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© 2008 Oracle Corporation

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Enterprise Performance Management (EPM)PartnerLabJulie HarrisHoward JonesKate HutchinsonMatt Rodgers


Objectives for today

• Enable you to deliver the Oracle EPM “elevator pitch” and

articulate the story behind it

• Equip you to build pipeline, lead and WIN successful Oracle

EPM sales cycles

• Understand the business drivers and benefits

• Deliver a high level solution overview

• Learn customer success examples and sound bites

• Target the right audience

• Qualify opportunities and assess Oracle EPM solution fit

• Know the competitive market and Oracle's differentiation against competitors

• Understand a typical sales cycle

• Understand product pricing

• Know where to go for further training, help and assistance

Top

Priority


The following is intended to outline our general product direction. It is intended for information

purposes only, and may not be incorporated into any contract. It is not a commitment to deliver any

material, code, or functionality, and should not be relied upon in making purchasing decisions.The development, release, and timing of any

features or functionality described for Oracle’s products remains at the sole discretion of Oracle.


Agenda

• 10.00 – Welcome, Introduction and Objectives • 10.15 – EPM History and Overview• 10.55 BREAK• 11.05 – Oracle Hyperion Planning• 11.50 – Strategic Finance & Crystal Ball• 12:05 – Cost & Profitability Management• 12.50 LUNCH• 13.30 – Financial Consolidation & Reporting • 14.15 – EPMA & Essbase• 14.30 – Oracle Competitive Differentiators• 15.10 BREAK• 15.30 – Partnering with Oracle - All you need to know!• 15.45 – Q&A discussion• 16.00 – Conclusion and wrap-up


Who are Hyperion?

• Leaders in Financial Consolidations, Planning Applications and OLAP technology

• Acquired by Oracle in 2007

• Products now form Oracle’s strategic direction in Enterprise Performance Management (EPM)

• Ongoing investment has resulted in new products and enhanced integration with ERP



What is EPM?


Peak Performance – Beyond Operational EfficiencyOrganisational Alignment and Effectiveness

SMART

AGILE

ALIGNED


Operational Processes Are Well DefinedThat’s Why Customers Implement ERP/CRM/…

ERP Has Leveled the Playing Field Creating Operational Efficiencies

Based on Michael E. Porter’s Value Chain

Inbound Logistics

OperationsMarketing &

SalesService

Outbound Logistics

Firm Infrastructure

Human Resource Management

Technology Development

Procurement

Invest to Retire

Source to Procure

Procure to Pay

Order to Cash

Develop to Release


Copyright © 2008, Oracle and / or its affiliates. All rights reserved.

Management Excellence:The Next Competitive Edge

Time

CompetitiveAdvantage

OPERATIONAL EXCELLENCE

MANAGEMENT EXCELLENCE

Cost – Lean and MeanQuality – Six Sigma, TQMSpeed – Real-time, JIT

Cost – Lean and MeanQuality – Six Sigma, TQMSpeed – Real-time, JIT

Smart – Deep InsightAgile – Decisive ActionAligned – Across the

extended enterprise

Smart – Deep InsightAgile – Decisive ActionAligned – Across the

extended enterprise


Today’s Reality: Management Processes Are Fragmented

• Lack of business alignment

• Low predictability in

performance

• Inconsistency in business

decisions

ANALYZE PERFORMANCE

GOAL SETTING

SCORECARDS FINANCIAL REPORTING

FINANCIAL MODELING

VARIANCE ANALYSIS

ROLLING FORECAST

OPERATIONAL PLANNING

MONITOR RESULTS

EVA

$€£ ¥


Traditional Performance Management

SMART

AGILE

ALIGNED

Strategy to Success: Oracle’s Framework for Achieving Management Excellence


Pillars to Achieving Management Excellence

SMART

AGILE

ALIGNED

Rationalize Your Management Systems

Leverage Advanced Integration

Share Insights Across the Extended Enterprise


Copyright © 2008, Oracle and / or its affiliates. All rights reserved.

Oracle Provides Key CapabilitiesComplete, Open & Integrated

EXTERNAL REPORTING

INTEGRATED BUSINESS PLANNING

PROFITABILITY & COST MANAGEMENT

SCORECARDING, MONITORING & ANALYSIS

FINANCIAL & MGMT REPORTING

OLAP, DATA WAREHOUSE, DATA MINING

DATA INTEGRATION, APPLICATION MANAGEMENT & MASTER DATA MANAGEMENT

STRATEGIC & PREDICTIVE MODELING

BI TOOLS & BI APPLICATIONS, REAL-TIME MONITORING



EPM SYSTEM Architecture

• Common information delivery within a workspace

• Common information model

• Common platform and integrations


Oracle EPM System

Ledger

Financial Management

Reporting & Analytics

Other Sources

Exc

el ,

Acq

uis

itio

ns

& O

the

r S

ou

rces

Da

ta R

ela

tion

ship

Ma

na

ge

men

t

Fin

an

cia

l D

ata

Qu

alit

y M

an

age

men

t –

Bu

sin

ess

Use

r P

rocessin

g

Oracle Data Integrator –Automated Batch Processing

EPMA & Shared

Services

Strategic Finance

Planning

Montecarlo Capex

Workforce

Tax Stream Essbase

‘My EPM’ Workspace

Scorecard


Oracle’s Enterprise Performance Management System

BI Applications

EPM Workspace

OLTP & ODSSystems

Data WarehouseData Mart

SAP, Oracle, Siebel,PeopleSoft, Custom

ExcelXML

BusinessProcess

OLAP

Fusion Middleware

Business Intelligence Foundation

BI ApplicationsPerformance Management

Applications


Market Leading Performance Management Applications

BI Applications

EPM Workspace

OLTP & ODSSystems

Data WarehouseData Mart

SAP, Oracle, Siebel,PeopleSoft, Custom

ExcelXML

BusinessProcess

OLAP

Fusion Middleware

Business Intelligence Foundation

BI Applications

PERFORMANCE MANAGEMENT APPLICATIONS

StrategyManagement

BusinessPlanning

ProfitabilityManagement

FinancialReporting &Compliance


Market Leading Performance Management Applications - CXO & FINANCE


StrategyManagement

BusinessPlanning



Set Goals and Align

Plan

Analyze

Consolidate and Report


Market Leading Performance Management Applications - CXO & FINANCE


StrategyManagement

BusinessPlanning



Hyperion Performance Scorecard, Hyperion Strategic Finance,

Crystal Ball

Hyperion Planning, Workforce Planning, Capital Asset Planning

Integrated Operational Planning

Hyperion Profitability and Cost Management

Hyperion Financial Management, Hyperion Financial Data

Quality Management, Hyperion Enterprise

Essbase

Data Relatio

nship Management


Questions & Discussion


C O F F E E B R E A K


Oracle Hyperion Planning


How Do You Build the Budget?

1. Finance creates the forms

2. Managers input their data by accounting period

3. Finance aggregates the budget

4. Management reviews the budget and…

“Repeat this cycle until either the management team is happy with the budget or budget managers lose

their will to live”

Gartner



What Are the Challenges?

“High processing time due to lack of strategic guidance and missing link

between financial and operational plans”

“Low plan accuracy (variance accuracy) due to inaccurate data”

“Limited level of detail for the budget”

“High number of Excel spreadsheets that need maintenance”

“Need to expand to: rolling forecasts, operational planning, investment

planning, bulk updates, pre-built depreciation calculations, version control”


Budgeting Process is Highly Inefficient

• Time – takes too long, results obsolete

• Quality – political/negotiation, not reflective of business

• Cost – many wasted resources, dubious benefits

• Flexibility – lack of responsiveness to changes

FP&A Group

Senior Management

Dept A Dept B Dept C


Best Practices in PlanningStreamlining Planning, Budgeting and Forecasting Processes

• Centralized, not distributed

• Short budget cycles

• Collaboration across organization

• Consistent assumptions and calculations

• Accurate data and plans

• Accountability

• Align top-down with bottom-up

• Driver-based planning

• Rolling forecasting



Planning Customers


Innovative Solution growing with the Customer Needs

• 1989 Philip Morris USA

• 1992 Logitech, Toshiba, Morgan Stanley

• 1996 Nationwide

• 1997 Pfizer

• 1999 Heineken

• 2000 Olympus

• 2001 All Seasons,Autonation

• 2002 Pepsi, Wellpoint

• 2003 Telenor

• 2004 Toyota, UMB Bank

Long time referenceable clients in all industries and all geographies


Hyperion Planning Market Penetration

1395

278

504

740

1008

1272

1624

2050

0

500

1000

1500

2000

2500

2000 2001 2002 2003 2004 2005 2006 2007 2008

Year

Customer Count


20,000

Num

ber

of U

se

rs

Scalable Planning Solution

ToyotaHyatt

3,000

Norway Post

Petrobras

Newmont

Credit Suisse

Telenor

Turkiye IS Bank

Lockheed Martin

BritishTelecom Dell

Alcoa


After• First budget iteration takes only 4½weeks

• Reorganizations down to 24 hours

• A very detailed expense budget that utilized over 700 accounts

• Each individual employee was budgeted (60,000 in phase 2)

• For the first time ever, ING had three-dimensional reporting

• Several new reports enable managers to analyze the business (e.g. year-over-year quarterly comparison)

Before

• First budget iteration took 8 weeks, while transferring employees or departments took 10 days

• Creation & distribution of the Excel templates took 4 weeks

• The data was not dependable for management to make business decisions

• Corporate Budget Group employed 9 people to maintain the process and offline system

� One of the 20 largest financial institutions worldwide

� Revenues of ~9 billion USD (2005)� Over 113 thousand full time employees


Planning Challenges Solved

Planning Cycle Time

Accuracy / Variance

Excel Errors

Level of Plan Detail

Finance Productivity

ROI

50-82% time reduction

65-80% improvement

Replaced 6,000+ Spreadsheets

700 accounts; 60,000 employees

8 FTE’s transferred to analysis

$1.5M Return on Investment

Customer Challenges Results with Oracle



Solving Planning Issues. How?


Strategic Planning

Enterprise Planning

Operational Planning

Revenue / P&L Planning

Organization-wide Planning

Capacity Planning

Rolling Forecasting

Budgeting

Capital Planning

Closed-loop Budgeting

Project Planning

Integrated Business Planning

ONEONEPlanning PlatformPlanning Platform


Planning and Reporting with Spreadsheets


Need a Single Repository…


…with Analysis by Many Dimensions

Legal EntityCost Centre

Account

• Business Unit

• Analysis Code

• Project

• Time

• Scenario

• etc.


Excel

Offline

Process

Security Automated Data Input

Data Manipulation

Reporting

Web Forms

Oracle Hyperion Planning

Essbase


Automated data input

Data Manipulation

ReportingInput Forms

User Task lists

Process Control

Approval Workflow

Usability features

Menus

Annotations

Supporting detail

Standard functions

Oracle Hyperion Planning Functionality


Automated data input

Data Manipulation

ReportingInput Forms

User Task lists

Process Control

Approval Workflow

Usability features

Smart View Add-in

Offline mode

Workforce Planning

Capital Planning

Oracle Hyperion Planning Functionality


Planning Dimensions

Dimensions

• Entity

• Account

• Year

• Period

• Scenario

• Version

• Currency

• + 13 custom

Uses

• Organizational unit

• Natural Account Code

• FY, CY

• Days, weeks, months

• Budget, Forecast, Stretch, etc.

• Working, Draft, Final, etc.

• Automatic

• Product, Channel, Project, Customer, etc.

Hierarchies built on all dimensions


Workforce PlanningImproves Headcount, Salary and Compensation Planning

• Packaged solution based on the Planning platform

• Plan salary, compensation, turnover rates at any level

• Add, edit, transfer and delete employees and new hires

• Leverage pre-defined or custom calculations for taxes

• Integrate actuals from HR systems

• Test scenarios in real-time for impact analysis


Capital Expense PlanningImproves Planning the Acquisition, Lifecycle Management and Retirement of Capital Assets

• Packaged solution based on the Planning platform

• Plan for asset purchases and capital asset related expenses

• Transfer, retire, and improve assets

• Leverage pre-defined or custom calculations for depreciation and amortization, etc.

• Interfaces with external systems

• Analyze impact on P/L, Balance Sheet and Cash Flow


Key Success FactorsWhat it means to our customers

• Accuracy - One Planning platform for all the modules like Workforce Planning, Capital Expense Planning, improving processing time and accuracy, as well as reducing the maintenance overhead

• Performance - Essbase, award winning OLAP engine, boosting the scalability and performance of any planning application

• Simplicity - One reporting workspace enabling real-time, side-by-side planning, forecasting and analysis


Demo 1 - Planning


Strategic Finance


What is Enterprise Planning ?

OPERATIONAL PLANNING

Annual PlanDepartmental

PlanningForecasting

Specialised Planning

INTEGRATED

ENTERPRISE PLANNING

SIMULATION & MODELING

STRATEGIC PLANNING

Long-Range Plan

Major Investments

Treasury Strategies

M&A and Divestitures


Single Centralised Planning Platform

Income Statement

Balance Sheet Cashflow

CORE FINANCIAL PLANS

Workforce Planning

CapEx Planning

SPECIALISED MODULES

Sales Planning

CONFIGURED PLANS

Projects Planning

Marketing Planning

ProductionPlanning

Oracle Business Intelligence Foundation

Operational Planning

Data Warehouses Transactional Systems Performance Management Applications

Strategic Planning

Simulation & Modelling


50

Forecast With Confidence

Key Metrics

• Earnings

• Debt/Equity

• Interest Coverage

Valuation

• Free Cash Flows

• Cost of Capital

• Net Present Value

Income Statement

• Revenues

• COGS

• OPEX

• Net Income

Balance Sheet

• CAPEX

• Working Capital

• Equity

• Debt

Cash Flow

• Operating

• Investing

• Financing

Fully Integrated Financials

Financing

• Term Debt

• Revolving Debt

• Common Stock

• Preferred Stock

Business Specific Drivers

• Market Growth %

• Days Sales

• Inventory Turns

Historicals

• Income Statement

• Balance Sheet

Ratings

• Credit Ratings

• Bank Covenants

Operational Plan

• Revenue targets

• Investment limits

• Working cap’l level

• Assumptions


Henry Morris, IDC

IDC, 2002

“(Strategic Planning and budgeting processes are

distinct and should be served by separate, though

related applications, which are tailored to the needs

of each process.

Outputs of the planning process seed targets for

budgeting and the results of the budgeting process

impact future planning.”

Strategic Planning vs. Budgeting and Forecasting

AC1

Slide 51

AC1

Message:

Because strategic planning and budgeting and forecasting are different processes, they need to be served by different applicationsAndré de Carvalho, 12/07/2004


Extending the Planning Platform to Manage Corporate Value

Treasury

CFO

CorporateFinance

CorporateDevelopment

Top-Down Target Setting

Contingency Planning

Strategy Screening

Covenant/Ratio Analysis

Funding Alternatives

Rating Agencies

Mergers & Acquisitions

Valuation Analysis

Divestitures


Plan for Initial Public Offering

$2 Billion fast-food chain with over 11,000 restaurants in 65 countries

BEFORE

• 6-month strategic planning cycle

• Large debt balance to manage

• No cash flow modeling capability

AFTER

• 3-month strategic planning cycle

• 5-year plan for earnings and share price

• Simulations on store openings and closures


Overcome a Major Liquidity Crisis

BEFORE

• Lost investment-grade credit rating

• Needed recapitalize balance sheet

• No cash flow modeling capability

• No simulations at the divisional or business unit level

AFTER

• Credit rating back to investment grade

• $4 Billion debt restructuring

• Simulate capital structure and cash flow

• 3% accuracy in net income projection

$22 Billion global provider of power and automation technologies


Hyperion Strategic Finance extends the planning platform

• Trail Analysis - visualizing the model logic

• Consolidation Intelligence -including dealing with complex entity structures

• “Deal Period” functionality especially for M&A simulations

• Debt Scheduler to understand cash flow implications of debt

• Funding Options - optimizing capital structure

• “What-If” Analysis Toolkit with unlimited scenarios

Accounting Integrity and Modeling Speed


Demo 2 – Strategic Finance


Crystal Ball


Why Use Crystal Ball?

• Use Crystal Ball to

• See all possible outcomes

• “Think in Ranges”

• Improve quality of your decision making

• Benefits to you

• Easy

• Effective

• Enhance Credibility


Benefits of Simulation in Risk Analysis

• What do you think would happen if we did not use simulation?

Would you fund this project?

• Range of Outcomes

• Probability of Failure28%

• Single-Point Estimate

NPV£2 B- £2 B- £4 B £4 B £6 B £8 B£0 B


Why Use Crystal Ball?


Why Use Crystal Ball?You can see which drivers have the biggest impact


Profitability and Cost ManagementKate Hutchinson


Agenda

• The Need for Profitability and Cost Management

• Introducing Hyperion Profitability and Cost Management

• Demonstration

• Reporting

• Summary


Profitability Problems Highlighted

What? Why?

Now What?

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?What is the profit contribution margin of a product or a service?

Why are customers profitable or unprofitable?Why is the cost to sell or service different across the customer base?How do business processes impact customer profitability? How is resource consumption affected by product maturity?

How are we doing compared to before?How to adjust Plans and Budgets to affect Profitability? How are we doing compared to others in our industry?


- Cost to Serve

Industry Examples – Retail

65

- Product profitability and process review

Shell Retail - Forecourt profitability


- Understanding exception rates and process costs

Other Industry Examples

66

- Product profitability

Regulatory reporting

- Regulatory reporting

- Activity Based Budgeting


Other costs require analytical capabilities to be assigned in proper

way

Why they should change?

MaterialDirect Labor

These are obvious and relatively easy to assign

Production Overhead

Product Management

Customer Service

Administrative Support

Quality Service

Sales/ Marketing

Support

Utilities

Companies need to understand the size and depth of their cost structures… otherwise they could crash into the Iceberg!

Conventional Cost Accounting Focuses Only on the “Tip-of-the-Iceberg” Costs


Profitability Ranks Highly in Recent Surveys

61.2%

49.4%

44.5%

36.3%

29.4%

24.9%

13.5%

12.2%

12.2%

5.3%

0% 10% 20% 30% 40% 50% 60% 70%

Revenue growth

Increasing profitability

Reducing costs

Increasing market share

Improving customer service/loyalty

Driving innovation

Strengthening relationships with key stakeholders

Strengthening corporate brands

Completing mergers and acquisitions

Corporate social responsibility

Expected Benefits of Better Business IntelligenceNovember, 2007


Yet Tools Fall Far Short of Needs

TENTH ANNUAL TECHNOLOGY ISSUES FOR FINANCIAL EXECUTIVES SURVEY

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