Thursday May 26, 2016

Part A: New Revenue Recognition–Disclosure, the Forgotten Implication

Part A - Overview

I was speaking with Mike Malwitz, Principal Solutions Consultant at Oracle, and I asked him about concerns that he has heard from organizations recently around the new revenue recognition guidelines. His responses were illuminating. 

Nigel Youell: “Organizations have been busy figuring out how to recognize and measure revenue under the new guidelines set out by FASB and IASB, but are there other impacts they should be considering?”

Mike Malwitz: “I’m hearing a lot of concerns, from the people with whom I am talking, about the level of contract revenue detail that is to be disclosed. That shouldn’t be a big surprise since investors and other users of financial statements have consistently indicated that revenue disclosure requirements in both the existing U.S. GAAP and IFRS were insufficient for analyzing an entity’s revenue.”

NY: “So what are the intentions for disclosure under the new revenue recognition guidelines?”

MM: “Disclosure requirements under the new revenue guidelines are intended to provide users of financial statements with comprehensive information about the nature, amount, timing, and uncertainty of revenue and cash flows arising from the entity’s contracts. Affected organizations are expected to provide information about: 

  • Revenue recognized from contracts with customers, including the disaggregation of revenue into appropriate categories; 

  • Contract balances, including the opening and closing balances of receivables, contract assets, and contract liabilities;

  • Performance obligations, including when the entity typically satisfies its performance obligations and the transaction price that is allocated to the remaining performance obligations in a contract;

  • Significant judgments, and changes in judgments, made in applying the requirements to those contracts. In many cases, organizations will be required to report information that they may not have previously monitored.”

NY: “Is this a major shift in thinking from the current guidelines?”

MM: “Current revenue recognition guidance under both IFRS and US GAAP is limited. The new disclosure requirements reflect the belief that disclosure should be more than just a compliance exercise. Companies need to apply a thought process to disclosure and disclose sufficient information about their judgments and their approach to help users gain an accurate understanding of the numbers in the financial statements. This means qualitative information is just as important as quantitative information for helping the reviewer better understand the nature of the organization’s contract revenue.”

To read part 2 and part 3, click on the respective title.

Part 2: New Revenue Recognition – Disclosure, the Forgotten Implication
Part 3: New Revenue Recognition – Disclosure, the Forgotten Implication

To learn more about Enterprise Performance Management, click

Monday May 16, 2016

New Revenue Recognition Guidelines: For Some, it’s New; for Oracle, it’s Déjà Vu

Part six of a 6-part series on new revenue recognition guidelines.

So now you’re faced with the challenge of introducing new revenue recognition guidelines to your organization. You realize that changes to your ERP systems are required, but you may not be quite sure what the final rules and procedures will look like. And, in any case, it’s going to take some time to make the required system changes. Are you at a standstill?

Good news! There is a way to get ahead of your ERP implementation of Oracle Revenue Management Cloud Service, while evaluating the impact of the new revenue guidelines. First, it’s important to validate the new accounting rules to prepare external stakeholders with new revenue comparisons as soon as possible. The trick, then, is to use a multidimensional consolidation tool during stage 2 of the implementation to prepare reports that illustrate and differentiate revenue under new and existing revenue reconciliation methods. 

Am I sure this will help? Yes. In fact, we’ve already helped many organizations successfully address a similar situation. In 2007, new revenue recognition rules set out by IFRS presented this exact challenge to many organizations (especially in Europe). Here’s what the head of Financial Reporting for a large book publisher said at the time about this transition, “…the group was able to quickly establish a unified chart of accounts in Oracle Hyperion Financial Management (HFM) covering UK GAAP, U.S. GAAP, and IFRS. It was then a simple matter to post the adjustments against these accounts as required.” 

The use of a multidimensional consolidation tool, like HFM, significantly simplified the ability to report the difference in revenue results between existing methods and the new IFRS rules. And it prepared external stakeholders to understand the impact of the new IFRS framework. But it also eased the transition required for ERP updates, since the many of accounting rules were defined early in the implementation of the new IFRS revenue recognition rules. 

Similarly, the task of updating your ERP systems to reflect the new FASB/IASB revenue recognition guidelines may appear daunting, but using multidimensional consolidation tools has been proven to be instrumental during the transitional stages. Once again, the impact studies created with HFM act as a control for the implementation of Oracle Revenue Management Cloud Service (RMCS) on your EBS, Fusion or other ERP.   RMCS uses rules engines to:

Identify accounting contracts, 

Identify distinct performance obligations, and classify them as over-time or point-in-time, 

Allocate the transaction price to the performance obligations in your Oracle or non-Oracle ordering, fulfillment, receivable, and other relevant systems. 

Also, RMCS serves as a customer liability and asset subledger to EBS and Cloud Service General Ledgers. 

Of course, as you deploy it, your detail rule setting will be subject to revision as you work on interpreting the standard.  You will be able to use its iterative modeling capabilities in conjunction with HFM to analyze the impact of the guidelines on your fiscal and management reporting.

Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title: 


To learn more about Enterprise Performance Management, click here.

Tuesday May 10, 2016

Oracle EPM Cloud is on a Roll – Introducing 3 New Services

Oracle EPM Cloud is on a roll.  With more than 1200 customers and nearly 70,000 users gained over the last two years with our Planning and Budgeting Cloud and Enterprise Performance Reporting Cloud solutions, we are continuing the momentum with the availability of 3 new EPM Cloud offerings  –  Enterprise Planning Cloud, Account Reconciliation Cloud, and Financial Consolidation and Close Cloud.

What do Oracle Cloud customers think of our solutions?
                            "Oracle Planning and Budgeting Cloud Service is the gold standard of
                            cloud-based planning solutions.We wanted a rapidly deployable system
                            to improve our planning systems and forecasting accuracy during
                            a period of ambitious global expansion." – Elaine McKechnie,
                           Head of Group Management Information Systems, Baxters Food Group

Customers now have the option to deploy cloud-based EPM solutions across their entire Finance function and even beyond Finance.  Why is this important?

Offering a complete suite of EPM solutions in the cloud enables our customers to move away from the disconnected spreadsheets they have traditionally used for EPM processes toward more “enterprise” applications.  Cloud makes it easier and feasible to deploy applications across a wider audience throughout the organization, which can lead to higher forecast accuracy, better decisions, and more reliable results.

In a recent EPM Cloud Trends survey, over 50% of the organizations that have EPM applications in the Cloud today did not have these applications previously on-premises.  Moreover, EPM in the Cloud delivers a better experience all around, with more than 50% indicating that EPM Cloud applications deliver better functionality, scalability, performance, implementation time and less complexity, and the ability to make the solutions available to a wider audience.

So what are the new Oracle EPM Cloud solutions that our customers can now take advantage of?

•    Enterprise Planning Cloud enables business owners to maintain independent plans while aligning planning processes across the enterprise —all with the ease and simplicity of the cloud—and without heavy reliance on IT.  Pre-built business process frameworks for Workforce Planning, Project Planning, Capital Asset Planning, and Financial Statements can be used by both financial and operational planners.

•    Account Reconciliation Cloud enables you to automate reconciliation tasks, support risk-based cycles, and gain real-time visibility into reconciliation performance.

•    Financial Consolidation and Close Cloud helps customers optimize the close with best practice consolidation out-of-the box, functionality to comprehensively address the extended close, and accurate and transparent reporting.

Stay tuned as we continue to add to our portfolio of EPM Cloud offerings and customer successes!

To learn more about EPM Cloud, click here

Listen and read about more EPM Cloud customer successes here

Monday May 09, 2016

New Revenue Recognition Guidelines: What Should I be Doing?

Part 5 of a 6-part series on new revenue recognition guidelines.

When considering the introduction of the revenue recognition guidelines, begin as soon as possible. Don’t wait until the “mandatory” date to address the new guidelines; it will be too late. Here are the typical stages that we see organizations going through as they prepare for the new revenue recognition guidelines:

Stage 1: Study the impact and determine strategy
     •    Define the procedures for assigning value to a contract’s performance objectives
     •    Realistically analyze your accounting subsystems
          o    Can they easily be tweaked to accommodate the new revenue recognition guidelines?
          o    Will major systems need heavy modification or replacement? If so, what are the options?
          o    Do you have the resources to retrofit  on-premises systems? Will it require outsourcing?
          o    Would a cloud implementation provide a quicker and more financially prudent solution? 

Stage 2: Identify the reporting information required by external and internal stakeholders
     •    Determine the impact that the new guidance will have on existing contracts
     •    Consolidate the historic impact under new guidance
     •    Prepare reports to illustrate and differentiate revenue under new and prior revenue reconciliation methods

Stage 3: Implement the required accounting subsystems changes
     •    Configure accounting rules and set up ledgers
     •    Modify or install the accounting subsystems
     •    Process and report using dual accounting

Stage 4: Transform the business
     •    Communicate the impact of the changes to the business
     •    Train the organization to apply the new revenue recognition guidelines
     •    Report using new revenue recognition guidelines

But how are you going to manage these stages? How do you begin? Part 6 of this series, “How will Oracle’s experience help?” provides some advice. Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title:

Part one: Like it or not, they’re on the way

Part two: What are the new guidelines? Can you provide a simple example?
Part three: Who is affected?
Part four: What are the challenges for affected organizations?
Part six: How will Oracle’s experience help?

To learn more about Enterprise Performance Management, click here.

Monday May 02, 2016

New Revenue Recognition Guidelines: What Challenges Do the New Rules Present?

Part four of a 6-part series on new revenue recognition guidelines.

The new revenue recognition guidelines, proposed jointly by FASB and IASB, will impact multiple areas of affected organizations. They are likely to affect IT systems, internal processes and controls. For many organizations, changes in the way revenue is recognized and reported will generate questions from external stakeholders and concerns from the organization’s staff. 

With the new revenue recognition guidelines, expect IT systems to be impacted: 

Enterprise resource planning (ERP) systems may need to be upgraded or modified to capture additional data to support the necessary accounting and disclosures. How and when does your ERP system allocate prices for products and services? Does it have the capabilities to accrue for liabilities of goods and services to customers by performance obligation? Is it capable of recognizing transfers to customers of the performance obligations over time using the seven new tests of GAAP, rather than the old four? 

There will likely be a need to report revenue under new and existing guidelines. It will take some time for external stakeholders to get adjusted to the new results being reported and understand how the new reports map to the old way of doing things. In an effort to ease this transition, many organizations will want to report using both guidelines for a pre-determined period of time.  

Since the new guidelines often require judgment and use of estimates (both estimated selling prices and variable considerations) to value the performance obligations, internal controls and accounting procedures will need to be reviewed and, in many cases, revised. Do you have a pre-accrual estimation process in place?  Do you have post-accrual revision of estimation process in place?

Anticipate external questions. Key financial measures and ratios may change, which could affect analyst expectations. 

Expect internal concerns. The new rules may impact sales commissions, bonuses, budgeting, and compliance with contractual covenants. For example, the revenue recognition guidelines are likely to trigger reviews and changes to organizational sales and contracting processes. Additional thought will need to be given to contract language and sales compensation plans.

How do I go about introducing the new revenue recognition guidelines to my organization? See part 5 of this series, “What should I be doing?” for some guidance. Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title: 


Monday Apr 25, 2016

New Revenue Recognition Guidelines: Who is Affected?

Part three of a 6-part series on new revenue recognition guidelines.

The new revenue recognition guidelines redefines “revenue” for every US GAAP and IFRS company.  But, its impact is more severe for companies who offer discounted goods and services alongside fully-priced goods or services, and for those who deliver to customers over extended time periods, or both simultaneously. 

There are exceptions; the guidelines do not apply to organizations covered by other standards (e.g., insurance or leasing contracts).

All companies need to review their revenue for hidden bundling and implicit performance obligations. These guidelines are likely to impact pharmaceutical companies, telecoms, construction contractors, real estate developers, auto companies, and other firms with multiple sources of revenue.

Organizations - Examples

1. A software company ships a new game, but some missions or episodes are missing: 

Under today’s GAAP, they would defer all the revenue until the missing episodes were published. 

Under the new guidelines, they recognize revenue that relates to the delivery they performed, and postpone recognizing the remainder of the revenue until the delayed missions are delivered. A key question is how to identify and value a performance obligation of this nature, especially since this company doesn’t sell missions separately.


a. A cellular telephone sold under contract that includes automatic software upgrades for one year is considered a single performance obligation.
b. A phone with a list price of $600 is sold to a customer under a service contract for $200. The cell bandwidth revenue for that client must be recognized to include a “claw back” of the difference of the list and selling price of the device.

3. An auto dealer that includes maintenance services with the sale of a car can only recognize the service revenue once the owner of the car brings it in for maintenance.

4. Similarly, high-tech companies that include software licenses, consulting, and support services on sales contracts determined to be related will recognize service revenue once the services are delivered.

How will the new revenue recognition guidelines affect my organization? Look at part 4 of this series, “What are the challenges for affected organizations?” to answer this question. Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title: 


To learn more about Enterprise Performance Management, click here

Thursday Apr 21, 2016

The Impact of Not Changing

Guest Blogger Richard  Harsevoort

How the World is Evolving

As a consumer, we have acknowledged that we are living in the digital era. There are roughly 1 billion active websites and 2 billion smartphone users worldwide; meanwhile the number of fixed telephone lines has decreased over the last 9 years. 

The impact of not changing.png

Companies may not see today how they will enact change tomorrow. According to Forrester: ‘only 27% of today’s businesses have a coherent digital strategy, which determines how the firm will create customer value as a digital business.’ Instead, more focus is spent on keeping the lights on rather than innovation.

To stay relevant, organizations, business units, and individuals need to know where business technology is headed, and be sure to remain up to date with the ever shifting digital trend. It is time to take action: make digital transformation your key strategic thrust.
Yes, most of us are too limited in our thinking. By simply changing the processes, we can be more successful with disruptive transformation. The digital era is asking to widen our horizon and adapt modern technology and new business models.

With ample possibilities today, there is no need to own the equipment to run your business. Lease it for the duration of a contract and put the responsibilities down to your suppliers, allows focus on your core business and respond effectively on chances.

We are all familiar with Uber and AirBnB, but startups have been making waves across all industries: temporary office spaces1, self-service bikes2 and food box delivery services3. Another shift that we are seeing is the introduction of Light as a Service from Philips to service Schiphol Airport in the Netherlands. The light as a service means that, Schiphol pays for the light it uses (pay-as-you go), while Philips remains the owner of all fixtures and installations.

Lighting fixtures were specially developed for Amsterdam Airport Schiphol that will last 75% longer, as the design of the fixtures improved the serviceability.

The Growing Use of Technology in the Finance Function

As business models change, the systems has to change alongside. Nowadays, Financial Controllers (FCs) prefer to have more insights and an increased focus on financial planning. Thus, better understanding of the income, cashflow and assets help determine the financial goals. Having real-time insights and adapting new business models are driving more and more financial departments to the cloud.

Similarly, Forrester states, systems are integrated and cloud-based to create a connected and dynamic ecosystem. The reasons for making the move are many, nonetheless the results are typically the same: faster innovation, greater scale, lower costs, and operational excellence.

If you are still concerned about the risks of changing
finance, keep in mind the risks of not moving on.

To learn more about Oracle EPM Cloud, click here


Tuesday Apr 19, 2016

New Revenue Recognition Guidelines: What Are the Guidelines and Examples?

Part two of a 6-part series on new revenue recognition guidelines.

The core principle of the new guidelines is to recognize revenue to depict the transfer of promised goods or service to customers in an amount that reflects the consideration to which the entity expects to be entitled for those goods or services2. That is, the aim is to recognize revenue consistently as the customer assumes ownership of the various components of a contract, and values the revenue at that obligation’s appropriate share of the expected revenue.

Steps to achieve this core principle:

Establish the contract with the customer
Identify the performance obligations (promises / deliverables) in the contract
Determine the (overall) transaction price
Assign the transaction price to the contract’s performance obligations
Recognize revenue as the reporting organization satisfies a performance obligation

A Simple Example
Your organization sells a computer system and printer to a customer for $1,000. The computer and software are delivered to the customer in June but, due to manufacturing delays, the printer is delivered in July. Under the new Performance Obligation guidelines, when is the revenue for the various components of the contract to be recognized?

1. A contract is established for a computer system

2. Consisting of three performance obligations:

a. Laptop computer
b. Software
c. Printer
3. The overall transaction price is $1,000
4. The company’s standalone selling prices are:

a. Laptop: $800
b. Printer: $200
c. Software: $200
(Total: $1,200) 

Under the contract, then, the performance obligations are assigned transaction prices of: 

a. Laptop: $1,000 / 1200 * 800 = $666.67
b. Printer: $1,000 / 1200 * 200 = $166.67
c. Software: $1,000 / 1200 * 200 = $166.67
(Total: $1,000)

Once either party has acted on the contract (i.e., at the earlier of the customer accepting an invoice or the vendor commencing shipping), the vendor accrues the liability to the customer for each performance obligation at the assigned revenue valuations.

5. Upon delivery of the laptop and software, the vendor recognizes $833.33 in June. At the end of June, the balance sheet shows an accrued liability to the customer of $166.67 for the printer. In July, when the client takes ownership of the printer, the vendor recognizes $166.67.

Do the new revenue recognition guidelines affect you? Part 3 of this series, “Who is Affected?” may help you answer that question. 

Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title:

Part one: Like it or not, they’re on the way 

Part three: Who is affected?
Part four: What are the challenges for affected organizations?
Part five: What should I be doing?
Part six: How will Oracle’s experience help?

To learn more about Enterprise Performance Management, click here.

Retrieved on March 9, 2016 from FASB web page:

Monday Apr 11, 2016

New Revenue Recognition Guidelines: Like it or Not, They’re on the Way

Part one of a 6-part series on new revenue recognition guidelines.

In May, 2014, the Financial Accounting Standards Board and the International Accounting Standards Board issued a joint revenue recognition standard related to customer contracts. The new guidelines impact most organizations that deliver goods and/or services on a contract basis, especially when delivered over extended periods of time.

Using the new guidelines for revenue recognition, companies align revenue to the delivery of “performance obligations.” They must account for these obligations - items that are owed to the customer under the terms of the contract - as accrued contract liabilities, and extinguish them by transferring those items to customers and recognizing revenue on the successful transfer. No longer will companies apply the variety of current practices for recognizing revenue (for example, deferring revenue on early invoicing) or apply current, by-industry US revenue guidance. Application of the guidelines will require some companies to recognize that a contract exists where they previously may not have thought they had one.

The aim of the joint guidelines is to establish a common set of global standards for all companies to recognize and report revenue. But, it’s not really about accounting as much as it’s about capital markets. By uniformly applying these guidelines, it becomes easier for external stakeholders (such as shareholders or financial analysts) to compare revenue performance between organizations. It’s also interesting to note that in a September 2013 speech, SEC Enforcement Director, Andrew Ceresney stated that “Revenue recognition issues will remain a staple of our financial fraud caseload.[1]”

There isn’t a great deal of time remaining to implement these new guidelines. Public organizations should apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Nonpublic organizations should apply the new revenue standard to annual reporting periods beginning after December 15, 2018.

These guidelines represent a major shift in revenue recognition for affected companies. For some, it represents the first time that they’ve had to rethink how they “count” revenue, and they may not be sure of what’s involved in this switch from a procedural or systems perspective. Others, especially for those who went through the adoption of IFRS standards in 2007, have experienced this type of transformation before. And many organizations, with Oracle’s help, made that IFRS transition smoothly.

With the tight timeline, and some very serious decisions to be made, many will have questions. Other articles in the New Revenue Recognition Guideline series can be reviewed by clicking the respective title (as they become available):

Part two: What are the new guidelines? Can you provide a simple example?
Part three: Who is affected?
Part four: What are the challenges for affected organizations?
Part five: What should I be doing?
Part six: How will Oracle’s experience help?

To learn more about Enterprise Performance Management, click here.

Retrieved on April 5, 2016 from SEC web page:

The Data Governance Journey – How do we map out the trip?

By Guest Blogger Gilles Demarquet

A previous post stated that the business user community and IT share responsibility for the maintenance of hierarchy definitions in a hybrid environment. While this helps to narrow “who” is involved in maintaining data hierarchy definitions, there is also need to consider the “how” the data hierarchy changes will occur. To answer “how” involves data governance.

I see two stages in the data governance journey: transition, when a data governance culture is being introduced and implemented; and ongoing, once data governance is in production. In this post, I discuss the various considerations for the transition phase. In an ensuing post, I will discuss the ongoing data governance roles in a hybrid environment.

The main outputs of the transition phase are the procedures and rules to be followed in the ongoing stage. In the transition phase, procedures and rules are defined to answer questions like:

  • What is the organizational definition for data? For example, does everyone in the organization has the same understanding a term like “Revenue”?

  • Is all content of hierarchies necessary? One company I worked with had 10,000 cost centers in their existing system, but no transactions were posted in the past 5 years for 2,000 of them. Are these 2,000 cost centers still necessary? 

  • Can a user make changes himself without review? Surely, we don’t want to create a “wild west” environment for data hierarchy management.

  • If a user’s change request is subject to a review and approval process, who conducts the review? 

  • What if a conflict arises between business user communities? Should there be an oversight group to resolve problems should conflicts occur? 

  • How often will changes be made to the defined hierarchies?

  • How are updated definitions communicated throughout the user community? 

Many organizations that I’ve worked with have introduced a data governance committee to address these questions and to generate the ongoing procedures. The committee is made up of a cross-functional team of stakeholders, business users and IT, that creates the governance rules and policies to be implemented. The committee is often given its mandate from C-level executives and, in cases of deadlock within the committee, resolution may involve C-level adjudication.

It’s important to not underestimate the effort required to develop a common understanding of the data aggregation definitions used throughout the organization, to determine data ownership, and to reach agreement on the rules and procedures that will govern the maintenance of these definitions in the ongoing system. During the transition phase of a recent data governance project that I assisted, 75% of the time was spent to reach agreement on data aggregation definitions, and the rules and procedures - the remaining time went to the actual system implementation. This upfront investment in obtaining agreement, however, has paid dividends in the efficiency of the ongoing maintenance of the data hierarchies. 

To learn more about Oracle Enterprise Data Governance, click here

Monday Mar 28, 2016

The Data Governance Journey - What do we take on the trip?

By Guest Blogger Gilles Demarquet

The data governance journey is about helping an organization consistently and correctly make sense of its data. What is data? Where does it come from? Are there different types of data?

In simple terms, an organization performs transactions – a few transaction examples for a manufacturing company include: purchase supplies, produce a product, sell products to customers, receive payment for sales, pay for supplies. For statutory purposes, the organization records details for every transaction and produces and stores transaction data of the event.

To simplify the creation of transactions, reference data is a source of consistent values used to classify the characteristics of an event. For example, organizations dictate specific values for reference data such as products, account, cost center, etc. Reference data tends to be either fairly static or, if subject to frequent changes, limited to a single application.

While transaction data is used to capture the activities that have occurred, it also serves as the basis for performance evaluation and assessing potential future actions. When the department creating a transaction is the only consumer requiring summaries of its transaction data, it tends to be fairly simple to define and manage how its results are to be aggregated. It gets a bit trickier, however, when summaries of transaction data are required across the enterprise – often to support higher-level analysis. How it is summarized for its various consumers is more complicated because it must satisfy a variety of people’s aggregation requirements. Consider something as simple as a record created by a sales transaction. How many people might be interested in understanding the contribution that this customer has on their particular view of the organization? The geographic sales organization would want to understand how this customer’s sales impacts its branches’ revenue; the production department may want to see how these sales affect product revenue (and profitability); and one requirement for the finance department is total company revenue. Each of these consumers have a different “view” of revenue, and it becomes important for the organization to understand and manage the various business contexts. These business contexts are referred to as master data and master data gives business meaning to transaction summaries.

When embarking on the data governance journey in a hybrid environment, it’s important to understand the roles played by these different types of data and how they drive the data governance process. I will revisit these data types in a future post. 

To learn more about Oracle Enterprise Data Governance, click here

Monday Mar 14, 2016

The Data Governance Journey – Why is it Important to Take This Trip?

By Guest Blogger Gilles Demarquet

People have been asking me questions about data governance - “Why is data governance important?” “What is it, anyway?” Let me take a moment to describe what is happening with organizational data today, and why the data governance journey is important.

Most people recognize that organizational data is required by and being accessed across a wide spectrum of the business. Organizational data is being re-purposed and reused in ways its creator and “owner” never originally expected. In fact, the data creators are no longer the only consumer – and, often, not even the primary consumer - of their own data. The appetite for using data to support many decisions and in many different situations creates a growing array of requirements for how to summarize and present the data's results – many of these requirements were likely never imagined when the data was created.

With new ways to present results being requested daily, the data inevitably fails to meet new requirements. More organizations are recognizing a strategic and financial value for efficiently maintaining the way to provide consistent summarized results to all interested parties. In the end, organizations recognize that someone needs to take responsibility for managing and controlling these definitions – and guess what?  That’s where “Governance” comes in!

Data Governance sets the rules and establishes the processes to allow all parties to work together to manage the way that aggregated data is made available. Data governance is NOT interested in specific data values or how they are stored, but data governance is primarily concerned with making summarized results available in a way that helps every business department efficiently and consistently evaluate performance and support business decisions.

In a future post, I will delve into the way data governance ties in to the underlying activities of the organization. I also plan to expand upon the roles of committed people, strong processes, and technology to maintain reliable definitions for the master data used by your on-premises and cloud applications.

To learn more about Oracle Enterprise Data Governance, click here

Tuesday Mar 08, 2016

Reasons to be Cheerful – a Whole 1000 Cloud Reasons!

In the song “Reasons to be Cheerful (Part 3)” released by Ian Dury and Blockheads in 1979, the lyrics list – believe it or not – many reasons to be cheerful! You will be pleased to know I will not be listing 1000 reasons here, as my 1000 reasons relates to the milestone reached last month of 1000 customers of Oracle EPM Cloud Services. A milestone reached in just two years from the release of the first Oracle EPM Cloud Service – Oracle Planning and Budgeting Cloud Service (PBCS) - on 14 February 2014. Certainly for Oracle and our customers, a 1000 reasons to be cheerful – you can listen to some of our customers by clicking on these names Racepoint Global, Western Alliance Bancorp, Moda Holding, Bukhatir Group, and Baxters.

To put the numbers in perspective, it took 5 years to reach the 1000 customer milestone when we released Oracle Hyperion Planning back in 2000. If you do the math for Oracle Planning and Budgeting Cloud, you will see customers have been signing up at the rate of 1.37 per day every day since the launch!

So, to what do we attribute this success? Here is my list:

  1. Oracle PBCS is built from the ground up for pure cloud deployment and can support simple requirements as well as enterprise planning complexities that the on-premises Hyperion Planning product handles.

  2. Oracle PBCS is based on the experience of over 5000 planning and forecasting customers globally, 1000s of years of staff experience, but is also highly innovative benefiting from Oracle’s large investment in R&D.

  3. Oracle PBCS integration is built to support the smallest or largest customer needs. You can start with simple ASCII imports and then add more sophisticated integration capabilities such as GL/Hierarchy mapping, data quality management and drill through to source.

  4. Oracle PBCS is priced and designed to provide competitive TCO whether you are a small or large enterprise (just a single subscription fee per user and no additional hidden charges).

  5. Oracle PBCS is proven for any size/complexity of EPM requirements and for scalability. Over 50% of the 1000 customers are small or midsize, but we also have user counts of more than 1000 in some customers who are using it for complex zero-based budgeting and other planning activities.

  6. Oracle PBCS provides simplified ‘business user’ driven cloud deployment, configuration, and administration, designed to be implemented and managed by the finance and the lines of business with minimal reliance on IT or additional consultants. Virtually zero training is needed, due to built-in starter kits and online help/tutorials.

  7. If you should need help globally, there are 1000s of trained experts available through Oracle’s vast network of partners, many of whom offer low cost, fixed price packages for their PBCS services.

  8. Oracle PBCS deployments span the entire enterprise across finance, marketing, sales, operations, HR, etc. using a wide span of planning techniques including predictive planning, driver-based planning, rolling forecasts and zero-based budgeting.

  9. Deployed in the Oracle-owned and operated data centers, PBCS leverages in-memory processing and is designed to scale without impact to performance or complexity of administration.

  10. The Oracle Cloud single tenancy approach, along with two environments (test and production), provides world class security and the flexibility for customers to chose when they upgrade to suit their specific business needs.

I think this is a good top 10 list for now. There are many more reasons to be cheerful, and more to come as additional enterprise Oracle EPM capabilities are coming to Oracle SaaS very soon.

By the way, in case you were wondering, there never was a part 1 or 2 from Ian Dury and the Blockheads, but do go out on the internet and listen to part 3; it is a classic. While you are there, you can find out much more about Oracle EPM Cloud solutions here.

Friday Jan 29, 2016

Tell me more - Narrative Reporting Comes of Age

By Guest Blogger Wayne Heather 

With the digital economy dominating many business segments today, the value of many organizations goes beyond tangible assets. In fact, nowadays it’s not unheard of for 80% of the value of the company to consist of intangible assets. AirBnb and Uber are perfect examples; leaders in their respective industries, yet they own no assets directly associated with delivering their services. Most of the value of their businesses is held in intellectual property, and in their business strategy and model.  So how can you make sure that an accurate value of the organization is captured and shared?

Traditional Reporting is Falling Short.

Today, most reporting tools are great at disclosing quantitative information, but fall short in the delivery of qualitative information. Most organisations have systems for operational and financial reporting, but often struggle to collect and report on the business narrative to explain those numbers. While organisations are obligated to report in a timely and accurate manner, they also see a need to deliver a level of visibility and transparency that provide stakeholders an understanding to instill confidence in the numbers being reported. 

What is Narrative Reporting?

It is very difficult to communicate things like business strategy, budget justifications, or the cause of certain patterns in the data purely through numbers and graphs on traditional reports. By using a more free-form layout of descriptive paragraphs, narrative reports augment and, in some cases, replace traditional structured content of tables or graphs. Readers find narrative reports extremely useful for understanding not only “what” has happened, but to answer the “who”, “when”, “where” and “why” questions that provide a deeper explanation of the organization’s performance. 

Most people immediately see the value of narrative reporting for external reporting and, sometimes, regulatory reporting. They recognize that for many companies, especially those who's value is tied to intangible assets, narrative reporting is proving vital for helping external readers understand the true value of an organization.  

Are there Broader Audiences for Narrative Reporting?

Upon seeing the power of narrative reporting for external communication, there is a large and growing appetite from internal consumers for reports that present more than just quantitative information to explain the organization’s performance. The richer set of information that narrative reporting brings, enhances communication among the various internal departments, creating an environment of empathy and teamwork, and the desire to pull together toward common organizational objectives.

In subsequent posts, I plan to look deeper into what narrative reporting looks like using three factors – committed people, strong processes, and technology to effectively assemble the prescribed content for narrative reports –  that organizations should consider to successfully implement narrative reporting.

To learn more about Oracle's narrative reporting solution, click here

Wednesday Jan 20, 2016

Maintaining Margins by Understanding Costs

Recently, the Finance Executives Research Foundation (FERF) and Protiviti released the results of their Q3-2015 “Finance Priorities” survey, where more than six hundred financial professionals provided opinions on the priorities for finance organizations.  The report, “Maintaining Margins While Staying Vigilant” (available here), points out that “margin and earning performance ranks as the highest priority…in our survey.”

The report recommends an action item for Finance Leaders: “Review how the company currently manages and monitors margin and earnings performance, assess how this approach compares to best practices, and determine how to address any gaps.”

Ultimately, a key to managing margins is controlling costs. How does your organization manage costs and, by inference, margins?

When facing a cost-saving challenge, some organizations assign arbitrary cost cutting goals (e.g., “we will cut all costs by 5%”). While some organizations have seen short-term benefits in this approach, it doesn’t generally generate long-term success. This approach can actually increase risks, for example, by impacting employee morale because of unrealistic demands, or by reducing quality leading to customer dissatisfaction, just to name a couple.

A better approach to managing costs is to understand the behavior of costs. Organizations that undertake to study how costs respond to business activity are more likely to implement a reasonable approach to monitoring costs. It appears that initiatives like activity-based costing / management (ABC/M) may still have a place in finance organizations.

Continue to check this blog site. We will post more blogs on ABC/M to provide specifics on how it is being applied. I will also look at other findings from the FERF “Finance Priorities” survey.

To learn more about Oracle Profitability and Cost Management, click here


This blog will highlight key EPM market trends, recent events and other news of interest to our field, customers and partners.


« May 2016