting.

Mitigate Risk: Align all activities and resources with the short-

term crisis strategy

Cost Control: Use integrated planning principles to increase

operational grip

Build Trust: Use rolling forecasts to stick to reality (instead of

sticking to a static budget from before the crisis)

Industry Specific Planning : Financial Services Balance Sheet

Planning, Position Based Planning for PS, Project Planning

Customer Successes

6mo rolling forecast by retailer per item

Match purchasing with forecast

Top ratings from retailers

Close partnership with BestBuy

Centralized rolling forecast

2 days P&L reporting

Instant online access

Aligned with corporate goals

4.5 weeks for first budget

Reorg down to 24 hours

Detailed budget 700 accounts

Phase 2 budget to 60,000 people

Multidimensional analysis

Detailed competitive benchmark for 32 countries

Sales analysis down not only by model but by sales channel, fuel type, chassis type, etc.


Business Operations

Analyze to Adjust is the management process for

analyzing trends and deviations -- and their root

cause -- from an organizations goals in order to take corrective actions.

Mitigate Risk: Monitor operations closely to immediately spot

deviations

Cost Control: Use leading metrics to predict cost

consequences of operational decisions

Build Trust: Turn analysis into immediate action to make

necessary changes

Profitability Management : Multistage & Microcosting, ABC ,

ABM

Customer Successes

Cadbury France Improves Profitability Analysis for its Product and Promotions

Analyze more accurately promotion profitability, which is

a key element in Sales strategy

Better understand seasonality in demand for products

Consolidate product monitoring, post merger

Improved and faster analyses for strategic and operational decisionsdays to minutes

Improved vehicle delivery efficiencies on higher volume with small growth in staff

$1 million in savings thru automatic reporting and reconciliation of payments to carriers

Controlling Cost in Period of Rapid Growth

Detail level profitability planning & budgeting

Allocating % 0,1 margin to product, customer/contract type better


Business Results

Record to Report is the management process for

providing strategic, financial and operational

feedback to all stakeholders inside and outside the

organization, to understand how a business is

performing.

Mitigate Risk: Do not allow spreadsheets, multiple tools and

many versions of the truth

Cost Control: Introduce Flash Reporting for immediate

operational feedback, minimize cost of management processes

Build Trust: Introduce a Fast Close

Regulatory Compliance : XBRL Reporting, SII QMR reporting

Customer Successes

Manages multiple acquisitions per year

Financial consolidations on top of SAP

Monthly consolidation process down from 5 days to 2 or 3 days

Allowed users to match up results with plans, budgets, and forecasts for swift responses to market

Reduced monthly report time from one week to 30 minutes

Enabled automatic transfers from back-office accounting to analytic applications

Worlds leading aluminum producer

Global consolidation across 58 LOB, 5 days

Global forecasting, reporting for 1,000+ users

World-class fast close

Oracle Provides Key Capabilities Complete, Open & Integrated

EXTERNAL REPORTING

INTEGRATED BUSINESS PLANNING

PROFITABILITY & COST MANAGEMENT

SCORECARDING, MONITORING & ANALYSIS

FINANCIAL & MGMT REPORTING

OLAP, DATA WAREHOUSE, DATA MINING

DATA INTEGRATION, APPLICATION MANAGEMENT & MASTER DATA MANAGEMENT

STRATEGIC & PREDICTIVE MODELING

BI TOOLS & BI APPLICATIONS, REAL-TIME MONITORING

Market-leading Performance Management

Applications Suite

Strategic Planning

Set Strategic Objectives

Corporate Development

Treasury Strategies

Long-Term Planning

Cost & Profitability Management

Define Costing Methods

Perform Allocations

Report & Analyze

Define Cost Drivers

Financial Close Process

Cascade Targets

Allocate Resources

Forecasting Detailed Budgeting

Planning and Budgeting

Data Cleansing

Consolidate

Internal

Reporting &

Analysis

External

Reporting &

Analysis

Governance, Risk & Compliance

Audit & Certify Financial results

EPM Governance

Shared Master Data

Lifecycle Manager

Data synchronisation

Oracle EPM Connects Management

Processes


Common Integration & Analysis Data Quality and Consistent Dimensions

Common Reporting & Interaction

Strategy Management

Financial Close

Planning & Forecasting

Profitability Management

Oracle Fusion 1.0

Oracle Hyperion EPM Applications Roadmap - Some planned content highlights

Hyperion EPM 11.1.2.2

Hyperion Strategic Finance

Smart View Integration

Hyperion Planning

Project Planning module

Core Planning Features

Predictive Planning

Hyperion Financial Management

Configurable Dimensionality

Financial Close Analytics Dashboards

Financial Close

Account Reconciliations

EBS/Fusion Integration

Disclosure Management

Collaborative document authoring

Smart Rounding & Footing

Micro-costing in Profitability & Cost Mgmt.

Hyperion EPM 11.1.2.1

Upgrade from prior releases

iXBRL HMRC Income Tax Returns

PSFT & Financial Close Mgt. integration

Hyperion Planning 11.1.2

New Public Sector Budgeting module

Hyperion Planning

Configurable & data driven workflows

Conditional formatting

Smart View extensions

Oracle tech stack optimization

Available

March 2012

Whats New ? Whats Coming ?




Strategy Management

Financial Close



Copyright 2010, Oracle and / or its affiliates. All rights reserved. 24

Consolidate and Report Financial Results

Manage Financial Close from Subledgers to Filings

Ensure High Quality Report Submissions

Integrate with ERP Sources and Ensure Financial Data Quality

Key Capabilities Accelerate Reporting and Reduce Cost of Compliance

Critical Components to Implement Financial Close Best Practices

Financial Consolidation

Data Assurance Document

Management & Filing

Financial and Mgmt. Reporting

ERP: Oracle, SAP, Legacy, Other

Tax Filing

Financial Close Workflow

CFO Dashboard

Tax Calculations

Transactions Reporting

Governance, Risk & Compliance


Hyperion Financial Data

Quality Management

Hyperion Financial

Management Financial Reporting,

Essbase

Hyperion

Disclosure

Management

Hyperion Financial Close Manager

Oracle Financial Management Analytics (OFMA) *

New products Sustainability Starter Kit Reporting Solution for meeting Solvency II requirements

Data Security

Single Source of Truth for CFO

Seamless Integration

Hierarchy Drills

Enables

drilling

into details

Visibility based on security access rights in hfm.

Single Sign on and workspace

integration *

Oracle Financial Management Analytics Features Prebuilt Dashboard for Finance Execs

OBIEE HFM\FCM

Copyright 2011, Oracle and/or its affiliates. All rights reserved. Company Confidential Version for Internal Use Only 26

Financial Management Analytics Contents

Executive Gross profit by Region, Income by Region, Net Cash Flow, P & L by products

Process Management

PM Metrics, PM Trend Analysis, PM Overall\Entity Status

Performance Indicators

BS Ratios YoY comparison table, BS Ratios components, BS Ratios Trend

Analysis

Profit and Loss

Summary Income Statement, Variance Analysis, Trend Profit and Loss

Gross Profit

Variance Analysis, Gross Profit by Product, Trend Gross Profit

Balance Sheet

Consolidating BS, BS metrics, Variance Analysis, Trend BS

Cash Flow

Cash Flow Summary, Consolidating Cash Flow, Variance Analysis

Currency Analysis

Variance Analysis using constant rate.

Financial Close Schedule Summary

Schedule Summary, Schedule Graph, Schedule Milestones\Roadblocks


FCM - Account Reconciliation Manager

Reconciliations are a major

bottleneck in the close

process

Ensuring completion and enabling

audits are key requirements

New in 11.1.2.2: Account Reconciliation Manager Designed to manage global

reconciliation processes: Balance Sheet, Consolidation, Local GAAP

Streamlined, workflow-driven and auditable processes

Delivered as part of Oracle Hyperion Financial Close Management

March 2012

Account Reconciliation Manager Overview Typical workflow

Load Balances

Auto Reconciliation

Email Notifications

Preparation

Review

Late Notices

Monitoring

ARM will be the killer app for

FCM

Functionality in V1 will be

competitive in the market vis-

-vis specialist vendors

Working through validation

sessions with field and

customers

Future Direction Integrated Reporting

Copyright 2010, Oracle and/or its affiliates. All rights reserved.

Oracle Hyperion

Financial Management

Integrated Financial/Sustainability Reporting

NON-FINANCIAL

Sustainability Reporting

Application

+

Economic

Social

Environment

Capture

Report

Store

FINANCIAL

P&L Cash

Flow

Balance

sheet

ROCE

EBITA

P/E

etc.

Reporting & Analysis Tools

Report/Model/ Analyze/Benchmark

Capabilities

Collects and Consolidates Data from Multiple Systems and Units

Ensures the Accuracy and Auditability of Sustainability Reports

Aligns Sustainability Reporting with Financial Reporting

Key Features

GRI-based Chart of Accounts and Task Lists

Pre-Built Web Data Entry Forms, Direct Data Integration

Pre-Built Conversion Calculation Rules

Full audit trail, process management and security

Advantages

Single system for financial and non-financial reporting

Leverage existing investments in Hyperion Financial Management

Deploy quickly with pre-built application

Oracle Hyperion Financial Management Sustainability Reporting Starter Kit

Sustainability Reporting Task List

Tasklist displays different GRI Performance Indicators

GRI Performance Indicators are divided into separate folders with subfolders

Web Data Entry Forms

Conversions

Dashboard (OBIEE) Environmental Information

Sustainability Reporting Successes with

Hyperion Financial Management

Telenor Norway

Stora Enso - Finland

Corporate Express - Netherlands

Dong Energy Denmark

Intesa SanPaolo Italy

Others

Three Pillars of Solvency II

SII Technology Platform Actuarial/Risk Calculation Engines

Req

uire

me

nts

S

olu

tion

K

ey Is

su

es

Minimum Capital Requirement (MCR) Solvency Capital Requirement (SCR) Technical provisions Internal model or standard formula Regulatory approval

Risk management processes Own Risk & Solvency Assessment (ORSA)

Use Test Implementation Model and Risk Management documentation

Market Disclosure - SCFR Transparency

QRT/SCFR/RSR

Understanding Risk dependencies Capital aggregation & allocation Control & repeatability Quality of risk data

Consistent risk management Security, audit, control processes Embedding risk culture in business Information readily available to business e.g. solvency monitoring,

capital allocation

Robust mechanisms and processes for external reporting

Providing consistent information on a timely basis

Enterprise deployment Audit, security & control technology Computing power Data Management Collaboration/integration

Real-time Reporting Analytics Dashboards

Three Pillar Requirements

Pillar 1 Capital

Adequacy

Pillar 2

Risk Management

Pillar 3

Transparency

Risk Engines

Market Insurance Credit Operational

Compute Grid

QMR

Audit, Security & Control

General Ledger

Financial Systems

Proposed Technology Infrastructure for Solvency II

Reporting/Analytics Engine

SII Management Reporting

IFRS

Continuous Solvency Monitoring

Dashboards

What-If & sensitivity analysis

Performance Management

Policy Systems

Claims

Investment Systems

Source Data

Compute Grid

ALM

Standard

Model

ESG

Product

Development

ET

L &

Co

mm

on

Sta

gin

g A

rea

Financial Consolidatio

n

Product Profitability

Policy Data

Operational Risk

Credit

Risk

Insurance Risk

Market

Risk

Cash Flows & Valuation

Replicating Portfolios

Strategic Financial

Planning

Budgeting

Actuarial & Risk Engines

Pricing

Economic Capital

Aggregation

Financial

Consolidation

Meta Data Management, Reconsolidation Framework & Process Flow Automation

Data Warehouse

Operational Data

Actuarial/Financial

Data

Reports/Analytics

Source: IDC Financial Insights

Asset Liability Modelling

Standard

Model

General Ledger

Financial Systems

Policy Systems

Claims

Investment Systems

Source Data

Data

ET

L

ESG

Policy

Data

Operational Risk

Credit

Risk

Insurance Risk

Market

Risk

Projection Engine

inancial Consolida

tion

Replicating Portfolios

Economic Capital

Aggregation

Risk Aggregator

SII Data Warehouse

Reporting Process Flow

Projection Data

Results

Data

Step 1

Policy Data

Analysis

Step 2

Asset Data

Analysis

Step 3

Assumption Data

ESG (1000)

Mortality Tables

Yield Tables

Step 5

Economic Capital

Diversification Matrices

Reports

MCR

SCR

MCEV

IFRS

Results

Data

Analysis

Step 6

Reports

SCR/MCEV/MCR/QIS5

Analysis

Step 4

Un-weighted Cash Flows

Technical Provisions

Analysis

Expected Solution Roadmap

1. Compliance Phase

A. Quantitative Management Reporting (QMR) 1.0.1

November 2011

HFM application

QIS5 reporting requirements

Precursor for QRT

B. QMR 2.0

Early 2012 *(expected date but no commitment)

HFM Application

Full support for QRT reporting requirements

Includes XBRL, Process best practices, etc

C. QMR 2.1

2012

HFM Application

Full Support for SFCR and RSR reporting

2. Consolidation Phase

A. QMR + OFSAA

QRT Reporting +

Data Warehouse supporting actuarial, risk and financial data

What is QMR for SII? (Quantitative Management Reporting)

45

Out of the Box solution for SII reporting QRTs, SFCR, RSR Based on the existing Oracle financial consolidation engine

Hyperion Financial Management (HFM)

HFM comprises: Powerful Financial Consolidation Engine with process flow controls

(HFM)

Data Quality and Integration Tool (FDQM) Reporting (Disclosure Management)

QMR is a dedicated application that operates with the HFM environment to specifically provide for QRT, SFCR,RSR functionality.

The QMR application will be maintained and developed by Oracle to keep pace with EIOPA regulations

Process Flow of Oracle QMR Solution

46

Reporting

Financial

Actuarial

Asset

Financial

Data

Sources SII

Cycles

Process Management

Rules Engine

Validations

Journals

Audit Tracking

Inter-company Processing

HFM

QRT specific calculations

QRT Data forms

QRT Report structures

Dimensionality to support QRTS

SFCR/RSR Templates

QMR

User Driven ETL

Data Load Repository

Audit, Security & Control

Drill-through

FDQM

Source Mappings Target

Processing

Manual Entry

ETL

Report Generation (pdf/html/MS Office)

Adjustments

Explanations

XBRL Tagging

Qualitative Text

Dashboards

OB

IEE

, S

ma

rt V

iew

& F

ina

ncia

l R

ep

ort

s

Dis

clo

su

re M

an

ag

em

en

t &

FC

M

QR

T

SF

CR

R

SR

other

Oracle EPM Connects Management Processes




Strategic Planning

Financial Close



Enterprise Planning

Products


Capital Assets Planning

Workforce Planning

Long-Term Financial Planning

Financial Detail

Operational Detail

Predictive Modeling & Simulation

Operational Revenue & Cost

Modeling

Planning, Budgeting & Forecasting

Functional Plans

Project Planning

Marketing Planning

Strategic Finance

OSSM

Workforce

Planning

Capital

Expense

Planning

Hyperion Planning

Crystal Ball / Predictive Planning*

Project Financial Planning*

Verticalized Planning Apps Balance Sheet Planning Public Sector Planning & Budgeting





Strategy Management

Financial Close



Future Release 11.1.2.2





Strategy Management

Financial Close



Hyperion Project Planning Application Project Planning Lifecycle - EPM Vision

2011 Oracle Corporation Proprietary and Confidential

Rank & Fund

Plan & Propose

Approve & Budget

Monitor & Report

Forecast & Simulate

Revise & Approve

Establish Projects

Assign Budgets

Procure & Bill

Accounting & Commits

WBS & Resource

Schedule & Assign

1 2 3

4 5

6

Execute & Measure

Update & Revise

7 9

8

11 12

10

13

14

Hyperion Suite BI Apps ERP Projects ERP GL Project Tools


Hyperion Enterprise Planning Suite R11.1.2.2 Project Planning - Key Cross-Functional Capabilities

2011 Oracle Corporation Proprietary and Confidential

Hyperion Projects Planning

Contract, Capital & Indirect Projects Resource Level Expense And Revenue


Overheads/Burden Cost Forecasts Driver Based Revenue And Expense


Intercompany Projects and Reconciliation

Impact Analysis Funding Requests & Project Approval

Flow

ERP Projects / GL

Project Initialization Financial Work Structure (FWS) for

Budgets / Actual

Project level Budgeting for FWS Cost management, procurement, billing,

accounting

Earned Value calculations at various FWS levels

Control of Service Spends/Payment Verification

Project Analytics

Project Funding and Budget Analytics Product Cost Analytics Project Revenue Analytics Project Billing Analytics Project Profitability Analytics . . .

Project Portfolio Management

Create execution Work Breakdown Structure (WBS)

Assign / schedule resources Track progress of project tasks within

each WBS

Optimize Scheduling and Capacity Planning

Predictive Planning

Functional details

Statistical prediction scenarios can be built into Planning

Enables sanity check during forecast cycles

Ability to compare accuracy of forecasts vs. statistical predictions

Uses Crystal Balls Predictor to analyze historical data and projects

trends and patterns into the future

Users review forecasted values, override if needed, then submit back to

Planning

Automatically forecast best and worst case scenarios in addition to base

case






Strategy Management

Financial Close



HPCM The Opportunities

HPCM

Opportunity

Strategic

Value

Industry Value

Feature

Value


HPCM

Opportunity

Strategic

Value

Industry Top of Mind Business Drivers

Every industry

- Cost only, or

Cost & Revenue

- For Profit or Not

for Profit

- Large or SME

Shared Services IT/HR/Finance/Marketing/Faciliti

es

Driver-Based Planning

Operational Efficiency

Process Change/Re-engineering

Benchmarking

Capacity Utilization

Product Profitability

Customer/Customer Segment Profitability


HPCM

Opportunity

Industry

Value

Industry Top of Mind Business Drivers

Financial Services

Financial Svcs Insurance

Financial Svcs Invest. Mgmt

Sales Channel Costing, Service Channel Costing, Transaction-Type Costing

Policy/Plan Profitability, Claims Efficiency

Fund Profitability, Investment Desk Costing

CPG Strategic Sourcing Decisions, SKU Decisions, Supply Chain Costing

Distribution and Logistics

Transportation

Cost-to-Serve

Cost-to-Deliver (Pay Load), Route Profitability

Utilities

Regulatory Compliance

Price Rationalization

Communications Network Costing, Customer Profitability, Subscription services cost to serve

Healthcare Provider

Healthcare Payer

Treatment Services Costing, Medical Specialty Costing

Medical Loss Ratio, Medical Plan Profitability, Actuarial Pricing Rationalization

Retail Pricing Justification, SKU Rationalization, Margin Optimization

Manufacturing Supplier Profitability, Supply Chain Costing, Contract Negotiations, Job costing

Public Sector -

Government

Supplier Costing, Cost Recovery, Statutory and Regulatory Mgmt Accounting

Future Funding Justification, Job costing, Project Costing


HPCM

Opportunity

Industry

Value


The Challenges Your Customers Face

Almost every customer will have some sort of

costing/profitability solution in place now

Most of these solutions are homegrown

Common feature level challenges:

Accuracy & Effort

Visibility & Credibility

Control and Ownership of older Black Box solutions

Examination of these strategic, industry and

feature challenges leads to opportunities for Hyperion Profitability & Cost Management

HPCM

Opportunity

Feature

Value

Packaged Cost and Profitability functionality

Computes Cost/Profitability for Business Segments, and Products

Pre-Built Framework for profitability modeling:

Pre-built Measures dimension

Support for Multiple Cost Allocation methodologies

Pre-Built Validation reporting

Graphical Interactive Traceability Maps

Genealogy Reporting shows flow from any stage to any stage

A User-Driven application

Measures, Allocates and Assigns Cost and Revenues via User Defined Rules

Finance User-facing Administration

Provides Scenario Modeling for Decision Making

Tightly integrated with the full Hyperion EPM Suite

Shared Data and Metadata via EPMA

Shared Reporting Tools like Financial Reports & Web Analysis

Proven Technology Stack

Hyperion Profitability and Cost Management

Supports all Levels of Costing and Profitability Objectives

Cost, Revenue and Profitability Analytics

Cost and Profitability Reporting

Cost and Revenue Allocation

Calculations

Allocate Performance Improvement

Cost and Profitability Simulation

Analyze

Who are the most and least profitable customers?

Why are customers profitable or unprofitable?

What can we do to improve the situation?

What is a customers profitability?


2

HPCM current modeling style

Traditional profitability models manipulate ledger data

Cascade costs from back office to front office functions

Extends ledger data with additional business dimensions

Current Modeling Method and Model Type

Back Office

Mid Office

Front Office

Cost to Serve

Products

Business Intersection

Product / Region / Channel / Customer Segment

Dimension Intersections

Gaps in Traditional Methods

Dimension groupings mask unique cost behaviors

Location or item specific costs

Order handling

Customer specific behavior

Analysis options are pre-limited by summarizing data

Analysis dimensions are chosen once never change

Dimensionality of product or customer is sacrificed

New Detailed Profitability

Detailed Profitability focuses on business interactions

Takes ledger developed pools and rates current HPCM

Applies them to atomic level transactions/business interactions

New Modeling Method and Model Type

Back Office

Mid Office

Front Office

Cost to Serve

Products

Business Interactions / Transactions

Potentially millions of unique items

20+ Dimensions

Rows of Data


Model Type Comparison

Multi-Stage Models

Primary Use: Cost Development

Multi-Step allocations of dept to dept, dept to activity,

product etc.

May develop data to feed Detailed Profitability models

Contribution analysis focused

New Detailed Models

Primary Use: Apply Cost and Revenue to details

Single step allocation of pools or rates to cost & profit

objects

May use data from Multi-Step model or external data

Focused on detailed analysis

Driving profit is not just game theory

Activision Publishing develops, markets, sells and distributes interactive

software entertainment products. Understanding the business by region,

game title and down to retail/distribution customer is key to maximizing

margin and enabling the management to improve performance.

Before

Rapidly expanded performance

management, from 20 management

units and 500 products to over 150

management units and 1,500 products

Incentive plan goals were not were not

able to be aligned to profitability but

only focused on revenue

Increasing reporting and analysis

demands with exploded data volumes

overwhelmed the multiple

spreadsheets

Needed to model annual plan and

forecast scenarios as well as actuals

After

HPCM is the strategic solution to

focus the Field Sales organizations

on driving profit not just revenue,

its about changing the behavior of Sales

Enabled profitability analysis across

all regions, countries and products,

with detailed analysis and reporting

down to customer

Extends existing Oracle ERP, EPM

and BI investments; integrated with

Planning and provides actual

allocations for G/L


Evaluate Product Mix to Maximize

Profitability

Regional bank serving 19 Western and Midwestern

states and 4 million households. Over $60B in assets

with more than 10,000 employees.

Before

IT resources demand exceeded capacity for profitability reporting

Needed business users to drive profitability modeling

Lack of insight how shared costs impacted economics of the business

Challenge to optimize product mix that maximizes bank profitability

After

Minimal IT involvement

Easy integration into EPM system infrastructure

Ability to offer a basket of products by mixing and matching products

according to customer demographics

Benchmarking costs for developing and marketing new products

M&G Investments

Select Oracle EPM over Clarity Systems

COMPANY OVERVIEW

M&G are an investment-led business which is driven by

performance.

They look after investments for nearly 334,000 investors,

with over 178 billion under management invested in equities,

fixed income and property. Assets are managed on behalf of a

wide variety of investors across UK, Europe, Asia, the

Americas and South Africa.

Industry: Financial Services Funds Managed: 178B

CHALLENGES

M&G needed to replace a disconnected process and the many spreadsheets which had built up over the years with a

centralised planning system

M&G were using ALG Metify (now SAP) but this was proving too rigid for future requirements with only three possible

levels of allocation

SOLUTION Hyperion Planning, Hyperion Financial Data Quality Management, Hyperion Profitability & Cost

Management

Why Oracle?

M&G were impressed with the Oracle team and how fast they were

able to develop a working

application to cover their complex

income modelling requirements in

less than 1 week.

Superior functionality of Oracle Hyperion Planning

Advanced capability and great usability of HPCM which Clarity

would have tried to build in

Essbase

Oracles integrated EPM portfolio (Planning, HPCM & Essbase with

same reporting, consistent data

integration)

Internal Use Only


Controlling Cost in Period of Rapid Growth

Before

Need to understand Cost Drivers:

Cost transparency for regulatory reporting to support price

negotiations

Understand and manage costs within its business to increase profitability

Customers Existing Environment:

SAP BO Profitability, BOBJ BI

Hyperion Pillar, PSFT Financials

Sales Challenges:

Failed attempt to sell Hyperion Planning 18 months earlier

Customers predisposition to SAP

HPCM is a new product with few references

Proposed Solution

Convince customer that Oracles Hyperion EPM System can meet their Costing,

Management and Reporting requirements:

Position HPCM and Planning as two modules of an integrated EPM system vs. SAPs two product approach

Show how HPCM and Planning together can deliver cost analysis and build new scenarios

to support their planning and forecasting

process

Products sold:

HPCM, Planning, Workforce Planning, FDM

As the 4th largest Water Utility in UK, Scottish is a Regulated

Utility Serving 2.4 M households. It has annual revenue in

excess of $1.5B.

TSTT phones in to HPCM

COMPANY OVERVIEW

Telecommunications Services of Trinidad and Tobago (TSTT) offers

a complete range of telecommunications services to the people of

Trinidad and Tobago. Specifically these consist of landline, mobile,

data and broadband services.

In 2005 wireless licenses were granted to two new wireless

carriers, introducing deregulation and competition. Since these

competitors must lease core landline from TSTT, regulators need to

be able to verify that the prices TSTT charges their competitors is

fair based on their cost. CHALLENGES

Provide a mechanism to accurately allocate revenue, operating

expenses and cost of capital to TSTTs service offerings Provide traceability of these allocations back to the audited

financials

Provide a simple method to communicate the allocation

methodology to regulators.

SOLUTION HPCM and Essbase

Why HPCM?

Ease of maintenance Built-in traceability Simplified regulatory compliance

CUSTOMER PERSPECTIVE

Significant reduction in the amount of maintenance for allocation data that was

currently being done in Essbase

Internal Use Only

BlueCross of MA chooses HPCM

COMPANY OVERVIEW

Blue Cross Blue Shield of Massachusetts headquartered in Boston,

provides coverage to nearly 3 million members BCBSMA believes in

rewarding doctors and hospitals for delivering safe and effective care,

and in empowering patients to take more responsibility, become

educated health care consumers and become stronger partners with their

doctors. Blue Cross Blue Shield of Massachusetts is an independent

licensee of the Blue Cross Blue Shield Association.

CHALLENGES

Keeping pace with the changing Medicare reimbursement regulations Inability to quickly respond to specific reimbursement requests with

additional supporting documentation

OFA (Oracle Financial Analyzer) sunset Heavy dependence on IT for Reporting and Analysis

SOLUTION HPCM, Planning, FDM

Why HPCM?

Allocation Transparency ability to document reimbursement requests as a

by-product of the allocation process

Model validation - Confidence in the numbers generated by the model

Integration with Hyperion Planning and PSFT GL

Gain ability to predict profitability for their LOBs

One Solution, One vendor


Medicare reimbursements are the lifeblood of our organization. Being

able to accurately document the

reimbursement requests means that

we getting paid quickly and completely

for the claims we process - Kevin Lyter, Director, Medicare

Reimbursements

Internal Use Only

Correlating Administrative Cost to Pricing

2.8 Million Insured Medical Members

$13 Billion in premiums, 4000 employees

Blue Cross Blue Shield refines their Forward Rate Pricing

Before

New healthcare reform

legislation requires healthcare

Insurers to provide detailed

reporting on Medical Loss

Ratio.

Need to accommodate the

regulatory introduction of

Regional healthcare

exchanges and expansion of

Medicare and Medicaid

Cost of shared operational

centers (Claims Processing,

Utilization Review) not

mapped to pricing

After

Quantified medical loss ratios to

meet federal requirements using

traceability maps, significantly

reducing audit costs and time

Revised Medicare reimbursement

billing to recoup claims processing

cost which were previously

swallowed

Improved actuarial costs to refine

bids on future business

Decision making, benchmarking

vs. competition driven by

profitability analysis

EmblemHealth insures with HPCM

COMPANY OVERVIEW

EmblemHealth was formed as a result of the merger between HIP

HealthPlan of New York, and GHI Group Health Inc. It is now the largest health insurer based in New York, serving more than 3.4 million

geographically and culturally diverse members, with more than 92,000

participating providers in 150,000 locations throughout the tristate region. Groups and individuals can choose from a variety of PPO, EPO and HMO

programs as well as prescription drug, dental and vision plans. Plans offer a choice of networks, including access to over 106,000 quality doctors and other health care professionals and most of the leading hospitals across the tristate region.

CHALLENGES

Existing Excel-based allocation system was too rigid to meet their post-merger market expansion needs. It was also getting too expensive to maintain.

IT was not responsive enough to create extracts from their G/L system for data feeds.

Inability to easily link actuarial information with internal budgets to drive pricing programs.

Existing PSFT Budgeting and Planning solution wasnt meeting their needs, post-merger.

SOLUTION HPCM, Planning, FDM

Why HPCM?

No coding for defining and maintaining allocations

Users could develop and maintain the actuarial allocation system, without having to depend

upon IT.

Integration with Hyperion Planning and PSFT G/L

One integrated solution from one vendor


The finance team can now set up their own models , change the drivers, and

maintain the pricing models with IT

providing operational support. The

Finance and Actuarial organizations are

now in a position to manage and drive

their business - Chuck Lomicki Director, IT

Internal Use Only

76

Solvency II

Solvency II was initiated by the European Commission to fundamentally change the European insurance solvency framework when it is implemented in January

2013.

Solvency 2 will apply to all insurance and reinsurance firms with gross premium income exceeding EUR 5M or gross technical provisions in excess of EUR 25M

Solvency II evolved from the Basel II three pillar approach to Banking regulation. It is designed to produce a more consistent solvency standard by ensuring that

capital requirements are more aligned to the risks being accepted.

The new regulatory regime is designed to provide a principles-based supervisory framework for European insurers and reinsurers

Replaces 14 existing insurance directives The risk-based system will put an understanding of risk and capital at the heart of

insurers business decisions, basing the amount of capital an insurer is required to hold directly on the risks it is exposed to.

The intention is to ensure that insurance companies hold sufficient capital to withstand a loss so severe it would happen only once every 200 years. For

organisations to effectively quantify this level of capital, many will have to develop a

more accurate view of what their risks are, and how much capital should be held

against each of them.

Assu

mp

tio

n

Sets

Solution Architecture

Financial Reporting

Data Sources Policies

+ Claims

+ Market Data

+ Asset Data

HR +

ERP +

CRM

Financial Data Quality Management

Hyperion Financial

Management +

QMR Application

Financial Reporting

(QRT, SFCR, RSR)

+

(IFRS, Management Reporting)

Disclosure Mgmt XBRL

Web Interface EPM Workspace

MS Office EPM SmartView

OBIEE Alerts

+ KPIs

+ Dashboards

OFSAA Common Staging

Area Customer

+ Policy

+ Assets

+ Financial

+ Actuarial

OFSAA Common Results

Area

Financial Store

+ Risk Store

+

Actuarial Store

Actuarial

Financial Close Management Solvency II process mgmt / best practices

QMR Application within HFM

Pre-Built application that supports (both independently and in conjunction with Oracle S-II Repository) the generation of the QRT reporting requirements as

prescribed by the European Insurance regulators (EIOPA) for both for solo

and group reporting

Incorporates calculations for SCR/MCR and Diversification calculations

Our approach and release management will support future upgrades in the underlying platform (HFM) and future regulations e.g. QRTs/ SFCRs/RSRs.

QMR supports both Life, Non-life business and composite Insurers

Capability for the customisation of QRT templates (for local regulator requirements) and generation of user specific templates

QRT specific calculations

QRT Data forms

QRT Reports

Dimensionality to support

QRTS

SFCR/RSR Templates

QMR

HFM (Hyperion Financial Management)

Hyperion Financial Management Powerful Financial Consolidation Engine designed specifically for the Annual Reporting process

Calculation capabilities to support SCR, MCR and Diversification calculations

Inbuilt process flow to support the QRT process

Sophisticated Rules Engine to provide controls and validations (cross checks and validations on input data) both built-in and user defined

Consolidation support (currency translation, IC elimination and possibly equity elimination) for entity structures/product structures

Full Audit, Security and approval and sign off procedures from local sets to Corporate (divisions)

Embedded best practices to support multiuser multi-data source collaboration around a set of regulatory reports).

Process Management

Rules Engine

Validations

Journals

Audit Tracking

Inter-Company Processing

HFM

FDQM (Financial Data Quality Management)

Financial Data Quality Management - Integrated tool to enable data loading into the HFM/QMR environment

Automated ETL routines direct from source systems:

GLs/Financial Systems

Actuarial engines MoSes, Prophet, Igloo, ReMetrica etc

Asset Systems

Excel Spreadsheets

Flat files

RBDMS

SAP, PeopleSoft and EBS direct connectivity

Manual, Batch and scripted/scheduling options

Data loading procedures from HFM IFRS consolidation engine (to load Balance Sheet and Profit Loss information). IFRS information easily

loaded from non-HFM statutory consolidation engines as well

Full audit and control capabilities to ensure data integrity

Drill through back to source details

User Driven ETL

Data Load

Repository

Audit, Security &

Control

Drill-through

FDQM

Source Target Mappings

Reporting

Financial Reports & Smart ViewTM

Embedded self service reporting for standard QRTs and ad-hoc analysis Highly formatted reports available in pdf/html, can be scheduled, burst, or

run on demand

MS Office integration for query via Excel and with Word and PowerPoint Disclosure Management

Provides extensive capabilities based on Word for the addition of the

qualitative requirements of the QRT, SFCR and RSR reports

Embedded XBRL tagging support, taxonomy management and instance

document creation and validation

Financial Close Management Facilitate collaborative working on the Solvency II Calendar between risk and

finance teams via a unified task list with critical path visibility

Workflow Management & Monitoring

Dashboards for process trending analysis and process improvement

Oversight & Sign off

OBIEE* Dashboards and highly graphical analysis providing the ability to combine

Pillar III data with other sources (optional module)

81

Report Generation (pdf/html/MS Office)

Adjustments

Explanations

XBRL Tagging

Qualitative Text

Dashboards

OB

IEE

*, S

ma

rt V

iew

& F

ina

ncia

l R

ep

ort

s

Dis

clo

su

re M

an

ag

em

en

t &

FC

M

QR

T

SF

CR

R

SR

Benefits of QMR

HFM/QMR

5. More than just a reporting solution it provides essential capabilities for Pillar 2/3 SII controls:

Data Quality, Auditabilty, ETL Validations and Calculation capabilities Embedded process flows with inbuilt approvals and signs-off procedures Support for Internal and Standard Models

2. Fully supported and maintained by Oracle with a discounted bundled price for SII reporting

1. Out of the Box solution for QRT- Specially bundled package of HFM/QMR for SII reporting

3. Fully customisable to an insurers specific legal structures, regulatory environment and internal requirements

4. Relatively quick implementation process estimated 3-4 months to support SII reporting - can be quicker in a existing HFM client

QIS5 Financial Reporting & Consolidation Application

Oracle Exalytics- In Summary

Fastest R-OLAP, M-OLAP Business Intelligence

Fastest Financial and Operational Planning

Best Cost/Performance BI & EPM

What-if Analysis and Forecasting

16x better response times

More accurate use more detail, include more scope, evaluate wider operations More scale more users and higher volumes at busy periods Greater agility do daily instead of monthly

Enterprise Planning

Reduce planning cycle times with 5x better response time and 6x better throughput

Run more planning models with finer grained operational detail to improve accuracy

Extend beyond Finance to every LOB, with 10,000 Planning users on one appliance

Oracle Exalytics Business Intelligence Machine

In-Memory Analytics Software

Memory Optimized

Essbase

TimesTen for Exalytics

Adaptive In-Memory Tools

1 TB RAM

40 Processing Cores

High Speed Networking

In-Memory Analytics Hardware

Optimized Oracle Business Intelligence Foundation Suite

End-user Experience with Exalytics

Speed of Thought Interactive Analysis

Highly Interactive Analysis

Free Form Data Exploration

High Density Visualizations

View Auto Suggestions

Contextual Actions

All on Mobile

How Fast?

Early Customers

With Exalytics running in-memory, we are seeing an overall improvement of 38x to 70x responsiveness

compared to where are today!

Exalytics produced an average of 18x better dashboard responsiveness and in cases exceeded

100x in responsiveness compared with our production

system.

Exalytics demonstrated speed-of-thought interactivity that was so far only possible in desktop solutions we are ready to move from desktop BI to Exalytics as

soon as the product is out.

Immersive Mobile Experience

Exalytics user experience extended to iPad

All BI content instantly available to mobile users with zero extra development

Speed-of-thought analysis available anywhere

Fastest Time to Mobile Value. No Additional Development

Optimized Oracle BI

Foundation Suite

In-Memory

Analytics

Software

In-Memory

Analytics

Hardware

Current and Next Generation Analytic Applications Certified and Optimized for Exalytics

Financials

HR

Procure & Spend

Projects

Supply Chain

Order Management

Logistics

Sales

Marketing

Service

Contact Center

Price

Loyalty

Strategic Planning



Financial Services

Communications

Healthcare

Retail

Oracle Exalytics

Extreme Analytics

Visual Analysis with No Limits

Sense, analyze, plan and respond in real-time

for increased business agility

Hardware

Software

Solutions Services

First Engineered System for Analytics

Hardware and software engineered to work

together to provide lowest TCO and risk

Smarter Analytic Applications

Large portfolio of existing BI and EPM apps

improve business performance and decision

making

Oracle Exadata best machine for: Data warehousing

Database consolidation

Oracle Exalogic best machine for: Cloud computing

Application consolidation

Oracle Exalytics best machine for: Business intelligence

Speed-of-thought analysis

Financial and operational planning

The Exa* Story Evolves Engineered Systems for Increased Business Value

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