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 May 05, 2015

Enterprise Performance Clearly Explained With a Collaborative, Intuitive, Reporting Solution

In today’s Digital Age, the ability for management to clearly explain the quality and sustainability of corporate performance has become more important than ever.  Increasingly, the ability to value and explain the value of intangible assets is becoming a competitive differentiator.  Global and regulatory mandates around narrative reporting are also emerging, with the EU Directive on Non-Financial Reporting and SEC interest in making financial disclosure more effective.  

While there is a clear need for increased commentary and narrative in reporting, most performance reporting processes remain manual and ad-hoc.  The effort is time consuming, lacking process rigor and collaboration.  Errors are made in combining ‘data’ (what) with ‘narrative’ (who, when, why), especially with re-keying data.  In addition, organizations lack the ability to analyze the data to validate the narrative.  The disconnected nature of the process means it is difficult to bring subject matter experts into the process for centralized commentary.  Finally, there are auditability concerns and weak security around supporting “need to know” access to content.

In fact, in a recent survey, 90% of respondents agreed that expanding qualitative commentary in management reporting processes was critical to their organization. Yet, more than half of respondents were not confident in their tools to provide sufficient collaboration to produce that qualitative commentary.   

Oracle Enterprise Performance Reporting Cloud,  the newest offering in Oracle Enterprise Performance Management (EPM) Cloud, helps address these challenges.  It uniquely combines management, narrative and statutory reporting needs in a single, secure, and collaborative solution.  Complete authoring, collaboration, commentary, and report delivery capabilities streamline the process.  You can easily combine system of record data for more accurate reporting.  Secure, role-based auditable access on desktop and mobile devices enables the delivery of faster, meaningful insights to all stakeholders, anytime, anywhere.

Oracle Enterprise Performance Reporting Cloud combines data and narrative, providing a single web interface for report package contributors.  Report package owners define, manage, monitor and interact with content through this interface, while assigned users see only the content applicable to the role they have been assigned. In addition, users can easily take a deeper dive into the data without leaving the application.  Oracle Enterprise Performance Reporting Cloud includes the ability to perform multi-dimensional and other analysis on financial data.

The solution enables business users to participate in the narrative reporting process through the web interface on a variety of devices, including desktops and tablets.  Collaboration throughout the process is key to getting the most accurate picture possible, and helps shrink the time it takes to define, produce and deliver reports.

Increased demand, both internally and externally, for information, plus many data sources can make it challenging to have confidence in the results reported.  Oracle Enterprise Performance Reporting Cloud enables you to easily combine system of record data into your narrative reporting.  Authors can integrate both on-premises and cloud-based EPM and BI data sources directly, as well as integrate data from Oracle and other ERP systems, thereby leveraging existing IT investments.  This helps provide trust and reliability that the numbers and information are accurate.

We have seen tremendous interest from customers looking to “standardize” on a platform for narrative-based performance reporting.  Reporting needs range from quarterly or annual reports for external stakeholders, to internal management and business performance reviews, as well as periodic reports submitted to industry agencies, sustainability reporting, and more.

“We find Oracle Enterprise Performance Reporting Cloud extremely intuitive and easy to use.  The cloud-based nature of this solution, along with strong collaborative and security features, will help streamline the time it takes our clients to produce and deliver reports.”  Neil Sellers, Director Qubix

Stay tuned for more exciting news around customer adoption in the coming months!

To learn more about Oracle Enterprise Performance Reporting Cloud, click here.

Friday Apr 10, 2015

Gartner Positions Oracle as a Leader in CPM Suites

On April 2, Gartner released its 2015 Magic Quadrant for Corporate Performance Management Suites report. In the report, Oracle was recognized as a Market Leader for the ninth consecutive year.

Gartner’s Magic Quadrant reports position vendors within a particular quadrant based on their completeness of vision and ability to execute. In this year’s report, among the market leaders, Oracle is positioned with the highest ability to execute and the strongest in completeness of vision.

Gartner has the following observations about the Corporate Performance Management space this year:

“Each year, Gartner emphasizes the most impactful market factors when considering each vendor's scores. This Magic Quadrant stresses capabilities in three primary areas of market evolution. The first is the cloud. The CPM suite market is shifting toward cloud-based solutions that deliver a shorter time to value and improved ease of use. The ability to provide cloud-based solutions and vendor experience with supporting these solutions factored heavily in this market study. The second primary area of market evolution reflects vendor ability to provide more comprehensive strategic financial planning support. The third primary area of market evolution is analytics.”

Oracle enterprise performance management applications are an integrated, modular suite that supports a broad range of strategic and financial performance management processes and helps organizations drive digital transformation and generate value for the business. 

Click here to learn more:  Report

For more information about Oracle’s Enterprise Performance Management Applications please go to

Wednesday Feb 25, 2015

How EPM and Six Sigma Intersect

There are so many wonderful business tools and methodologies out there that can help us monitor, analyze, set strategy and improve efficiency, etc., but can they all work together? Where do they connect? In this post I will focus on how EPM and Six Sigma intersect.

Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service.  The principals of Six Sigma were originally were created by William Deming in his rebuilding of Japanese manufacturing industry post-WWII by applying statistical methods to measure, test, and improve design, quality and service.  By the 1980s, Six Sigma management techniques had been adopted more broadly for business process improvement and U.S. manufacturers such as Motorola, GE, Honeywell, and Dow competing in the global market.  By the 1990s, Six Sigma transcended manufacturing as Ritz Carlton Hotels applied total quality management and process improvement techniques to delivering five-star luxury service for their guests and were recognized twice with the Malcolm Baldrige National Quality Award by the U.S. Department of Commerce.

The Six Sigma method, when employed properly, aligns your organization and processes to achieve efficiency and a standard quality (whatever the standard should be).

Enterprise Performance Management is focused on

* Setting strategy for the company, including
        - Which products/services should be the focus in order to be competitive
        - Who are the desirable customers
        - Which markets to play in
        - What are the short and longer term goals
* Setting budgets, simulating forecasts
* Monitoring strategy execution
* Adjusting the strategy based on outcomes
* Reporting on the financial outcomes
* Repeat

To be very successful, the two methods should be employed together – EPM setting the desired strategy, Six Sigma providing the optimal processes and products/services to achieve the strategy; Six Sigma reporting on the outputs of the company and EPM reporting on strategic and financial outcomes.

Six Sigma’s job is primarily focused on lean operations, eliminating waste and inefficiencies  from monitoring feedback to knowing what’s working and what’s not, and when to ask what-if, making adjustments  based on that feedback for continuous improvement, etc. – where Enterprise Performance Management has both an internal and external view. It is simply not possible to set your near or long term strategy successfully without having an understanding of the external markets, external  customer sentiment, competitors’ movements and of course R&D on new products and services.

Without getting too philosophical, EPM typically functions assuming products and services are being made well and focuses on setting strategy and executing the strategy. Six Sigma focuses on making the products and services well and assumes that they are the right products and services to be made and delivered. In my opinion, they need to work hand-in-hand to successfully achieve your strategy.

For more information about Oracle Enterprise Performance Management (EPM), click here

Friday Dec 05, 2014

B/E Aerospace Wins Business Analytics Innovation Award!

Todd Renard, Senior Manager - Financial Planning & Analysis for B/E Aerospace was very excited to receive the Oracle Business Analytics Innovation Award at Oracle OpenWorld 2014 for the company's impressive results achieved with Oracle Enterprise Performance Management solutions.

B/E Aerospace is the worldwide leading manufacturer of aircraft passenger cabin interior products for commercial and business jet aircraft. The company, which was growing rapidly through a series of acquisitions, decided to adopt Oracle Enterprise Performance Management solutions to drive innovation and organizational change.

They took a three phased approach:

*PHASE I – Prove the value of the Hyperion solutions to senior management by leveraging the applications to meet company goals
*PHASE II – Build a superior financial end-to-end solution for monthly, quarterly, and annual reporting
*PHASE III – Build scalable daily financial reporting & analysis applications in order to make better decisions faster

In just nine months, the company completed a full-scale implementation that was delivered on time and under budget. As a result, B/E Aerospace has reduced by 80 percent the amount of time it takes to mine data from more than 30 sources. And the business can also acquire new companies and integrate their financials in three to four weeks instead of six months—dramatically speeding assimilation and supporting their acquisition strategy. 

Click here to watch the short video.

Thursday Mar 27, 2014

Customer Lifetime Value: Viewing Customers as an Investment

In this age of customer-centricity, do you really know how to put a value on your customers? I had the pleasure of interviewing Gary Cokins, the founder of Analytics-Based Performance Management - an advisory firm in Raleigh North Carolina - for a Thought Leadership podcast on this topic. We discussed Customer Lifetime Value and how to view customers – not only as profitable or unprofitable to a business – but similar to investments for a business like in an equity stock portfolio. The objective from a shareholder’s view is increase the return on investment from the customers. Gary has written a dozen books on Enterprise Performance Management, Activity-Based Costing, Quality Management and more.

Many of you likely already have a firm grasp on the concepts of measuring and reporting profitability, but may be less familiar the concept of Customer Lifetime Value. Gary defined it for us this way: “Customers and consumers pass through life cycle stages. For example, teenage girls become young adults, then mothers, and so on. At each stage, their consumer needs change. Each type of consumer’s future profit potential needs to be understood based on which stage in their life-cycle they are. The marketing and sales functions have begun exploring what is basically a math equation that calculates Customer Lifetime Value in monetary terms. The equation is intended to measure the future potential level of profitability of a customer or consumer to a supplier.” In essence, Customer Lifetime Value is a forward-looking view of shareholder wealth creation possibilities.

So how are these calculations different from customer profitability calculations, such as from last month or last year? Gary explained that most profitability measures are historical and do not consider the products’ and customers’ prospective profit contribution. Customer Lifetime Value math is trickier, because it also considers the probability of losing some customers (or churn). In addition, the calculation of future streams of revenue and their associated costs, which would include the net present value of discounted cash flows, are taken into consideration. This involves time value of money principles and math that considers both the timing of future cash inflows and outflows, as well as the weighted average cost of capital. A lot to think about when considering Customer Lifetime Value!

Customer classifications come into play as well. Some customers are high maintenance types with substantial demands on a supplier and some are low maintenance - often referred to as demon customers and angel customers., The substantial costs-to-serve incurred below the product gross profit margin line (i.e., channel, marketing, sales, and customer service costs) for high maintenance customers obviously erodes profits. But Gary explained that understanding the amount of the cost-to-serve for each customer is very important. A shift is needed from being product-centric to customer-centric. Suppliers need to understand the unique preferences of and differentiated services for each customer, as well as different distribution channel expenses to service their existing customers, and desirable, prospective customers to acquire.

So how does this affect spend by the suppliers? According to Gary, the key is to spend “the next dollar” on consumers who will most likely generate a relatively higher incremental increase in sales relative to the incremental expense to “lift” those sales. And this analysis should focus only on the impact of interventions with consumers independent of how the consumer might increase their volume of purchases from a supplier simply due to their progression through their life cycle.

I highly recommend listening to the entire podcast as we covered a lot more content in the interview. But the long and short of it is that suppliers must consider Customer Lifetime Value when understanding profitability to get a complete picture and determine which best actions to retain and grow profits from consumers. They must view customers as an investment – the financial return on customer – and not just a short term gain.

To listen to the entire podcast, click here.

To learn about Hyperion Profitability and Cost Management, click here.

Wednesday Jan 22, 2014

Scorecards in the Wild West?

Oscar Pardo, a Solutions Consultant for Oracle, works with Federal, State and Local governments helping them to herd their wild KPIs and establish scorecards to meet US requirements from the President. I had the pleasure of interviewing Oscar during a podcast and he gave some sage advice on what to expect when building scorecards.  He described how Oracle Scorecard and Strategy Management is just the Sheriff you need to help tame your runaway KPIs, and manage your performance.

Oscar began the interview by defining what public sector organizations are trying to accomplish with their business scorecards. Agencies like the Department of Homeland Security, the Veterans Administration, and Health and Human Services are enormous (the size of some of the largest companies in the world!) and need tools to help them understand where they are performing well, and where they are underperforming. Basically, they are trying to accomplish the same things that private sector companies are striving for. Things like:

Transparency to their public
Insight into how well they are running and where they can take actions to improve
Accountability for their funding. With the close scrutiny of funds and cost cutting in budgets, agencies are more accountable than ever for their funding
A better grip or control of what is occurring and what actions they can act on  
A way to monitor those actions and make sure they are working

Oscar also mentioned the most challenging aspects of creating scorecards were:

Developing the right KPIs, and getting consensus. This is like walking around in the Wild West. Everyone wants KPIs for themselves – there is often little organization and few rules around choosing them or deciding how to use them.
Defining the Key Performance Indicators. This takes a lot of time and effort
Locating where the information resides. This takes the longest amount of time. Federal Agencies have a harder time of it, because they have a greater volume of data because they are larger organizations. Information resides in many different systems and is measured at different levels.

Interestingly enough, the most challenging aspects were not software related!

So what part does software play in scorecards? According to Oscar, scorecard software acts like a Sheriff would in the Wild West, upholding the laws. Without the Sheriff enforcing the laws, in this case guidelines, executives will ask for more and more KPIs – then the data collection activity, reporting, and subsequent activities will get out of hand. Here is some advice Oscar shared to help:

Have a single champion, group, or department that is in charge of determining what makes sense to capture and what will have the greatest impact to the organization, because there is a big cost in collecting and maintaining this information. – The champion is like the town Mayor; setting the rules that the Sheriff enforces.
Develop an Office of Strategic Management (or other performance management governing department) or appoint individuals to appropriately define KPIs and objectives. They can then help the Mayor so KPIs can be implemented quickly and uniformly across the organization.
Don’t wait. Too many times I hear customers say, “Let’s wait until next year” or “After the next reorganization or administration”.  With a strong governing agency that is responsible for scorecards, those excuses are no longer valid.  The job of an incoming administration would actually be easier because they have visibility into the organization on Day One.

So what benefits are public sector agencies experiencing with scorecards? Is it worth their while? Oscar told us YES, it is worth their while and here’s why:

Monitoring performance is so much simpler. The Oracle Scorecard and Strategy Management product gets you up and running quickly.   You don’t have to build it, and it comes with the Oracle Business Intelligence Foundation Suite.
Scorecards and Business Intelligence naturally go together. Scorecard initiatives work well with a formal Business Intelligence / Data Warehouse in place.  
Mobile scorecard capabilities.  Having scorecard information available on your mobile device enables you to take this information with you and act upon it without being tied to your desk or office.
Build it with market prevalent Scorecard methodologies like Balanced Scorecard or Six Sigma.  It has an easy to use interface to help agencies define goals and objectives, then facilitate the building of KPIs to track and meet these goals and objectives – all within the same tool the organization uses to do its BI reporting.
Informative visualizations like Contribution Wheels, Strategy Trees, Watch lists, Cause and Effect Maps, and Strategy Maps are available automatically.  

Oscar told us that Oracle made a great decision in making Oracle Scorecard and Strategy Management part of the BI Foundation which marries technology with the scorecard methodology (the Sheriff).  Add the Mayor and other constituents to work with Oracle Scorecard and Strategy Management, and you too can tame YOUR Wild West.

To listen to the entire podcast, click here.
To learn more about Oracle Scorecard and Strategy Management, click here.

Friday Jan 10, 2014

The Deeper Realities of Implementing Shared Service Costing with Hyperion Profitability and Cost Management

You may have heard this one before, but it remains true. Many companies around the world are still fighting to understand what their true costs and profitability are – by region, by customer, by product etc. I caught up with Stuart Croucher, Senior Associate at Marsh & McLennan Companies, and Mike Killeen, Vice President of Technology with Edgewater Ranzal, an Oracle Platinum Consulting partner, to talk about Mercer, a Marsh McLennan Company and their understanding of cost and profitability. Until recently – they too were struggling with this business issue.

Marsh & McLennan Companies are the premier global professional services firms providing advice and solutions for risk management, strategy and human capital management.  They are comprised of four companies:

+ Marsh- a global leader in insurance brokering and risk management  
+ Guy Carpenter- a global leader in risk and reinsurance intermediary services  
+ Oliver Wyman- a global leader in management consulting and
+ Mercer - a global consulting leader in talent, health, retirement, and investments

Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people.  Over the last several years, Marsh & McLennan Companies has seen transformational change with the establishment of a new shared service center to support the finance and information technology functions.  However that did not come easily.

Stuart shared with our listeners that two years ago, Mercer’s senior leadership changed overnight. In the new CEO’s  first town hall to the company, he spoke of the urgent need for Profit and Loss statements  by line of business and by country level.  He could not believe if he asked a business leader in Brazil what his profit was, that he didn’t know the answer.

How were they measuring cost? Previously, all Mercer measurements had been performed on a contribution margin basis; this simply meant that each LOB was judged on how much it contributed to Mercer’s central costs. Function costs were all held centrally and not allocated to the businesses. This was simply unacceptable to the new leadership team because it did not allow them to understand which businesses and countries were truly profitable.

As you might expect, under new management, finance was given the immediate task of implementing business/country level profit and loss statements, as the new CEO had made it one of his top priorities. This meant developing a rapid (like yesterday) solution using Excel. Eventually, with extraordinary effort, they were able to build and deliver a successful solution using many, extremely large MicroSoft Excel workbooks and MicroSoft Access - but they ran into all the usual Excel model based issues, after go live: 

+ It was very difficult to answer questions from the business -  in other words,  why did I get this allocation 
+ It was impossible to keep track of changes to the model 
+ It was difficult to re run the model for a different scenario --  for example,  running it for Budget and now wanting to run it for Prior Year Restated.

What Mercer wanted for the future was to deliver an allocation solution that combined the Oracle Hyperion Planning and Hyperion Profitability and Cost Management approach providing a platform for future growth and the ability to easily run multiple versions. Also key was low IT involvement when running the model -- they wanted Finance to completely own the day-to-day running of the model.

Mike further explained that Marsh & McLennan Companies needed to put together a new shared service center to support the controllership and Financial Planning & Administration within all of their operating companies. A key component of that shared service center was the selection and standardization of a performance management platform to create a consistent user experience for their users, and to lower the firm’s Total Cost of Ownership. For this reason, Hyperion Profitability and Cost Management was evaluated and selected as a tool that could meet the needs of this solution for the F-A-S-T requirements - specifically Flexibility, Audit and Control, Shared Methodology, and Transparency. For most of Mike’s clients, the F & T tend to be the most important.

The flexibility of Hyperion Profitability and Cost Management (HPCM) was critical to Mercer in the development process, because it allowed the business users to see the impact of an allocation methodology or attribution change. Mercer couldn’t have done that with a traditional “take the requirements and build it via a calc script” type approach. Additionally, the traceabilty maps in HPCM were helpful in getting sign off on the allocations, and additionally answering questions that came back from the Planners regarding where a charge came from. Finally, by moving the older model in Excel to an Oracle EPM packaged application, they were able to offer the audit and control needed to ensure confidence in the numbers, and additionally, provide an ability to run the models via shared methodologies for budgets, actuals, and forecast scenarios. Mercer took advantage of features that allowed them to run 2013 budget data through 2012 methodologies and 2013 methodologies, and seeing the impact of methodology change alone on results.

It became apparent quickly that there were deeper realities of implementing Shared Service costing with Hyperion Profitability and Cost Management. To hear more, click here to listen to the entire podcast.

To learn more about Hyperion Profitability and Cost Management, click here.

Wednesday Jan 08, 2014

Why Are My Numbers Different From Yours?

Happy New Year!

Organizations spend way too much time arguing about whose numbers are right, where they came from, and what they mean, rather than spending time discussing what to do about them.  I had the pleasure of interviewing book author and consultant Ron Dimon, Enterprise Performance Management Advisory Services Partner at CheckPoint Consulting – an Oracle Platinum Partner – during a Podcast, and he provided some interesting insights into this topic.

Ron and I have been involved in Performance Management in one way or another since about 1999 and it amazes me that organizations today still rely so much on spreadsheets to do their planning and forecasting, profitability analysis, and even to record and report their financial and operational results.  But, I am hopeful, as many companies and institutions now embrace the tools and processes of Enterprise Performance Management (EPM), that this will change, turning performance management into a discipline and a competitive advantage.To listen to the entire Podcast, click here.

I asked Ron to give his point of view on why people are still uttering “Why are my numbers different from yours?” With all the technology and systems we have now, why is this still an issue for many organizations?  He told our audience that he believes much of the issue can be attributed to spreadsheets. “While great for some things, they were never meant to be collaborative, controlled, enterprise-wide consolidation and reporting engines or reporting systems.  We have grown to rely on them, because they are pervasive and so easy to set up.”  Ron explained that it is relatively easy to whip up a customer profitability spreadsheet, for example, in less than an hour. You just need to collect the sales and expense numbers, take a stab at indirect costs and voila!  The problem, he suggested, starts after the report is set up and we need to share it, compare actuals to forecast, or include some historical trend data.  Ron explained that, “When Finance gets a look at the spreadsheet, they have to reverse engineer it and will probably quickly find that my basis for allocating expenses is wrong, or I haven’t taken into account commission splits, or I’m not including a foreign subsidiary of the customer in the sales results…the list goes on and on.”

So how can this be corrected? Ron talked about a way of still using Excel to create easy, on-the-fly reports – but rather, using Excel directly connected to the central repository of data to ensure that everyone creating reports is starting from the same set of data. The Oracle solution he has used for this is called Oracle Hyperion SmartView for Office and is part of the Oracle EPM System.  Because the spreadsheet is essentially connected to the underlying central repository of the EPM system, there is less time spent arguing about why numbers are different.

So is Oracle Hyperion SmartView for Office the answer? Does it solve the data problem all by itself? Ron explained to our audience that SmartView is the window to all that data; it’s one way to access it. But how and when the data gets into the central repository, and how it’s organized and transformed once it gets there requires an Enterprise Performance Management System (EPM). Oracle’s EPM system is both a collection of tools and a group of processes that govern how your data, especially financial data, is recorded, reported and used. 

Ron explained that an EPM profitability application, like Oracle Hyperion Profitability and Cost Management (HPCM), is a much more disciplined way to truly determine customer profitability – unlike the spreadsheet example mentioned previously. Instead of the finance person making up formulas, allocations, and deciding what is included in that customer number or not, HPCM does it for you.  So now you CAN spend more time on what do to with that customer: pay more attention, adjust prices, offer new services (or even fire them!) – and much less time arguing about why my numbers are different than yours.

To listen to the entire Podcast, click here.
To learn more about Oracle’s Enterprise Performance Management solution click here, and to learn more about HPCM, click here.

Friday Dec 20, 2013

Déjà Vu? Oracle EPM in 2013

As the year winds down, I wanted to share some of the highlights from EPM in 2013 and give a sneak peak about where we’re going next year. 2013 was a busy year with new product developments, new research studies, as well as customer events like Oracle OpenWorld. Let’s look back at some of these happenings and their associated blog posts.

New Product Developments 

Early in 2013, we announced a new release of Oracle Enterprise Performance Management with new integrations and product capabilities and updates to user experience that help companies to Unlock Business Potential – by unlocking business potential, companies are able to drive to the desired business outcomes of Aligned Objectives, Accurate Forecasts, Confident Close and a more Accountable Enterprise.

We also released new product modules, including Oracle Hyperion Tax Provision to help with aligning tax information and financial reporting, and Oracle Data Relationship Governance for improving financial master data governance and managing change.  In addition, we certified Oracle Hyperion Planning and Oracle Hyperion Profitability and Cost Management on Oracle Exalytics In-Memory Machine to help organizations Plan at the Speed of Business.  

For the sixth consecutive year, Gartner recognized Oracle as a Market Leader in its 2013 Magic Quadrant for Corporate Performance Management Suites report.  In this year’s report, among the market leaders, Oracle is positioned with the highest ability to execute and the strongest in completeness of vision.

New  Research

We conducted several interesting research studies in 2013.  Over the past several years, as we have gone through and emerged from the Great Recession, the role of the CFO has transitioned to one of catalyst for change.  New technologies and shifts in skill sets are also contributing to this changing role.  To understand these issues more deeply, we partnered with Accenture and released new research about the CFO’s changing role from financial overseer to corporate strategist and change agent.

To learn more about how Oracle customers perform Business Analytics processes (which includes Enterprise Performance Management, Business Intelligence and more), we launched the Oracle Business Analytics Customer Value Index (CVI) program in 2011, through which we collect valuable business process information from our customers.  The EPM Blog featured some compelling results from the CVI around Enterprise Planning, Budgeting and Forecasting Processes.

Customer Events and Videos 

One of the highlights of the year was Oracle OpenWorld, and winning the America’s Cup during that week certainly added to the excitement!  The Business Analytics program this year was our strongest ever, with over 200 EPM, BI, Analytics, Big Data and Exalytics sessions delivered by Oracle, our customers and partners.   We had the opportunity to catch up with a number of these customers and partners after their sessions, and you can view the interviews here

In one of our blogs about Scorecards, we featured forward-looking DC Courts and their process for managing strategy and KPIs.  DC Courts are making some great strides in setting strategy and executing on it, and are really setting the bar for other US Courts. 
On the topic of Profitability and Cost Management, we interviewed Ida Quamina of Oracle about the great strides being made in mastering the cost of Higher Education, and how these institutions can now address the issues of low or no visibility into individual programs, degrees and course costs, or the cost per student.
Next up – Cloud and Mobile!

As we head into 2014, there are many exciting developments in store, and you can expect to see us talk a lot about Cloud and Mobile technologies next year. Our blog called, “Taking your Business Scorecard Golfing” is just a preview.  

Wishing you a very Happy Holiday and New Year!

Wednesday Nov 20, 2013

Alignment of Ever Shrinking Budgets in Federal, State and Local Government

According to Josh Kahn, the Federal, State and Local government agencies are facing austerity, uncertainty and the need for accountability and transparency now more than ever. Josh Kahn, a Solution Specialist  Director at Oracle, and James Antisdel, Manager at KPMG (formerly with Deloitte Consulting), joined me for a podcast to discuss using Oracle Hyperion Profitability and Cost Management to align the ever shrinking budgets in government. Both James and Josh have a deep knowledge of and practical experience with the US Public Sector, particularly in government agencies.

We started off talking about the issues that government agencies are currently facing. Josh indicated that the agencies are facing many similar issues as the private sector in that transparency and efficiency are needed to help combat uncertainty and austerity. He felt that creating and using shared service centers enables organizations to provide a common product or service to a number of other organizations, thus increases efficiency and reducing effort. But without robust cost models to capture, analyze, and report on costs, it is difficult to measure and account for the new efficiencies, and equally difficult to explain the shared service charges.

So, I asked Josh what the barriers or limitations were to accomplishing this challenge. Josh explained that there are really three categories of limitations:

1) Legacy cost models are generally spreadsheet based. They rely on highly manual processes, lack transparency, lack a robust reporting solution and generally make analysis very difficult.
2) Data governance and quality. Many solutions rely on data that is sourced from disparate systems and commonly rely on data requests that require labor intensive processes and error prone manual transformation.
3) Cost models are generally kept simple.  Simple models limit analysis such as transaction level costing and commonly require a delay in producing results -- reducing the usefulness of data because it is likely old and irrelevant due to the delay

According to Josh, a good enterprise-level costing system like Hyperion Profitability and Cost Management can address all three of these limitations.

Next, James and I discussed how he had seen Hyperion Profitability and Cost Management used by his Federal, State and Local government customers. He told our listeners that he had seen it used for:

+ Cost allocations
+ Customer bill calculation/generation
+ Service center performance management
+ Assisting with planning and budgeting
+ Financial and operational analysis
+ Decision making

I was very impressed with the versatility of this application.

Digging deeper into a costing model for government, I asked James to tell us what an agency could hope to gain from implementing a costing system. James told our audience  that “development and management of the cost model can provide greater insight into the full cost of services provided to an agency’s customers, and can enable more informed decisions aimed at optimizing resources, increasing value, improving performance, gaining efficiencies, and reducing costs."  Furthermore he explained that Deloitte’s customers, armed with this new information, can begin taking next steps to improve business processes and work to refine their model to gain more insight into particular areas that offer opportunities for savings and improvements.  As a result, an agency will have the capability to accurately identify current and projected costs, formulate and justify budgets, and support operational process improvement and managerial decision making.

James emphasized that an enterprise costing solution can enable an agency to more readily pinpoint cost variances at a detailed-level and be far more responsive to requests for information from customers and other stakeholders.  It is a powerful analytical tool that can be used to support an agency in becoming transparent, efficient, and a Shared Services Center of Excellence.

So it seems that a powerful, versatile,  enterprise-level costing system can go a long way in helping to align the ever shrinking budgets in Federal, State and Local Government.

To listen to the entire podcast, click here
To learn more about Hyperion Profitability and Cost Management solution, click here

Monday Oct 28, 2013

Taking Your Business Scorecard Golfing

Our workplace world is definitely changing. Not only are we taking work home, but we are working during odd hours in some very strange places.  I had the pleasure of interviewing Jacques Vigeant, Product Strategy Manager for Oracle Business Intelligence and Enterprise Performance Management, on a Podcast, and he enlightened me about how our mobile devices and business scorecards are enabling us to be more accountable and keep a watchful eye on business – even while on the golf course.

Business scorecards have been around for many years - so I asked Jacques if he felt they had changed significantly due to technology. His answer was, “Yes, and no.”  Jacques agreed that scorecard enthusiasts are still passionate about executing the company strategy and monitoring Key Performance Indicators (KPIs), but scorecards and Business Intelligence (BI) as a whole have changed.  He explained that five to six years ago, people did BI work at the office and, for the most part, disconnected from their computer and workplace when they went home – with the exception of checking email and making a phone call or two. But now, that is no longer the case. People are virtually always connected with work and, more importantly, expect their BI and scorecards to be ‘always on,’ regardless of whether they are at their desk or somewhere else.

Basically, the BI paradigm has changed from a 'pull' model, where employees are at their desks querying or pulling information from the system, to a 'push' model where employees expect their BI and scorecard systems to reach out (or push information) to them when there is something of note to learn or something on which they need to take action.

I found this very interesting. However mobile devices do have their limitations with respect to screen sizes – does it really make sense to look at your strategy/scorecard on tiny devices? What kind of scorecard activities can you really expect to be able to do? Jacques’ answer was very logical. “When you think of a scorecard, it is really comprised of an organization of KPIs that are aligned with the strategic objectives of your company. KPIs are the heart of how you will execute your strategy. So, if you decompose that a little more, each KPI is well defined with the thresholds that you should keep an eye on and who is responsible for them. When we talk about scorecarding on a phone, we aren’t talking about surfing the strategy and exploring the strategy map like we do on the desktop. In a scorecarding context, we use the phone more as an alerting mechanism or simple monitoring device for your KPIs.”

Jacques gave a great example of an inventory manager who took part of an afternoon off to go golfing before winter finally hit, and while on the front nine holes, his phone vibrated. His scorecard was alerting him that the inventory levels for one of the products was below some threshold that he had set.  From his phone, he had set up three options within Oracle Scorecard and Strategy Management (OSSM) for this type of situation:

  1. Contact the warehouse manager directly by phone and work it out (standard phone function)
  2. Tap/hold the KPI and add an annotation to the KPI in OSSM using the dictation capabilities of the phone and deal with it more fully when he gets back to the office
  3. Tap/hold the KPI and invoke a business process from OSSM to transfer product from another warehouse with higher stock levels to the one that needs it 

Being on a phone should still give you options to quickly deal with situations as needed, but mobile phones are not designed for nor should try to replicate the full desktop experience.

We covered other interesting subjects in the interview, including how Oracle is keeping pace with mobile innovation and new devices such as Google Glasses, Galaxy Gear, Pebble Watches and more, and how Oracle is handling mobile security– which is great news for our mobile workforce.

To listen to the entire Podcast, click here.
To learn more about Oracle Scorecard and Strategy Management, click here.

Thursday Oct 03, 2013

Practical Uses of Business Scorecards, from Company-Wide to Process Specific

Scorecards for business have been around for many years, but implementing them successfully and extracting big benefits from them is still elusive for many organizations. Recently, Greg Rippstein, Senior Director of Product Management for Oracle Business Intelligence Applications, gave me some insight on practical approaches to business scorecards during a podcast interview.

With all the scorecard consultants and scorecard vendors that exist today, why are so many companies still having such mixed results with their implementations?  Greg shared his opinion on this question saying,  “When it comes to Scorecarding, I think companies tend to focus on the theoretical and not the practical. They read books like “The Balanced Scorecard” by Kaplan and Norton and then try to implement the exact framework.”  Greg explained that one single approach simply will not work for ALL organizations everywhere – especially given the diverse nature of them all. He felt that organizations need to focus on pain points and organize their scorecards around KPIs that measure the pain so they can set achievable targets to reduce the pain. He further explained that it’s not that the Balanced Scorecard approach is a bad approach, it’s just an approach that most companies need to evolve into or strive towards rather than begin with.

His advice was to start off small and grow your knowledge.  Create “practical scorecards” that help a department or process in your company improve and show success. “Success breeds success, so when you show the organization that one area is experiencing success, the other areas will pay attention,” Greg said. Others will seek out the knowledge that was gained and then use that to duplicate their own success.

Some of the “practical scorecards” that Greg has seen implemented include:

+ Company-wide scorecards – These are scorecards that incorporate all the major functions of a company and are driven by the corporate strategy
+ Industry scorecards – These usually focus on KPIs that are industry specific (like Healthcare, Consumer Goods, or Retail) and typically incorporate industry benchmarks like hospital bed turnover or store sales per square foot (for a retailer).
+ Functional Scorecards – These are scorecards that focus on a specific business function or department within a company such as purchasing or shipping.
+ Process Scorecards – These are focused on critical processes within a company, like production in a manufacturing facility or, more broadly, a company’s supply chain.

Greg gave the podcast audience a good example of a process scorecard – in this case, a supply chain scorecard.  A  supply chain process might include a company ordering parts from a supplier, the supplier shipping the parts, the customer receiving the parts, consuming and selling the parts, and in some cases returning the parts.  This process is also sometimes referred to as “Source, Make, Deliver and Return.”  An industry standard representation of a supply chain model called SCOR (supply chain operations reference model) has been established by the Supply Chain Council. The SCOR model includes a series of KPIs that make up a supply chain scorecard. The KPIs are grouped into five major groups: Reliability, Responsiveness, Flexibility, Costs and Management. Reliability, for example, contains the KPI “Perfect Order Fulfillment,” which measures the percentage of time that a customer’s order can be delivered with no changes, no backlog, and no returns, while Responsiveness uses “Order Fulfillment Cycle Time” to measure how quickly the supply chain can deliver the goods. 

A company would set up a supply chain scorecard with these KPIs and set targets against each. The targets might be internally set or based on industry benchmarks. The entire scorecard allows the company to monitor and improve key aspects of their supply chain.

Finally, Greg talked about the need for good software to make it all work. Greg told our audience that Oracle Scorecard and Strategy Management is an application that gives Oracle customers a wide range of options and flexibility to implement any type of scorecard.

To listen to the entire podcast, click here.

To learn more about Oracle Scorecard and Strategy Management, click here.

Tuesday Sep 10, 2013

Mastering the Cost of Higher Education with Hyperion Profitability and Cost Management

There is a perfect storm going on in the world of Higher Education right now. Over the last few years, the cost of higher education has been outpacing the consumer price index. To learn more about this important and disturbing phenomenon, I had the pleasure of interviewing Ida Quamina, Principal Solutions Consultant for EPM products at Oracle for our AppCast Series. She has a deep knowledge of and practical experience with Oracle’s Education and Research customers.

Parents are starting to ask how and why this perfect storm is happening. Well, both US college endowments and state appropriations are decreasing, while university expenses and enrollments are increasing. Yet universities are being forced to keep tuition costs flat. Ida also told us that Federal and State Governments are now starting to take a look at costs at institutions. President Obama, during his State of the Union address in February 2013, asked Congress to include affordability and value as a factor in determining which colleges receive federal aid. States are starting to require cost containment measures as part of their performance based funding models.

So how can Higher Education intuitions better understand and manage these issues? Ida told our listeners that Higher Education institutions already have good visibility into total operational costs and total revenue collected, but little or no visibility into individual program, degree and course costs, or the cost per student. Currently, colleges and universities have not implemented activity-based costing which is used in many commercial enterprises. Activity-based costing goes beyond the traditional allocation of overhead and provides institutions with better insight into information needed to make strategic decisions about cost containment and allocation of resources. With governing and regulatory bodies currently recommending (and likely soon requiring) this type of analysis and reporting, it is becoming critical for higher education institutions to have this type of insight for both long term and short term planning and reporting.

So which institutional processes benefit the most from understanding costs more? Ida explained that budget and spending decisions need to be based on data and not assumptions. Financial ERP systems and the current structure of institutions’ charts of accounts are not set up to support the type of analysis needed. Using activity-based cost and revenue modeling enables academic institutions to answer crucial questions and, more importantly, analyze many business scenarios to determine their best courses of action.

Ida further explained that for this type of process to be successful, collaboration between the academic and administrative teams in institutions is foundational and critical. These two groups need to start the discussion about how, and to what level, costs and revenues are to be allocated and which drivers are going to be used. This is the starting point to begin a good model. It is an iterative process and institutions will build upon this and create additional model scenarios as economic and academic conditions change.

So how can Oracle help? Ida told us that to survive, Higher Education institutions need to either make programs financial sustainable, or ensure there are other programs that have enough surplus to make up for the deficit of programs. Oracle can help with:

+ Transparency that enables institutions to ensure resources are aligned correctly based on actual measurable information
+ Understanding the true cost to implement new programs and the ability to make pricing decisions based on those costs
+ A thorough understanding of costs at a more granular level and the root cause of the costs. This information enables institutions to make informed decisions
+ Creating accountability that enables departments to understand the resources they consume as it relates to the revenue that they generating
+  Addressing concerns and questions from various stakeholders, e.g. CFO, Provost, Board of Trustees, State and other governing boards and accreditation bodies.

To stave off this perfect storm, it is imperative that our institutions now master the cost of Higher Education.

To listen to the entire interview, click here
To learn more about Oracle Hyperion Profitability and Cost Management in Higher Education click here
To learn more about Oracle Hyperion Profitability and Cost Management, click here

Tuesday Sep 03, 2013

Align Cost with Revenue for Profitable Growth in Diversified Industries

Historically, growing revenue typically equated to increased profitability for most organizations, but in this economy this statement is no longer true. On this subject, I was very fortunate to interview Ralph Canter, Managing Director, and part of KPMG’s Diversified Industries Practice (an Oracle Platinum Partner) and Bart Stoehr, Senior Director of Product Management for Oracle in an Oracle AppCast podcast. 

According to Ralph, diversified industries – which includes global manufacturing – has had a roller coaster ride in terms of profitability over the last 20 years. Post 2008, many experienced slowed, stalled or even reversed growth so much so that companies had to focus on how to stop the bleeding and reduce/control costs rather than focusing on increasing revenue. Growth for growth’s sake was no longer sustainable so companies had to adopt what KPMG calls ‘profitable growth’. This is growth with a lens or focus on serving many market segments and many demands on product, supply chain, and customer satisfaction.

I asked Ralph to tell us about the biggest hurdles to profitable growth and being able to measure it. He told us, “The biggest hurdle has been that the game has kind of changed. Systems have been developed over time to support the measurement of how growth used to be – which was more regional and stable and long term – and you had a timeframe in which to build the system to address a certain growth period. Today, in a global environment, the global view is segmented by customer, by product, by channel, by region, by market, by sales channel – all kinds of dimensions. And what’s happened since 2008 is that the revenue picture has become a very, very sophisticated analysis that is very aligned to tell you where you’re growing. What’s been left behind is the cost view of that growth. So while I have really good aligned OLAP cubes analyzing my revenue growth, I do not have an associated, detailed cost model that can align with that revenue to create a profitability analysis of the revenue growth view. What we see is a limitation in the maturity of cost to keep up with the maturity of how you are analyzing your revenue and your profitable growth.”

So what became clear was, in this economy, profitability is no longer as simple as subtracting cost from revenue!

Once we were clear on the issues, I asked Ralph to tell us more about how Oracle Hyperion Profitability and Cost Management and KPMG can help organizations with profitable growth.  Ralph told our listeners, “Our point of view starts with revenue and not cost. We help customers understand how they want to measure their growth and then help them design their cost information ‘content’ to make sure we can answer the profitable growth question. In most cases this means reconstructing a cost view that matches up to the profitable growth questions. This is where the functionality of Hyperion Profitability and Cost management is leveraged to not only support the reconstruction, but also keep cost and revenue aligned and reportable”.

I asked Bart if he could talk about some Oracle Customers that are practicing profitable growth and he specifically mentioned Leggett and Platt (invented the bed spring in 1885) who are now quantifying the cost of delivering special services to their customers, assessing the value of those services, improving product portfolio management, attacking cost reduction opportunities and streamlining operations (to mention a few objectives). Bart told our listeners that Leggett and Platt are using a combination of Oracle Hyperion Planning and Hyperion Profitability and Cost Management to push GL costs to align them with revenues by pooling the costs, moving them to activities where they are consumed by the various products, customers and customer segments, and then driving them down based on product consumption characteristics. Leggett and Platt are using some of the costs derived by Oracle Hyperion Profitability and Cost Management to perform driver based planning in Hyperion  Planning - the power of the two working together are simply unmatched.

To help the listeners understand how Hyperion Profitability and Cost Management specifically helps with profitable growth, Bart and Ralph emphasized some key features used for this purpose. There are many of them, but their favorites are:

+ Any costing method or combination of methods that represent an organization well can be used. Nothing is prescribed but practicality is recommended
+The traceability map enables you to understand where costs come from, how they are consumed and where they go. This is important to help all members of the value chain understand what is going on
+The pre-configured ability to deal with excess capacity (Provides fully loaded view and incremental views of cost to help support current and future decision making)

There is much more to the interview, but it was certainly clear that many kinds of diversified and product-focused industries can benefit from using this method of growing profitably, and Ralph and Bart provided very interesting insight into the practicalities of growing profitably by aligning cost with revenue.

To listen to the entire podcast, click here.

For more information about Oracle Hyperion 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.


« October 2015