JC Penney's Finance Transformation Strategy Enabled with Oracle … · JC Penney's Finance...

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JC Penney's Finance Transformation Strategy Enabled with Oracle EPM & the Cloud Ganesh Variar, JC Penney Ravi Maganti, JC Penney Zoher Neemuchwala, Oracle

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© 2016 JCPenney. All rights reserved. Proprietary and Confidential.

Agenda

• Company Overview & Strategy • Need for Financial Transformation • Finance Roadmap • Roadmap Execution to Date • Accomplishments and Business Benefits • Next Steps • Q & A

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Company Overview & Strategy Leading National Retailer • JCPenney is an established national multi-channel retailer with a

strong resilient brand, loyal customer base and growing momentum

• Founded more than a century ago by James Cash Penney, JCPenney has a long heritage as a leading U.S. department store brand

• Broad geographic footprint of 1,000+ stores in 49 states and Puerto Rico provides easy access to consumers

Enterprise Sales

Stores jcpenney.com Services/Other

FY 2015 Actual: $12.6bn

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Company Overview & Strategy

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Need for Financial Transformation

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Pain Points – Finance

Processes are optimized for functional silos rather than end-to-end business process

Many custom automations have been developed to manage complexities rather than simplifying / standardizing the processes

Most reporting is done in excel with many different versions of the data and no single source view

Staff spend more time finding data and managing spreadsheets than analyzing the business.

Variance analysis difficult due to lack of drill down capability to details

Limited support for scenario planning and ‘what-if” analysis. Planning drivers are dispersed in spreadsheets or other applications

and unable to analyze driver sensitivity.

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High-Level Business Value Analysis

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Capability Near-Term (<12 Months) Mid-Term (1-2 years) Long-Term (3-5 years)

Record-to-Report

Financial Planning & Analysis

Project Accounting

Use existing capabilities Requires new capabilities People, Process

Improve consolidated reporting with EBS multi-ledger and cross-validation rules.

Consolidate international finance into a single corporate system of record (EBS).

Deploy Hyperion Financial Management to streamline /simplify Close process and improve consolidated reporting as planned.

Configure Concurrent Manager to take advantage of Exadata processing power.

Deploy Hyperion Planning & Budgeting as planned on Exalytics. Leverage Hyperion platform to extend

planning capabilities: • Capital Planning, • Workforce Planning, • Profitability Planning, • Strategic Planning. Train FP&A staff in Hyperion Planning

Suite.

Implement Rolling Forecast.

Standardize Project Accounting for all types of projects. Evaluate Project Planning to

improve project budgeting and cash flow forecasting. Deploy Project Analytics to provide

faster, more detailed tracking of project costs and commitments.

Deploy Project Management to improve project accountability among project managers.

Finance Roadmap

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Finance Roadmap

Capability Near-Term (<12 Months) Mid-Term (1-2 years) Long-Term (3-5 years)

Cash Management

Master Data Management

Governance, Risk & Compliance

Use existing capabilities Requires new capabilities People, Process

Deploy Oracle Site Hub for location master data and retire FOCUS.

Establish Data Owners and centralized Data Governance Process.

Standardize Data Quality and Data Synchronization across systems.

Deploy GRC Suite to improve internal controls: • Access Controls • Configuration Controls • GRC Intelligence

Deploy GRC Suite to improve internal controls: • Preventative Controls • Transactional Controls

Deploy GRC Suite to improve internal controls: • Preventative Application

Configuration Controls

Improve cash forecast accuracy by: • Deploying Cash Management to report

cash flow within available within EBS • Leverage Hyperion Planning to

consolidate and forecast cash from all data sources.

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Finance Transformation Foundation EBS R12 Financials (2013): General Ledger Oracle Accounts Payable Projects Oracle Purchasing and iProcurement(NFR* only) Fixed Assets Accounts Receivable

Implemented GL in Oracle and integrate, bringing Oracle AP, PA, and FA apps to the latest supported release

Consolidating core accounting apps on a single integrated Oracle instance Establish an accounting model that will provide clear and simplified internal, external, and statutory

reporting: Improved and governed chart of accounts structure Cleansed accounting transactions

Reporting Enable R12 reporting using Oracle standard tools and by leverage the enterprise reporting

framework (OBIEE) Consolidate existing reporting tools

*Not For Resale

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EBS Projects – In Progress

Sourcing: A fully integrated RFI/ RFQ capabilities, Auto

Scoring & Weighting to understand TCO, Award Optimizer, Online collaboration using iSupplier

Services: Ability to procure and manage complex high

dollar Contracts like Fixed Price, Time and Material, Milestone Deliverables etc.

Introduce New payment types like Milestone, Payment Schedules, Contract Financing. work confirmations approvals prior to Payment

PM/OTL: Establish Common Framework for Project

Management, Monitoring, and Reporting for by implementing OTL, PM and Project Portfolio Management

Integrate the above new modules with existing JCP Oracle Project Costing footprint

Enable budgetary controls to manage spend & commitment

Merch-Match Migrate functionality from legacy

applications • MDSE, Invoice match,

Payments, Pcard, Freight Payments, Customer refunds, etc.

Move off the legacy ADW for reporting and migrate to OBIEE Financial Analytics

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EPM Vision

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Hyperion - Corporate Planning (2015)

Forward looking architecture… laying a solid foundation: 2 separate Plan types: Corp FP&A | Cash Flow & Balance Sheet Accommodating for differences while improving responsiveness and performance:

• Corporate FP&A Planning is best performed at a summary level • Variance Analytics is best with the lowest level of supporting data • Cash Flow & Balance Sheet naturally separated due to structure

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Hyperion Projects (2016)

Integration with Hyperion environment Simply External Reporting COA Alignment Drill into EBS details from HFM Improved Collaboration Calendar management to drive tighter close timing Enhanced audit logs Shorten monthly close process

Corporate Consolidations - HFM

Store Profit Planning Store level Expenses and Payroll Store P&L’s Increased driver based planning Detailed Store, Region, Market Analytics Integration with Consolidated FP&A planning Enable streamlined collaboration with related areas

(.com, Treasury, etc…) Enhanced Reporting and potential drill-down capability Expand attribute based analytics

Home Office Admin Expense Planning

Expenses and Workforce Greater level of detail for Analytics Systematic integration with FP&A – Consolidated P&L Enhanced Cost Center reporting Expedited collaboration between key associate

areas Reduce reconciling adjustments

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Hyperion Projects (2016) Gross Profit Adjustment - HPCM

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Hyperion Installation Architecture

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Current Oracle Footprint at JC Penney

Business Area Portfolio

Marketing Oracle Marketing Cloud -Responsys, Oracle Data Cloud - Datalogix

Financial Management E-Business Suite, Hyperion Planning Suite

Merchandising & Retail Operations

Oracle Retail

Omni-Channel Customer Experience

ATG/Endeca, Coherence

Human Capital Mgmt PeopleSoft in the Cloud

Source to Settle E-Business Suite

Database & Middleware Oracle DB, WLS, ESB

Infrastructure & Mgmt Engineered Systems, OEM

A Business-Centric Approach to Cloud Marketing system deployment in the cloud enabled

Rapid Implementation Reduced IT overhead Leverage Cloud innovation

Data-driven Marketing (Datalogix) for Data-as-a-Service Audience targeting Grow as needed

HCM deployment in Oracle Managed Cloud Systems consolidation Facilitate system upgrade Enable enterprise visibility & analytics (future)

Infrastructure on Engineered Systems (On-prem) Consolidation, performance & management Private Cloud deployment & provisioning (future)

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Team Structure

JCP | IT Group Manager

Chief Architect

Hyperion SME

ETL Lead

Project Manager

Functional Lead

Alvarez & Marsal Engagement / Delivery Manager

Business Analyst / FP&A SME

Tech Leads / Hyperion Architects

Blended team

Store Planning FP&A

Stores Finance

Stores Operations

Stores Leadership

JCP | IT Partners Finance Systems

Enterprise Data Architecture

Testing Center

TCoE (Testing Center)

Store Support

Sys. Eng. | Networking

Security

HR Systems

Inventory Systems

Merchandising Systems

Consolidation Chief Accounting Officer

Controllers

Tata Consulting Services Project Manager

Onsite Tech Leads

Offshore Developers

Admin Planning FP&A

Finance Partners from each Portfolio (Stores, Supply Chain, IT, Marketing, etc.

Cost Allocation P&A

Finance Controllers

Merchandising

Logistics

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Accomplishments and Business Benefits (2015-2016)

Single EPM Platform on Hyperion

Corporate FP&A Planning – 2015

Financial Consolidations – 2016

Profitability & Cost Management - 2016

Store Profit Planning – 2016

Home Office Admin – 2016

A fully integrated Enterprise wide Hyperion Consolidation, Cost Allocation and Financial Planning & Reporting solution to support our business needs and significantly improve efficiencies, while transforming our Enterprise Financial processes from end to end.

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Future Roadmap

• By Store; ALL Businesses • Enables Company wide POV Daily Flash Sales

• Store Op's Planning - Enhancement • Store Level Labor Modeling; Role Based Store Planning - Payroll

• Efficiency of Operations | Reconciliations • Enhances HFM and Close efficiency

Account Reconciliation (HFM - ARM)

• Driver Based Dot.Com Planning • Break Back of Store Expense Dot.Com Planning

• Standardization of Contracts • Systemic Calculations expands visibility Royalty Planning

• Daily Cash Availability • Daily Tender | Credit Card Daily Cash Planning

• Strategic Finance • Strategic Planning - 3 | 5 | 20 Yr. Long Range Planning

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Q & A

JC Penney's Finance Transformation Strategy Enabled with Oracle … · JC Penney's Finance...

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