PowerPoint Presentation · 2019-09-12 · • 2016 Oracle Global Partner of the year –Cloud EPM &...
Transcript of PowerPoint Presentation · 2019-09-12 · • 2016 Oracle Global Partner of the year –Cloud EPM &...
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interRel Highlights and Company Overview
What is Strategic Modeling?
Learn how to use the Strategic Modeling framework to improve your strategic planning
Agenda
• Functional Trends in Strategic Planning
• Case Studies
• Strategic Modeling in EPBCS Strategic Modeling Overview
Models• Accounts
• Forecasting
• Reports
• Model Consolidations
• Scenario modeling
• Features
• Integrating Strategic Modeling
• Design and Tips and Tricks
Results of the 2019 State of Business Analytics Survey
• Companies need to get to 0 day (continuous) close• Timely reports and interactive analysis• Multiple plans with different images of the future• Need to shift directions quickly in reaction to news
events and changes in the competitive landscape• Greater analysis across a wider scope - fewer surprises
and panic situations for agile businesses as they recognize pre-identified scenarios and patterns
• Machine Learning and AI will be key differentiator for those who can harness their power before their competitors
epm.bi/SoBA
Trends in Strategic Planning
• Agile Planning Timeliness over precision
Analysis over reporting
• It’s better to have a plan that’s recent at high-level versus one that’s detailed but out-of-date.
• Understand the immediate direction of your company to make quick, data-driven changes
How quickly can I come up with a number that will cause me to make a different decision?
• Continuous planning Is Dec 31 materially different than Jan 1?
Rolling forecasts
• Zero Based Budgeting Rethink business needs instead of just rolling costs forward
More data is available than ever before, but how do we use it efficiently?
Agile Strategic Planning Needs
• React to opportunities Focused on analysis vs. building
models
Bottoms up / Top Down
• Strategic planning vs. strategic thinking.
One is analysis, and the other is synthesis
• Strategy needs to be operationalized
StrategicExecutive Input
Strategic Plan
Strategic Planning
“The real purpose of effective planning is not to make plans but to change the mental models that decision makers carry in their heads.”
“The ability to learn faster than your competitors may be the only sustainable competitive advantage”
- Arie de Geus
Typical Planning Cycle
• Strategy needs to adapt real time• Reason for Strategic Planning Focus decisions
• Real World Issues using Excel Budget obsolete after
BOD approval FP&A focused on
minimizing variances not Analysis
LRPs with >100 tabs, frequently crashing Excel
#REF errors
Budget (Annual)
Forecast (Monthly)
Forecast (Monthly)
Strategic LRP (Quarterly)
Forecast (Monthly)
Forecast (Monthly)
Strategic LRP (Quarterly)
Forecast (Monthly)
Forecast (Monthly)
Strategic LRP (Quarterly)
Forecast (Monthly)
Forecast (Monthly)
Strategic LRP (Quarterly)
Typical Long Range Planning Process
Cash Flow Statement
Income Statement
(FP&A)
Balance Sheet
(Treasury)
⚫ FP&A creates Income Statement to Op Income (EBIT)
⚫ Treasury creates Balance Sheet
⚫ CAPEX assumptions link the two
⚫ Integrates in areas “Below the line” (D&A, Interest Inc/Exp, etc.)
⚫ Cash Flows are afterthought results
Typical Long Range Planning Issues
⚫ Executive wants new assumptions ASAP
⚫ New information from the field
⚫ Version control
⚫ Models need updating (hard coded cells, broken links)
Cash Flow Statement
Income Statement
(FP&A)
Balance Sheet
(Treasury)
Strategic Long Range Planning Process with Strategic Modeling / HSF
Strategic Modeling
Global Assumptions
Treasury
FP&A Capex
SM/HSF is the central repository for strategic financial data
Example: Long Range Planning Process
Example: Data Flow
Strategic Modeling
EPBCS Financials
Other
EPBCS Frameworks:
CapExProjects
Workforce
GL (EBS, HFM,etc)
Excel Schedules
Essbase
Reporting
Cube
Planning Forms
Strategic Modeling –Case Studies
Design
Many Foreign Entities
Currency Considerations (Constant Currency)
Memo Account Drivers
REIT Asset Testing
Integration
Input from Planning Forms to EBIT from multiple divisions
Output to Essbase (BSO then to ASO)
Case Study: Technology / Real Estate / REIT
Design Combined Scenarios (Fuel
Cones) Debt Modeling outside HSF Capex Cash Flows: Assets
constructed for others Drivers
• RASM / CASM• Fuel Prices• Stats (Fleet, BH, ASM,
etc.)• Treasury strategies
(Dividends/Debt repayment)
Integration Actuals / Forecast from
Planning as a base
Case Study: Airline
Design
Several Entities
• Simplified P&L’s
• Rollup / Consolidation / Unit Ownership
Drivers - Unit P&L
Revenue / Expense Assumptions
Integration
Debt / Depreciation
• Modeled in HSF at Corporate Entity
• Fed back to Planning
Case Study: Healthcare Staffing
Design
29 highly diversified models
Consolidations with NCIs, wholly owned entities and JVs
Regulated and non-regulated accounting
Multiple Consolidation Business Cases and Scenarios
Modeled different risk levels
IFRS vs. Adjusted vs. GAAP
New product (one of the first SM projects anywhere)
Case Study: International Energy Holding company
Strategic Modeling - Overview
Strategic Modeling - Overview
• Came with EPBCS or PBCS +1 Enabled like the other frameworks Custom financial engine, not
Essbase based Will be included as “Scenario
Modeling” in Enterprise Planning
• Integrates through Groovy Scripting or Data Maps
• Allows for agile creation of strategic plans with what-If scenario analysis
• Creates integrated financial statements with accounting integrity
Strategic modeling in Smart View
• Download the Strategic Modeling add-in from EPBCS
• Need to install Smart View first• Run the install program as Administrator
Strategic modeling in Smart View
• Creates new options in the Smart View Panel• Adds ribbon menu to Excel
Note: As of September 2019, Several Functions like Creating Free Style Reports are available in Smart View only
Models
Models (Entities in HSF) contain the financial framework of Strategic Modeling
Models are checked in and out to maintain version control
Models can be linked together in a hierarchy in the Consolidation view
Security can be set at a global or model level (Modeler, Analyst, Viewer, None)
Considerations:• Legal structure / Geographic• M&A / Divesture• Impact of business scenarios• Plant / Store
Creating New Models
Can be created from:
• A Template
• An Existing Model
Models are stand alone entities and each contains an entire set of financials (I/S, B/S, CFS)
Depending on your corporation models may be legal entities, plants, stores, M&A targets, etc.
Templates
• Templates are used to quickly create a model based on various industries
• Templates provide different accounts and reports depending on the industry
• Templates include a hierarchical set of accounts but without data or time periods
• You can create custom templates or use the ones provided
Consolidation View
• Consolidations arrange models into a hierarchy and allow for combining models via various accounting methods
• Scenarios can vary by model to provide flexible views of the forecasts• Business Cases allow for agile what-if modeling of different Scenarios
Consolidation View
• More detail on consolidation can be controlled in Child or Parent attributes
• Groups of accounts for eliminations• Deal time periods to consolidate
Models - Accounts
The Account View is the main area for creating forecasts. It contains all accounts (I/S, B/S, CFS, Memo, Ratios, etc)
Accounts:• Predefined and are permanently
linked to maintain accounting integrity
• Can be sub-accounted for additional detail and memo accounts can be used for further customization
• Each account has 2 parts, input and output
• Can be grouped with custom grouping for easier navigation
Account Forecasting
• Accounts can be forecasted using predefined methods or free form formulas
• Can be linked to other accounts (ex. LIBOR, GDP, etc.)
Models - Features
Scenarios
• Create and manage scenarios to analyze what if situations
• Reports can be created to provide variance analysis between scenarios
• Scenarios can be used to create different business cases for consolidations
Models - Features
Audit Trail
• Provides transparency into calculated amounts
• Can drill back into components – All the way to the input
Models - Features
Goal Seek
• Allows user to set a target for an account by making changes in another related account
• Can be performed for a single period or a range of periods
• Can be adjusted by the same % or amount
Models - Features
Debt Scheduler
• Easy way to model all features of debt
• Capture and manage cash flow involved in debt investments (debt amortization, payments, interest, and interest rates)
• Automatically flows into appropriate financials (ex. Interest Expense on I/S, Principal amount on B/S, etc.)
Models - Features
Funding Options
• Balancing routine which maintains accounting integrity between all of the financial statements
• Users can specify what to do with cash surpluses or how to fund deficits
Models - Features
Simulation
• Recently simulations have been added to Strategic Modeling
• Features similar to Crystal Ball
• Run Monte Carlo or Latin Hypercube sampling based on probability assumptions
Models - Reports
Standard reports are available out of the box when models are created
Reports are automatically populated with data from the Account View
Audit Trail can be used from reports to drill back to account details
Freestyle custom reports can be created directly in Strategic Modeling (Smart View)
Strategic Modeling –Integrations
Integrating to Strategic Modeling
ProVery Flexible
Define complex mapping
Scaling
Con
Difficult for non-coders
Higher Maintenance
ProEasy for non-coders
Graphical interface
Excel template
Con
Limited flexibility
No scaling
Integrating to Strategic Modeling - Examples
Strategic Modeling –Considerations and Tips and
Tricks
Tips and Tricks - Design
• Get strategy right first, then build the models around that (Determine the point of having an LRP)
• Change Management - Get buy in from users, not just rebuilding Excel models, but creating a better method
• Use the Oracle SR system, follow up, provide feedback and stay active with the support team
Tips and Tricks – Strategic Modeling
Try to leverage SM functionality when possible• Build Account Groups for easy navigation• Audit Trail from reports to provide
transparency• Debt Scheduler integrates directly into
financial statements (Interest Expense, S-T and L-T Liabilities, etc.)
• Consolidation functionally to roll up models• Up front efforts to build master models to
use as a template
Design Issues
• Over complicating models Trying to fit every aspect of the business into a LRP
Immaterial details in out years
Loses agility
Increased maintenance
• Change management Users need to be on board with the tool
Relying too much on Excel
Refusing to admit past errors
Strategic Modeling –Conclusion Summary
Summary
• Trends in Strategic Planning
• Case Studies
• Strategic Modeling in EPBCS Strategic Modeling Overview
Models• Accounts
• Forecasting
• Reports
• Model Consolidations
• Scenario modeling
• Features
• Integrating with Strategic Modeling
• Design and Tips and Tricks
Continuing Education
• Build an Oracle Planning & Budgeting Cloud
• Application from start to finish• Administer and automate your
solution• Migrate from on-premises to the
Cloud• Best practices for setting up
your Oracle EPM Cloud Instance
Essbase
Admin Studio Smart View
• Build a report package • Execute the reporting cycle
from start to finish• Sign off or reject the final
product• Assign security• Migrate objects between
environments
• Steps to set up your Oracle
Analytics Cloud instance
• How to build Essbase Cloud
cubes from start to finish
• Maintaining dimensions and
loading data
• Creating calculations and
calculating data
• Assigning security
Admin End User Advanced
Smart View
Admin/End Users
Cloud
OAC Planning Narrative Reporting
Best Selling Oracle BI & EPM Books
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