Hyperion EPM 101:

Fast Track Your

Financial Close

Presented by: Timothy J. Simkiss, CPA

October 18, 2013

Agenda

BIZTECH SUMMARY

?

THE TYPICAL FINANCIAL CLOSE CYCLE

BEST PRACTICES OF WORLD CLASS FINANCE DEPARTMENTS

ORACLE HYPERION EPM TOOLS

1

2

3

4

Q & A SESSION 5

BIZTECH

SUMMARY

PROFESSIONAL SERVICES FIRM

– Professional Services firm focused on Oracle applications and technology

– Oracle Platinum Partner – Highest Level of Certification

– Over 400 successful Oracle implementations over the past 15 years

ORACLE SOLUTIONS

• Oracle Applications

• Oracle Technology

• Business Intelligence

• Hyperion EPM

• Managed Services

INDUSTRIES

• Financial

• Professional

• Business Services

• Communications

• Manufacturing

• Distribution

• Public Sector

• Government

• Healthcare

• Life Sciences

About BizTech

www.biztech.com

SIMKISS

– Former Corporate Controller of a

Multi-million Dollar Organization

– Director of Accounting/FP&A at Several

Companies

– 15 years of Financial & Operational

Accounting Experience

timsimkiss@biztech.com 267-454-3784

TIMOTHY

Hyperion Practice Lead,

CPA

THE TYPICAL

FINANCIAL CLOSE

CYCLE

Financial Close Process

Corporate

Financial

Statements

Corporate

Consolidation

General Ledger System

(Division / Affiliate)

Manual

Entries

Personal

Computing

Software

Enterprise

or Local

Transactional

Systems

Source Data

Reports

Reports

Reports

Typical Budgeting Model

Excel Templates Are Prepped

Templates Instructions Are

Mailed

Templates Submitted to

FPA

Data is Consolidated, Reviewed &

Audited

FPA team Department

Heads

Department

Heads FPA team

Budget is submitted, reviewed & process begins again.

9

1. Complicated Consolidations

• Reviewing, matching, reconciling and accounting for multi-entity, multi-currency intercompany transactions

2. Stringent Regulations

• GAAP (Generally Accepted Accounting Standards)

• IFRS (International Financial Accounting Standards)

3. Heightened Reporting Crunch

• Shrinking Deadlines

• XBRL Requirements

4. Unreliable Spreadsheets

• Error Prone

• Labor Intensive

5. Disconnected Departments

TOP FINANCIAL CLOSE ISSUES

Consolidation At-a-Glance

Collect Data Calculate & Adjust Report

• Gather from multiple & disparate applications

• Store data in a centralized repository

• Generate financial statements, managerial reports, and perform ad hoc analysis

• Apply FASB and IFRS consolidation rules

• Perform currency translation & aggregation

Different Accounting Standards • Most US companies with international subsidiaries are required to account for this activity per the standards of GAAP (Generally Accepted Accounting Standards). • However, International Financial Accounting Standards (IFRS) will be required adoption by US Companies by 2014 unless the SEC decides to delay implementation again (they just might!)

Similarities

Approach(Some

Examples)

IFRS US

GAAP

Revenue

Recognition

Fair Market

(e.g. AR or

Inventory

Valuation)

Detailed

Disclosure

Segment

Reporting

Chart of

Accounts Not

Mandated

Distinction

Between Tax

and External

Reporting

Differences

Approach(Some Examples)

IFRS US

GAAP

Fair Market

Revaluation

Fixed Assets

& Investments

Only

Certain

Fixed

Assets

Extraordinary

Items

None Rare

Consolidation Control 2 Models

Joint Ventures Proportional

OK

Only

Equity

“Development” Capitalized Expensed

Fixed Assets Components Unitary

Leasing Financing Cap vs.

Op

Inventory No LIFO LIFO OK

Impairment 1 Step,

Reversible

2 Step,

No

Reversal

The Reporting Crunch

UNRELIABLE

SPREADSHEETS

z 80%

STILL USE SPREADSHEETS

• Error Prone

• Non-Collaborative

• Maintenance Intensive

• Fragile, Easy to Break

• Little Centralized Control

• Poor Data Integrity

(Audit trails)

• Unmanageable

consolidation

• Lack of Security

Issues that Arise:

DISCONNECTED

PROCESSES

Time – cycles take too long, missed opportunities and obsolete plans

Quality – data integrity, lack of standardization and communication

Flexibility – lack of responsiveness to changes

Cost – many wasted resources, questionable benefits

FP&A

Senior Management

Annual Plan & Forecast

Revenue & Cost Models

M&A

Departmental Plans

Headcount Plans

Treasury Plans

Long-Term Planning

Issues that Arise:

Common Financial Dept vs. World Class Depts.

Processes focused on analysis & value addition

Planning is a communication

Company plan is owned used by all operating mgmt

Continuous planning is responsive to market

Mgmt is empowered & performs optimally

Strategic initiatives funded separately for day-to-day business expenses

World Class Depts. Common Depts.

Time consumed by planning

Future plans, unclear goals and mission are not aligned

“Finance” owns the plan

Process and cycle not linked to the business

Spreadsheets and data stores are fragmented

Metrics are not reflective of strategies Managers mange around plans

No funding in resource plan for strategic initiatives

BEST PRACTICES

OF WORLD CLASS

FINANCE DEPARTMENTS

• World-class finance organizations operate at nearly half the annual cost of typical

companies and have less than half the staff.

• At the same time, these finance organizations are dramatically more effective than

their peers, are better at strategic business support, and drive improved bottom line

results for their companies while reducing close time by 50 percent!

• World-class finance organizations have reduced costs markedly (40%), while the

average finance organization has achieved only a cost19% reduction over the past 8

years. The efficiency gap translates into an annual cost savings of nearly $140

million for a typical Global 1000 company (with $26.38 billion in revenue).

Source: The Hackett Group, 2010 survey

Run models based on key strategies

Set targets

Seed targets to annual operating plan

Start annual process

Update strategic plan with latest forecast

Evaluate resource and capital requirements

Long-term strategic plan

Annual budget / plan

Validate operational feasibility

Evaluate workforce and capital

Monthly / rolling

forecast

Update long-term

strategic plan

World Class Enterprise Planning

Assess and Manage Risk

Validate operational feasibility to financial plan

Update forecast with latest budget and actuals

A world class budget process utilizing the right tools can take a few weeks. However, at many companies, the budget process can take months.

1. Make full use of automation and utilize key metrics to gauge

performance

2. Establish deadlines and use on-line checklists

3. Delegate responsibilities where possible

4. Prepare results and ensure visibility management

5. Eliminate redundancies and paper chasing (outsourcing, shared

services, third party providers)

6. Close sub-ledgers on day one (i.e. a soft close on payables,

receivables and fixed assets)

7. Post recurring journal entries prior to month end (day -1)

8. Reforecast monthly and provide realistic updates

9. Encourage suggestions and improvements to existing processes

10.Document policies and procedures

TOP 10 BEST PRACTICES OF WORLD CLASS FINANCE DEPARTMENTS

Sample KPI’s

Sample Checklist Client name Summary Month End Close Schedule-

Close Activity/Tasks # March-13 Day 1 Day 2 Day 3 Day 4 Day 5 Day 6 Day 7 Day 8 Day 9 Day 10

Process/Module Weekly Activities1 Enter AP Invoices daily

2 Create Accounting daily/weekly

3 Validate AP Data

4 Initiate and complete cash transactions

5 Conduct weekly conf call with Controllers

6 Weekly results due by 9am Monday morning

Process/Module Close AP1 Complete All Transactions for the Period Being Closed 4/1/13

2 Run the Payables AutoApproval Process for All Invoices /

Invoice Batches 4/2/13

3 Run Payables Accounting Process and transfer transactions to

GL 4/2/13

4 Prepare Accruals 4/3/13

5 Reconcile AP with GL 4/4/13

6 Close the module (soft and hard close) 4/1/13 4/5/13

Process/Module AR Module1 Reconcile Receipts to Bank Statement Activity for the Period 4/5/13

2 Reconcile the General Ledger Transfer Process 4/6/13

3 Reconcile AR Aging with GL 4/7/13

4 Close the module (soft and hard close) 4/1/2013 4/7/13

Process/Module Fixed Assets1 Run Mass additions program 4/3/13

2 Validate the Gross fixed asset value 4/4/13

3 Run depreciation 4/4/13

4 Validate depreciation 4/4/13

5 Close the module (soft and hard close) 4/1/2013 4/5/13

Subsidiary Name

Daily

Calendar Day

Sample Workflow and Status

Workflow approval process

Key Metrics and Dashboards

Sample Policy

HYPERION EPM

TOOLS

WORLD CLASS FINANCE

DEPARTMENTS & THEIR

TOOLS

ORACLE HYPERION EPM OVERVIEW

FDM/ODI Integration tools

SOURCE

SYSTEMS

DATA

PREPARATION

SERVER

ORACLE EPM

SYSTEMS

Excel

Other ERP

Systems

EBS G/L

Flat files

ETL

Other

Data cleansing &

transformation

Task scheduling

Text & document

archive

Audit review

Data staging

Prepackaged

integration

Data loading

including

supplemental

data and line

item detail

Dimensional

mapping

verification to

corporate COA

Process

management

Hyperion Financial

Management

Hyperion Planning

Hyperion Essbase

Hyperion

Enterprise

Data Marts

GUIDED WORKFLOW USER INTERFACE

EPM Adapters

Hyperion Planning FEATURES

• Strategic Planning

• Forecasting and Modeling & Simulation

• What-if Analysis

• Excel Integration and full Enterprise Collaboration

• Currency conversion feature for multi-currency applications

• Streamlines and improves the Budget process

• Ensures Speed & accuracy

• Finance owned tool

• Align finance and operations

• Accountability

• Visibility to past, current and future business performance

BENEFITS

WORLD CLASS

Planning & Budgeting Applications in the World

#1

Hyperion Essbase FEATURES

• Essbase or "Extended Spread Sheet

dataBASE“, is a 3-D Spreadsheet

• Addresses scalability issues and allows deep dives into data in real time.

• Defines the “by’s” and “where’s” of the company

• Powers the Planning Application as well as its standing alone capabilities

• One Version of the Truth

• Speed-of-thought analysis for thousands of concurrent users

• Scalable to enterprise-level user base

• Premium Performance & Optimized Storage

BENEFITS

Hyperion Financial Management FEATURES

• Multi-Currency Capability

• Multi-Dimensionality Features

• Automates Intercompany Accounting

• Integrates Data from most GL

Systems.

• Excel Integration adapts for user

comfort with spreadsheets

• Web interface, allowing for real time consolidation

• Speed & accuracy

• Finance owned tool

• Align entities and divisions

• Increased Visibility and Accountability

• Out of the box features improve implementation time and ROI

BENEFITS

WORLD CLASS

Financial Reporting Consolidation & Analysis Tool

#1

Financial Close Management

FEATURES

• Workflow solution manage the entire

close process

• Easily illustrates the current status of

the close

• Automates checklists and Account

Reconciliation process

• Highlights which tasks are at risk or

behind schedule

Finance owned

Central dashboard enables:

Process monitoring

Immediate action on errors

Encourages continuous improvement to the close process

BENEFITS

Financial Disclosure Management

FEATURES

• Automates and manages the SEC and other regulatory reporting process

• Ensures data accuracy via embedded regulatory validation rules

• Offers a variety of publishing formats including XBRL, iXBRL, EDGAR HTML and PDF

• Allows multiple users to work together on different report sections

Easy regulatory reporting with data quality assurance

Deep integration with Oracle Hyperion Financial Management, Oracle Hyperion Planning, and Oracle Essbase

Best in class document management

BENEFITS

SUMMARY

AUDIENCE Q&A