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.


2.

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: 


FAQs:

Part two: What are the new guidelines? Can you provide a simple example?
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

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.


https://www.oracle.com/assets/cw31-cloud-solutions-2-2577646.jpg
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

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1  https://liquidspace.com/
2 http://www.jcdecaux-oneworld.com/jcdecaux-products/bike-hire/
3 https://www.hellofresh.com/


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 

FAQs:
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.


2
Retrieved on March 9, 2016 from FASB web page: http://www.fasb.org/jsp/FASB/Page/BridgePage%26cid=1351027207987

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.
__________________



[1]
Retrieved on April 5, 2016 from SEC web page: https://www.sec.gov/News/Speech/Detail/Speech/1370539845772


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

Thursday Dec 17, 2015

Maintaining Enterprise Hierarchies? Surely, that’s not my Responsibility!

By Guest Blogger, Gilles Demarquet 

Does this complaint sound familiar? “We attend meetings where people arrive with “different figures” and end up spending too much time trying to resolve the causes of the discrepancies.”

Often these discrepancies are caused by different hierarchy definitions or different ways to roll up information. And, frequently, it’s a challenge to identify who should be in charge of the definition. In many case, it requires management involvement to define the rules and to get consensus.

In a previous post discussing hybrid environments consisting of both on-premises and cloud deployments, I emphasized that a dedicated approach for managing hierarchy changes is preferable to trying to maintain reference definitions in each application. I concluded that discussion by pointing out that successful deployments require committed people, strong processes, and technology to maintain consistent definitions for the reference data used in on-premises and cloud applications.

In this post, let’s consider who is and who should be involved in the maintenance of reference data in a hybrid implementation. There are two major areas of an organization that lay claim to “ownership” of reference data definitions – the IT department and business users. 




Historically, the IT department took care of maintaining the reference data definitions since only they had access to the tools to maintain them. This approach led to dissatisfaction in the business community as IT often became a bottleneck to timely (and correct) maintenance of hierarchy definitions.

In reality, requests to update hierarchies can be proposed by any number of business users and from a variety of functional areas. For example, finance end users might submit change requests for creating a new account, while operations might request an update in the product references. Each end user might be considered an owner of his or her respective information.

A well-designed solution to hierarchy maintenance in a hybrid environment requires dedication from both of these organizational groups. So the answer to who should be involved is “everybody with a stake in having consistent hierarchy definitions.” That includes IT and business users – if you are a member of either group, then you have a stake in ensuring correct and consistent enterprise hierarchies.

Is it possible to get these groups to work together? How do you resolve potential conflicting requests? This is where the inclusion of strong processes contributes to the successful deployment. I will elaborate on this topic in the next post. Stay tuned and forward any comments that you have.

To learn more about software solutions for maintaining enterprise hierarchies, click here.

Wednesday Dec 02, 2015

Coexistence of Cloud and On-premises Applications: Reference Data – Is there really a Choice?

By Guest Blogger, Gilles Demarquet 

In a previous post, I suggested three important aspects to consider when looking at the coexistence of on-premises and cloud applications. And I promised to expand on the need for consistency when managing and sharing common reference data, like cost center hierarchies or chart of accounts, when using this hybrid approach.

What does that mean?
Many applications use the “same” master/reference data but often with subtle variations or differences. For example, one application may need to roll up cost centers by function, while another may need to summarize cost centers by geographic location.

How do you define the hierarchies used in these applications? How do you ensure that the applications use definitions that consistently describe the common components of the hierarchy, while being flexible enough to include hierarchy components for their unique purposes? How do you coordinate hierarchy changes among these applications to reflect business changes?

Historically, I have seen a couple of approaches:

1. Define the hierarchies directly in each of the applications. 
Of course, this approach means that any hierarchy definition must be replicated (often manually) in every single application. Along with duplication of effort, this introduces the risk associated in ensuring that changes are done completely and consistently. And, if you have both on-premises and cloud environments, this effort may be more challenging because you may have to perform such changes in different kind of environments.

All-in-all, this is NOT the recommended approach.

2. Maintain hierarchy definitions in isolation from the applications. 
The idea is to make the changes once, in a single place, and then propagate them to the various applications that require the use of this reference information.

Experience has shown me that this is the preferred way to proceed. It creates a common vocabulary throughout the organization and contributes to the organization’s ability to maintain a single version of the facts.

What do you need to be able to effectively manage your organization’s hierarchy definitions?
It boils down to three considerations – committed people, strong processes, and technology to maintain consistent definitions for the reference data used in your on-premises and cloud applications. I will expand on each of these considerations in subsequent posts.




To learn more about software solutions for defining and maintaining enterprise hierarchies, click here.


Monday Nov 23, 2015

EPM Innovation Award Winners from Oracle OpenWorld 2015

By Guest Blogger Chris Grouchy 

Each year at Oracle’s annual OpenWorld conference, we unite thousands of customers from around the world who leverage Oracle products and solutions to help them continuously improve their business processes. At Oracle OpenWorld, we showcase the innovation that happens inside these companies and, indeed, this year was no exception.

Last month, we honored some of our most pioneering customers for their outstanding performance improvements and internal innovations in Enterprise Performance Management (EPM). The winners went above and beyond to transform and innovate their EPM business processes using Oracle solutions. This blog post highlights the winners of the 2015 Fusion Middleware EPM Innovation Awards, how they use Oracle solutions to impact their businesses, and why they were recognized.


Amazon
Amazon received one of three 2015 Fusion Middleware EPM Innovation Awards. Before implementing Oracle Hyperion Financial Close Management (FCM), Amazon's financial close process took between 15 and 20 days to complete. With the help of The Hackett Group as their implementation partner, Amazon now reconciles and reports on 16,000 accounts every day of the close process (rather than only once or twice a month) providing much needed visibility and accuracy, and enabling them to close in one hour. In addition, 80% of these accounts are now reconciled automatically without intervention. Amazon was also able to incorporate all key statutory reporting requirements into Oracle Hyperion FCM which enables them to centrally manage the creation of their statutory reporting.

Tampa International Airport 
Oracle also recognized Tampa International Airport with a 2015 Fusion Middleware EPM Innovation Award. This organization successfully implemented a number of analytics solutions designed to revamp their Enterprise Performance Management (EPM) and Business Intelligence (BI) processes. Using these solutions, Tampa International Airport was able to add new flight routes which have generated entirely new sources of revenue for them. In fact, Tampa International Airport has increased its sales win rate by 30% since implementing the solution. They can also properly manage key assets more effectively now-- such as its parking space utilization-- through smarter analytics. In addition, Tampa International Airport is now able to efficiently manage its people and resources, and accurately forecast passenger growth. 

Serta Simmons
Oracle’s third recipient of a 2015 Fusion Middleware EPM Innovation Award is Serta Simmons. This company uses multiple Oracle Enterprise Performance Management products to help manage the financial close process. Serta Simmons has implemented Oracle Hyperion Financial Management, Data Relationship Management, and Essbase with the BI Foundation Suite which, together, have resulted in the company being able to reduce the time it takes to consolidate by 5 days. Managing reporting that used to take days and hours is now reduced to taking only minutes and seconds. Serta Simmons will be implementing Oracle Hyperion Planning in the near future to further its strategic oversight and governance over its financial management processes, and have their sights set on visualization and mobility after that.

We would also like to recognize the following nominees for a 2015 Fusion Middleware Innovation Award for their outstanding achievements: MD Anderson, Wilsonart, HomeStreet Bank, Cheniere Energy, Boeing, UNS Energy, Terumo, and Enel. We wish you continued success with your Oracle solutions and applaud your innovative achievements.

Oracle OpenWorld 2016 is set to take place September 18–22, 2016 in San Francisco, California. To learn more about the event and how you can be part of it, please click here

To learn more about Oracle Enterprise Performance Management solutions, click here.

Friday Oct 02, 2015

OpenWorld 2015 – The Oracle EPM Team Forecast is ‘Cloudy’!

With nearly 50 EPM conference sessions, 7 demo stations and 2 hands-on-labs, plus 35 customers, 15 partners and 26 Oracle staff speaking, Oracle OpenWorld (October 25–29, 2015,  San Francisco) offers more Oracle EPM content and expert experience than any other conference in the world. Whether you already have, or are considering, Oracle EPM On-Premises or Cloud solutions, Oracle OpenWorld is the place to be.

EPM Cloud is in the spotlight this year, with sessions covering existing Oracle EPM Cloud customers, products and strategy, as well as roadmap sessions that set out plans for new offerings coming in the next 12 – 18 months. Attendees will also get the opportunity for a ‘first look’ at some of these new Cloud solutions. In addition, a number of customers will share their experiences and results from using Oracle EPM Cloud solutions.

In addition to Oracle sessions covering On-Premises Oracle EPM Products, there is a focus on customers sharing their experiences with over 10 sessions dedicated to multiple customer case studies.

Do you want to get more product detail or even get your ‘hands on’ Oracle EPM products? We will have experts ready to demonstrate the complete range of both Cloud and On-Premises products, and you can also book to attend a ‘hands-on’ session where you can try out Oracle EPM Cloud solutions first-hand.

So what sessions should you look out for?



  • Oracle EPM General Session with KPMG: Executive Briefing on Oracle’s EPM Strategy and Roadmap [GEN7014] Monday, Oct 26, 4:00 p.m. | Moscone West—2008

  • Customers Present: Oracle Planning and Budgeting Cloud Service [CON9540] Monday, Oct 26, 1:30 p.m. | Moscone West—3018

  • Oracle Fusion Middleware: Meet This Year’s Most Impressive Innovators [CON10374] Tuesday, Oct 27, 4:00 p.m. | YBCA Theater

  • New: Oracle Planning and Budgeting Cloud Service Enterprise Edition [CON9529] Wednesday, Oct 28, 11:00 a.m. | Moscone West—3018

  • What’s New and What’s Coming: Financial Close in the Cloud [CON7031] Wednesday, Oct 28, 11:00 a.m. | Moscone West—3020

  • Product Development Panel Q&A: Oracle Hyperion EPM Applications [CON9524] Wednesday, Oct 28, 12:15 p.m. | Moscone West—3009

Also look out for customers who are speaking including Kraft Heinz, Serta Simmons Bedding, Wilsonart International, Baxters Food Group, Ambarella Corp, Invesco, WestRock Co, Cognizant Technology Solutions Inc, Vodafone, EA, Suntrust Banks, Inc. and many more.

And, don’t forget the Customer Appreciation Event held on Treasure Island on Thursday evening, Oct 29, where you can hear great music from Elton John and Beck. Have fun and learn at Oracle OpenWorld 2015. We look forward to seeing you there!

To find out about everything Oracle EPM and OpenWorld 2015 click here.


Tuesday Sep 08, 2015

How Can the Cost of a Coffee and Croissant Change Your Business?

By Guest Blogger Wayne Heather, Director, Global Business Analytics Group

A recent survey highlighted that 75% of finance professionals are still drowning in spreadsheets - this astounded me. How, in this day and age, can not only midsize, but also billion dollar companies, still justify running their budgets and forecasts on spreadsheets?  This is so fraught with risk that there is even a website dedicated to documenting cases where companies have had to restate financial figures, lost share value and even had to pay massive penalties to regulators through the inappropriate use of spreadsheets.




Budgeting and forecasting are what drive organisations - the actuals just follow. This means the plan and forecast are an organisation’s ‘Guidance system’. So how do organisations expect to hit their targets using the wrong tools for the job? The good news is Cloud is a becoming a game changer in the way organisations are adopting modern planning, budgeting and forecasting solutions.  I would consider the speed of time to value and the low cost of adoption being the two key drivers to make cloud the way forward. If I were responsible for delivering the organisation's plan and forecasts, and I could adopt a modern ‘guidance system’ in the cloud for as little as the cost off a coffee and croissant, per user, per day – I’d be crazy not to! With that in mind, why would you gamble on your organisation's future using something like spreadsheets to plan its future?

To learn more about budgeting and forecasting in the Cloud, click here

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

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