Corporate Finance Series
PROFITABILITY &
COST MANAGEMENT
Oracle Hyperion Profitability & Cost
Management (HPCM)
Value Propositions
Christian Kobel, Olivier Parchet
PebbleAge SA
Towards Profitability Analysis Workflow
Allocation Cost & Revenue
Metadata
Model Allocation Profitability & Cost Analysis
Management
Definition Calculations
Manage Create & Manage Store Cost, Revenue S9 BI+, Web Analysis,
Dimension Business Model & Driver Data Financial Reporting
Hierarchies
Allocation Rules Calculate Model & Profitability Analysis
Store Results
Automated Calc Cost & Revenue
Script Generation Contribution Analysis
Enterprise RDBMS Essbase Reporting
Performance SQL Server Calculation Cube with
Management Oracle Cube Allocation
Architect DB2 Genealogy
Copyright © 2010 PebbleAge SA 2
Value Proposition 1
LEVERAGES many Oracle EPM suite Components
Part of EPM platform, integrated with Hyperion financial applications
• BPMA, Centralized metadata management
• BPMA, Data synchronization
• FDQM, Data Load
• Planning, Driver Based Planning
• HFM , Allocations, Tax Reporting
• HSF, Key profitability drivers
Leverages Oracle EPM Suite BI+ EPM WORKSPACE
Components: Desktop Web Search Office Alerts Mobile
• Essbase Allocation Calculation Traceability
Web Analysis
Financial
OBI EE
Modeling Management Maps Reporting
• Smartview XL add-In
• Web Analysis
• Financial Reporting Profitability and Cost Management Core Engine
• More in the future… Essbase
BI+ Foundation
Data Warehouses Transactional Systems Performance Management
Applications
Copyright © 2010 PebbleAge SA 3
Value proposition 2
Custom Cost & Revenue Allocations is now possible
not only ABC/ABM methods !
New stage
Set calculation
order of
stages
Up to 9 free allocation Stages
Support for any allocation methodology
• Cascading service department allocations
• Activity Based Costing, Time Based ABC
• Revenue sharing & promotions allocations
Copyright © 2010 PebbleAge SA 4
Value Proposition 3
95% of Allocations made with generic Formula Types
no more programming !
The formula variables available for a driver depend on the
formula type you select.
There are eight Standard formula types.
Formula Type Formula
Simple CalculatedDriverValue = FixedDriverValue
Simple Weighted CalculatedDriverValue = FixedDriverValue * Weight
Variable CalculatedDriverValue = Rate * Quantity
Variable Weighted CalculatedDriverValue = Rate * Weight * Quantity
Fixed and Variable CalculatedDriverValue = FixedDriverValue + (Rate * Weight * Qtity)
Even CalculatedDriverValue = 1
Percentage CalculatedDriverValue = FixedDriverValue; TotalDriverValue=100
Custom CalculatedDriverValue = User-defined formula
Copyright © 2010 PebbleAge SA 5
Value Proposition 4
Cost & Profitability Model Validations embedded !
Copyright © 2010 PebbleAge SA 6
Value Proposition 5
Tracing Cost & revenues, do you prefer this way … ?
Copyright © 2010 PebbleAge SA 7
Value Proposition 5
…Or that way ?
Copyright © 2010 PebbleAge SA 8
Value Proposition 6
Managing Calculations …and much more with full
Essbase Profitability Datamart capabilities
Deploy to Essbase Import data View and edit data
Run Driver Data reports Run Stage Balancing
report
Calculate model
Copyright © 2010 PebbleAge SA 9
Value Proposition 7
New Performance Management reporting with full
Oracle BI+ capabilities
Profitability measurement of each business segment
– Who are the most and least profitable customers?
– What products contribute the most to the bottom line?
– Does customer or product profit vary by region?
Copyright © 2010 PebbleAge SA 10
Value Proposition 8
Driver Based Profitability …
The next step for Enterprise Planning
By focusing attention on
the key operational activities and
drivers that truly drive results,
businesses are becoming more agile
and adaptive.
Copyright © 2010 PebbleAge SA 11
