Friday Apr 26, 2013

EPM and ERP - Better Together

I recently had the pleasure to attend and present at the Collaborate 2013 user conference in Denver, Colorado.  This event is run by three of the Oracle user groups – OAUG, IOUG and Quest and attracted over 5000 attendees this year.  The conference included hundreds of sessions covering Oracle Applications, Database, and Middleware which were delivered by Oracle customers, partners and staff members.  The EPM/BI/Data Warehousing track itself had over 130 sessions, most of which were delivered by customers and partners, and which were very-well attended.  Conference attendees and members of the Oracle user groups can see the session list and gain access to the presentation content at this link:  http://collaborate.oaug.org/education/search.

One of the highlights of the conference was the RadiOAUG live radio show that was broadcast from the exhibit hall during the conference.  This was pretty interesting – as two professional radio broadcasters interviewed Oracle executives, customers and partners on a variety of topics that were in focus for the conference.    I was interviewed on the topic of “ERP and EPM – Better Together”. 




During this short interview I talked about the progress Oracle has made in integrating the Hyperion EPM Applications with Oracle E-Business Suite, PeopleSoft, JD Edwards, Fusion and SAP Financials.  I highlighted 3 specific areas of integration that Oracle has built out -- data, metadata, and process integration.  We also discussed how EPM can help with ERP upgrades, through managing metadata like the Chart of Accounts, and providing a consistent planning and reporting environment while the systems are being upgraded on the back end.  I finished by talking about the role our EPM applications can play in helping ERP customers extend their investments and improve their management processes such as Strategy Management, Planning and Forecasting, Financial Close and Reporting as well as Profitability and Cost Management.  Here’s a link to a replay of my RadiOAUG interview:  JohnO'Rourke.mp3.

Here’s a link to all of the RadiOAUG programs that were recorded at Collaborate 2013: http://remote1.businessradiox.com/

For more information about Oracle’s Hyperion EPM Applications please go to www.oracle.com/epm


 

Tuesday Apr 16, 2013

Enrich Your Scorecard with Metadata That Actually Matters

Oracle has released another interesting Podcast – this one is about how Oracle Scorecard and Strategy Management can help you drive behavioural change and improvement at the same time by using metadata that actually matters.

I had the pleasure of interviewing Jacques Vigeant, Product Strategy Director for Oracle Business Intelligence and Enterprise Performance Management and Oracle Scorecard and Strategy Management (or OSSM) about this subject.

After covering the basics about what a scorecard is and how it differs from a BI system or dashboards, we went on to discuss how scorecards should traverse dimensional structures, not just go up and down the hierarchies (like a typical BI system does) but also jump from one hierarchy to another to tie important data together.

Then we got to the heart of the Podcast – metadata that really matters. Jacques told us why accountability is so important – understanding WHO is under or over performing and HOW that performance relates back to the organizational strategy is key to pushing strategy forward. It is difficult to modify behavior if accountability is not included.

Jacques further explained that traditional BI metrics are typically focused around aggregating metadata along a single hierarchy. For example, we all know intuitively that a very high attrition rate in a company can impact the profitability of the company.  Traditional BI metadata focuses on aggregating metadata for HR attrition rates by HR dimensions, like attrition by department or region, but in this example, there is still a chasm between the HR data and financial data. Oracle Scorecard and Strategy Management (OSSM) enables you to draw relationships between your measures that are not necessarily based on aggregate tables or dimensional hierarchies – rather by business insight. You can literally drag and drop scorecard metrics on top of each other to get a better snapshot of what is going on. Jacques provided the following example, “Let’s say my attrition metric has an impact on my employee effectiveness metric, which has an impact on employee productivity, productivity has an impact on cost, and cost has an impact on profitability. You can drag all of these metrics on top of each other to get a whole company understanding of the impact of attrition rate on profitability”. This is new insight about the relationship. Once we understand this relationship, there is now a financial basis for management to ensure that the attrition rate stays within acceptable parameters – which can lead to a change in management behavior.

How does this type of insight help? Jacques explained that OSSM provides a set of metadata that is actually captured by the user using the system, providing new business insight. As more users use the system you are gaining more and more business insight. You get a network effect of new and better business insight as more people use the scorecard tool. This is not the same kind of metadata as traditional metadata that simply describes the existing dimensions.

Near the end of the Podcast Jacques also told us more about how the use of metadata that matters (including accountability) with financial objectives and data and operational metrics and data, can all roll up into the strategy tying everything together. The ability to keep the data current enables users to get a really good picture of the state of the strategy at any time, and which elements are most important to monitor to move the strategy forward. There are really great visual diagrams within OSSM that help you to literally see what is happening.

Jacques provided other interesting examples and useful information about metadata that actually matters in scorecards and how it can help encourage organizational change during the Podcast. I encourage you to listen to the entire interview.

To hear the entire Podcast click here.

For more information about Oracle Scorecard and Strategy Management (OSSM) click here.

Wednesday Apr 10, 2013

Planning at the Speed of Business with Hyperion Planning on Oracle Exalytics

Oracle’s corporate strategy is based on simplifying IT and powering innovation for our customers. As part of that, we recently announced a series of new Oracle In-Memory Applications and released several white papers focusing on how Oracle Engineered Systems can help customers run their business processes without constraints.
In the world of enterprise planning, this includes implementing best practices like driver-based rolling forecasts, “tapping into the wisdom of crowds” in the forecasting process, and aligning financial and operational planning. While customers strive to actually implement these best practices, system constraints often get in the way. In fact, in a study done by Dynamic Markets for Oracle in 2011, a staggering 95% of respondents said they encountered problems with their current planning systems, especially around data, timeliness and analyzing different scenarios.

Deploying Oracle Hyperion Planning on the Oracle Exalytics In-Memory Machine changes the game by delivering some remarkable performance capabilities at lower cost than ever before possible. In-memory technology can dramatically accelerate analytic performance and enable more innovative decision-making. Exalytics drives a new class of smarter and more powerful analytic applications that simply weren’t possible using conventional planning software and generic hardware configurations.

Consider the following results from early customer benchmarks:

+ 5X to 100X faster interactivity, leading to better decisions and accuracy

+ 6X to 10X faster planning cycles

+ 5X reduction in server footprint, resulting in lower TCO

So what does this mean for you? It means you can more feasibly address the new realities of today’s planning environment. You can speed up your planning and forecasting processes, while planning in more detail and for more users across the organization. Moreover, you can extend planning beyond Finance, run more complex planning models, and ultimately increase your forecast accuracy. Improvements in forecast accuracy translate into substantial business value – industry analysts estimate that even a nominal 3% improvement in accuracy could drive as much a 2% gain in profit margins. And isn’t increasing business value what Finance is all about?

For more information about Oracle Hyperion Planning and EPM applications running on Oracle Exalytics, you can find the new whitepapers on oracle.com here:

+ Oracle Exalytics In-Memory Machine: Enterprise Planning without Constraints (PDF)
+ Oracle Hyperion EPM Applications on Oracle Exalytics In-Memory Machine: Performance Management without Constraints (PDF)
+ Management Reporting on Oracle Exalytics In-Memory Machine (PDF)
+ Achieving a Virtual Financial Close with Oracle Exalytics In-Memory Machine (PDF)
You can also listen to the replay of a recent webcast about how Biogen Idec, working with Peloton Group, is leveraging Oracle Exalytics to transform planning processes. Click here to listen to the replay.

Tuesday Apr 02, 2013

Shared Service Costs: Are They Adding or Destroying Company Value?

Recently, Oracle published a very interesting podcast on shared service costs and whether shared services were adding or destroying company value. The information provided was extremely enlightening.

I had the pleasure of interviewing Bart Stoehr, Senior Product Management Director for Oracle Hyperion Profitability and Cost Management (HPCM), and Tom Gargas, a Principal Solutions Manager from Edgewater-Ranzal, an Oracle Partner. Here, I will summarize a few of the key points from the interview. 

According to Bart, shared services are really a concentration of company resources performing like activities, but they are spread out across the organization to service multiple, internal partners at a lower cost and providing higher levels of service. Most organizations have shared services, but often do not understand the value that they add to a company or the value that they can destroy. What are the goals for shared service centers? Bart explained that the goals are “To delight external customers and enhance corporate value”. These centers provide economies of scale and act much like centers of excellence. Examples of shared service centers mentioned by Bart include IT, Human Resources, Finance, Legal Services, Facilities and Communications.

We also discussed why it was so difficult to understand shared service costing. Bart revealed that it was really an aggregation issue. Organizations can see the total cost of a service that is shared, but not necessarily what the business units are consuming and therefore how they relate to products and customers. Understanding how each service is consumed by each part of the business will enable organizations to account for the services and charge back accordingly. But it is not only the financial aspects we are worried about. Understanding the costs of each shared service can help the company see how the costs of the service compare with the value of the service. If a service does not add value, then the company needs to take a hard look at why they are still performing it.

Tom gave us excellent information about a practical implementation approach for shared service costing which includes the FAST characteristics:


Flexibility  (in analysis and cost methods as shared services change)

Audit and Control (ensuring compliance and approved regulatory controls)

Shared Methodology (everyone uses consistent allocation methods which ensures accurate comparisons)

Transparency (details of allocations are provided to all)


Other details in the conversation covered how better understanding shared service costs can lead to organizational and management changes; becoming aligned on allocation methods and improving internal customer service levels. It can lead to excellence in business practices -- finding and exploiting core competencies, partnering with the strategic business units to help them increase their ability to create revenue, and adding value to the organization instead of destroying it through duplication of efforts and misalignment.

Tom indicated that Oracle Hyperion Profitability and Cost Management is an excellent tool for calculating shared service costs, and that these calculations can help in the financial planning process as well.  Shared service centers must plan both for the consumption of services (which services SHOULD they provide, volume of services, cost of services, etc.) and the supply side (workflow, accountability and what actually transpires). Being able to properly calculate service center costs and report against chargebacks by business unit just makes good sense. Being able to calculate and include service charges during budgeting and forecasting cycles makes forecasting more accurate.

“Using Hyperion Profitability and Cost Management with Oracle Hyperion Planning (and possibly Oracle Hyperion Workforce Planning) to manage the supply and consumption of shared services helps ensure that organizations are right-sized”, said Tom.

Bart and Tom convinced me that having well run shared service centers, understanding true shared service costs, and using those costs to plan for the future adds tremendous value to a company. Understanding these costs and using them to make sound business decisions can certainly make the difference between company financial profitability and loss.

To listen to the entire podcast, click here.

For more information about Hyperion Profitability and Cost Management, 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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