MasterCard Worldwide Drives Performance Using Oracle HPCM
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Mastercard uses Oracle Hyperion Profitability and Cost Management (HPCM) to generate fully allocated country P&Ls. [1] HPCM allocates costs and revenue across multiple stages to attribute expenses between direct, dedicated, and indirect categories. [2] This tiered approach provides transparency into the allocation rules. [3] Mastercard's implementation of HPCM within Oracle's EPM platform has enabled faster reporting and fit within their existing systems.
MasterCard Worldwide Drives Performance Using Oracle HPCM
- 1. Edgewater Ranzal Lunch and Learn Mastercard Drives Financial Performance Using Oracle HPCM Jonah Rufus William, Business Leader Financial Systems, Mastercard Mike Killeen, Oracle Ace, Sr. Vice President, Edgewater Ranzal Tues Sep 20, 2016
- 2. About Ranzal Edgewater Ranzal is a full-service Oracle Platinum Consulting Partner with premier services in North America and a regional office in the United Kingdom. 1,000+ Oracle/Hyperion epm, bi, big data customers 2,000+ Oracle/Hyperion epm, bi, big data projects PBCS EPBCS FCCS ARCS BICS BD Cloud PCMCS EPRCS Planning Suite Fin Close Suite BI Suite Cloud (SaaS/PaaS) On Premise Big Data HPCM DRM FDMEE Governance Engineered Systems FCM Integration
- 3. 3 • 17 Years in EPM & BI Space • Consulting • Managing Financials Systems • Industry Experience • Technology • Retail • Finance • Education • Govt. • Implemented EPM/BI at • Mastercard • DoE Mass • SGI • Staples • AAFES • Activision • Hindustan Lever etc. • Worked at: • IBM Cognos as EPM Architect • Oracle Partner as Sr. Principal Consultant • Mastercard since 2006 Education Engineer – Electrical & Electronics MBA – Systems and Marketing Strategize, Implement and Sustain Hyperion and BI Platforms Business Leader | GBSC Systems Presenter Bio © 2016 Mastercard. Proprietary and Confidential
- 4. About the Speaker – Mike Killeen 4 Senior Vice President of Technology & Strategy Planning & Analytics Practice Lead for 5 Years Helped Establish Ranzal’s UK Division Responsible for driving growth through strategic initiatives – currently focused on HPCM, DRM & BI Works from Ranzal’s Corporate HQ in White Plains, NY Oracle Certified Professional Essbase, Planning & HFM Oracle ACE – Business Intelligence 19+ Years of Functional & Technical Experience In: Budgeting, Forecasting & Planning Cost Allocation & Profitability Management Solutions Business Intelligence Master Data Management & Data Integration Solution Architecture & Design Process Rationalization & Transformation Client Engagement Portfolio Includes Various Industries: Financial Services & Insurance Consumer Products and Retail Professional Services Telecommunications Higher Education Health Care Works Closely with Oracle Product Management on Enhancements & Direction
- 5. Oracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer StoryOracle HPCM Customer Story Fully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard WorldwideFully Allocated P&Ls at MasterCard Worldwide September, 2016 Jonah Rufus William Business Leader – GBSC Systems
- 6. 1. Hyperion @ Mastercard 2. Business Background & Challenges 3. Solution Overview 4. Business Benefits & Lessons Learned 5. Future Plans 6 Mastercard Customer Story Agenda © 2016 Mastercard. Proprietary and Confidential
- 7. 7 Keep things simple and stretch the boundaries, go beyond the general use of Hyperion / BI. Mgmt. Reporting Entity Mapping Work Force Product P&L 2011 2012 2013 2014 Local Currency Driver Local Currency Exposure FX FTE SPA - II Implementation Stabilization Expansion Budget Breakout Performance Tuning 2015 Commitment Lights Out Automation StratPlan Customer P&L 2010 Payroll Renovation 2016 D&A Revenue Attribute Local Actual M&A Cash Flow Hyperion Upgrade Allocated P&L Expense Mgmt. BI Rev. Rec. Application Automation / Enhancement / Project BI Stabilization | Expansion Fin - BI Revenue Expense A&M Op Plan - BI Cur. Neutral Hyperion @ Mastercard © 2016 Mastercard. Proprietary and Confidential HyperionStats 20 • Hyperion Applications 30 % 40 % • 2015 Growth In Foot Print • 2014 Growth in Foot Print 14 • Process Supported Globally across 12 business units 600 • World Wide Users 1 Monthly Close 2 Strategic Planning Annual Budget3 Quarterly Forecast4 8 Workforce Planning 9 Monthly Customer P&L (COS) Quarterly Product P&L (PPL)10 Local Currency Exposure11 Monthly Payroll Process5 Commitment Collection Process12 M&A Reporting6 Managerial P & L13 Cash Flow7 BI Updates14
- 8. 8 1. Fully Loaded Country P&L 2. Transparent Rules 3. Sound and Simple Methodology 4. Faster System 5. Fit within Hyperion Framework Mastercard Challenge © 2016 Mastercard. Proprietary and Confidential
- 9. 9 1. Prototype in MS Access & Excel 2. Obtain buy in from impacted business owners 3. Assess solution fit with in Oracle Platform 4. Develop Functional Pilot in Requirements & Design 5. Implement & Rollout 6. Build Future Roadmap Mastercard Strategy © 2016 Mastercard. Proprietary and Confidential
- 10. 10 Guiding Principle: Tiered approach to attribute Revenue & Margin between Direct/Dedicated and Indirect/Overhead. 1. Drivers – Revenue Based or Metrics Based 2. Actual from Oracle General Ledger 3. M1: Revenues & Directly associated expenses no allocation 4. M2: Dedicated expense mapped to country 5. M3: Support expense allocated to country 6. M4: Overhead expenses allocated to country 7. Actual from Oracle GL gets allocated using the guiding principle 8. Simple rule to produce Tiered P&Ls applied after allocation 9. Validation reports are run to ensure data accuracy 10.Results published via Prebuilt FR or SmartView Mastercard Solution Overview © 2016 Mastercard. Proprietary and Confidential
- 11. 11 Margin 1 Margin 2 Margin 3 Margin 4 Variance Explanation Fully Allocated P&L © 2016 Mastercard. Proprietary and Confidential
- 12. 12 1. HPCM allocates Costs & Revenue Pools through one or more stages in a top down capacity 2. Stage – Step in the allocation process that has similar pool characteristics 3. Separate stages enable traceability. Cost CtrAccount* Data Type GeoDivision* GeoDivision* Geo*Division Stage 1 – Financial Detail Stage 2 – Fin. Pool Stage 4 – Tier 2 Stage 3 – Tier 1 Cost Pool Tier 1 (Div) Allocs or Pass Thru (Direct) Tier 2 (Geo) Allocs or Pass Thru (Direct) Sum Account/CC to Cost Pool (Direct) AccountCost Ctr Data Type GeoDivision GeoDivisionCost Pool 1-3-4 Genealogy Allocation Results 1-3-4 Genealogy HPCM Model Architecture – Stage Design © 2016 Mastercard. Proprietary and Confidential
- 13. 13 1. Planning App to stage, validate inputs and consume 2. Relational model to contract and expand data grain 3. Front end to assign rules 4. Prebuilt Tiered report 5. Trace Screens Mastercard Solution Highlights © 2016 Mastercard. Proprietary and Confidential
- 14. 14 1. Trace Screens work at allocation grain 2. Need a reporting solution to make end user consumption easy 3. HPCM is a maturing product 4. Success or Failure depends on the partner’s experience – project completed on time and on budget Mastercard Lessons Learned © 2016 Mastercard. Proprietary and Confidential
- 15. 15 1. Explore use of Management Ledger • Movement of historical management restatements from the general ledger • Would require upgrade to 11.1.2.4 2. Product & Customer Profitability migration to HPCM 3. Delivery of Dashboards to Business Users using OBIEE Mastercard HPCM Future Plans © 2016 Mastercard. Proprietary and Confidential
- 16. Edgewater Ranzal Lunch and Learn An Overview of Oracle HPCM Mike Killeen, Oracle Ace, Sr. Vice President, Edgewater Ranzal Tues Sep 20, 2016
- 17. HPCM Overview Agenda 17 Challenges in Profitability Management Delivery Profitability and Cost Management Solution Overview Deep Dive into Oracle Hyperion Profitability & Cost Management (HPCM) Preview of Oracle HPCM Cloud (PCMCS) Closing & Q&A
- 18. Recap: Profitability Management Goal – Delivery of Strategic P&Ls 19
- 19. Financial transactions Financial Data Consolidation (GL or HFM) Accumulator Bottom-line Results Organizational P&L Challenge #1 - Statutory Reports are not Timely or Detailed Enough 19 What defines a profitable customer? What is the profit contribution of a product or a service? What does it cost to sell to or to service customers? What proportion of resources does a specific customer consume? Why hasn’t increased revenue resulted in increased profitability?
- 20. No Standard Process Standard, accepted process Indirect Costs are tracked against supply side structures, not demand side needs. This makes measurement difficult Challenge #2 - Indirect Cost Assignment to Products, Services & Customers 20
- 21. Challenge #3 - Consistent Performance as Volume & Use Increase 21 Sales/ Product Managers Cost Center Managers LOB Execs Finance10’s 100’s 1000’s 1000’s LOB/Functions Segments/Entities Departments Products & Customers User Counts Data Volumes Frequency Of Use 100’s 1000’s 10K’s 1 MM’s Qtrs Monthly Weekly Daily
- 22. Reliability Visibly defense profitability & cost results through transparency & audit/control Agility Timely reflection of results to be actionable Relevance An ability to Allocate resources to the most important opportunities Financial Results Revenue & Cost Models Operational Results FP&A Senior Management Expectations of a Profitability Management Solution 22
- 23. Overview 23 Oracle Business Analytics Profitability Management Solution
- 24. Hyperion Profitability & Cost Management (HPCM) 24 Packaged Profitability functionality Business User-Driven application Tightly integrated with the full Hyperion EPM Suite
- 25. Why HPCM? To Meet these Key Requirements… 25 Flexibility Audit & Accuracy Speed Transparency Organizations need information management solutions to address the challenges. These needs can be abbreviated as F-A-S-T! Provide key stakeholders confidence in the numbers produced and methodologies employed to ensure compliance. Ensure data is timely enough to be actionable Ensure system provides “speed of thought” response in reporting and analysis to support Ad-Hoc questions Allow managers to understand cost to serve and client profitability Understand why some clients are profitable and others are not, and what can be done to change business behavior Analyze different contractual approaches to yield optimal mix of services versus costs incurred by the client. Provide What-If Capabilities to assess impact of key business decisions on bottom line
- 26. Solution Architecture with HPCM 26 Ad HocPublished Reports HPCM Data Mart Hierarchies, Attributes & Maps Web Office Manual Data Input Pre & Post-Allocations Data Processing Attributions & Adj ETL/FDMEE GL or HFM Operational System .txt file .csv file Calculations Validations Centralized Reporting Supply Plan Demand Plan OBIEE Reports DRM Information Management: Pools & Drivers Information Generation Information Delivery Information Management: Master Data
- 27. Multiple HPCM Use Cases 27 Group Services (e.g. Property, Controllership, IT) Product Profitability Customer Profitability Group Overhead (e.g. CEO) Division 3 Division Overhead Fully Allocated P&L (e.g. Product Line, Channel, Region) Group HQ Operational Profitability "BI" Shd Svcs Expense Allocations Inter Unit Charges (e.g. Xfer Pricing, Contractual Charges) Division Services Fully Alloc P&L "Thin Ledger" Inter Unit “Regulatory” Division 2 Division Overhead Fully Allocated P&L (e.g. Product Line, Channel, Region) Division Services Division 1 Division Overhead Fully Allocated P&L (e.g. Product Line, Channel, Region) Division Services
- 28. Financial Close Use Cases Improve Efficiency via Automation of Reports & Data Improve Effectiveness by enabling Transparency into drivers, pools & allocations Reduce Risk by eliminating manual spreadsheets and incorporating Stronger Controls through an integrated, standardized system. Profitability Analysis Use Cases Ensure Reliability of results through meaningful, Accurate methodologies which generate Strategic P&Ls that tie back to published financial results. Improve Agility in key decision making process through Timely distribution of the stakeholders that need it. Improve the Relevance of published results by allowing organizations to Assess and Allocate resources to the most important opportunities 28 HPCM Business Benefits
- 30. HPCM Has Multiple Model Types to Solve Different Allocation Problems 30 Version 11.1.1.1 Version 11.1.2.0 Version 11.1.2.4 Management Ledger Fully Allocated P&L Standard Cost Rate Development via ABC Customer Profitability HFM/GL Actuals Planning Bgt/Fcst BI Reporting
- 31. HPCM Management Ledger 31 ASO EPMAHPCM HPCM repository OR ASO Metadata Cube Calculation and Reporting Meta Data File OR
- 32. Management Ledger- Metadata 32 System Dimensions POV Dimensions Business Dimensions
- 33. Management Ledger- Manage Rules 33
- 34. Management Ledger- Manage Rules 34 - Set-up sequence of rule within a rule set - Select the option of executing : - Serial - Parallel - Iterative with number of required iterations
- 35. 1 2 3 . 4 5 User Interface and rule driven – no black box implementation with staging areas Validation performed at rule level Custom MDX scripts Traceability available in various formats Iterative rules for reciprocal allocations Management Ledger- Features 35 Unlimited Dimensions : Stage-less design allows 4 POV dimensions and unlimited business and attribute dimensions Source side rules, iterative rule support for reciprocal allocations, flexible driver references, custom calculations, and easy clear / recalculation Rule execution in parallel, serial, or iterations as needed, set by user Balancing by rule with allocations sent and received as well as adjustment values detailed by rule User defined slices through model views for enhanced rule balancing and trace analysis Visual allocation trace from aggregate or granular level, detailed by rule
- 37. But what about Cloud? 37 PBCS 2014 FCCS 2016 PCMCS 2016
- 38. Discover and Act on Hidden Profit and Loss Empower Users with Flexibility Improve Financial Decision Making 38 The Future - Oracle Profitability and Cost Management Cloud Service (PCMCS) R$ E$ Discover Cost and Profit
- 39. Copyright © 2016, Oracle and/or its affiliates. All rights reserved. | Profitability and Cost Management Cloud Service Pervasive and Focused Financial Analysis Performance Ledger Applications Complex Multi Step Computations Flexible Allocation & Custom Calcs Business User Managed Rules Comprehensive Audit Trail Performance Ledger Applications Complex Multi Step Computations Flexible Allocation & Custom Calcs Business User Managed Rules Comprehensive Audit Trail Application Management Best Practice Application Templates Dimension Upload / Update User Provisioning Data Security Application Management Best Practice Application Templates Dimension Upload / Update User Provisioning Data Security Multiple Dashboards Charts & Data Grids Key Performance Indicators Custom Time Aggregations Rank and Scoring Multiple Dashboards Charts & Data Grids Key Performance Indicators Custom Time Aggregations Rank and Scoring Population Performance Analysis Multi Dimensional Profit Rank and Order Allocation Rule Trace Custom Queries w/Drill to Smart View Population Performance Analysis Multi Dimensional Profit Rank and Order Allocation Rule Trace Custom Queries w/Drill to Smart View Custom Report Creation Strategic P & L Reports Cost Contribution Detail Custom Report Creation Strategic P & L Reports Cost Contribution Detail
- 40. Three Pillars to PCMCS 40 HPCM for Rules Management Mobile Ready Embedded Analytics PBCS Data & Automation Management
- 41. Copyright © 2016, Oracle and/or its affiliates. All rights reserved. | HPCM and PCMCS Summary of Recent Releases and Roadmap Near Term: PCMCSNear Term: PCMCS Future +1Future +1 • PCM Cloud Service • Data Forms • Rule Enhancements • Enhanced Rule and Balance Dims • PCMCS Solutions • Oracle IT Costing and Transparency • Partner Industry Specific Accelerators • PCM Cloud Service • Management Ledger Apps (a.k.a. Performance Ledger) • Embedded Analytics • Embedded Analytics • Population Performance Analysis • Multi Dimensional P&Ls • Cost Contribution Reporting • Cost and Profitability Statistics • KPI’s & Dashboards • Complete Data, Security and Automation • Data Management • EPM Automate • Data Level Security Recent: HPCM 11.1.2.4Recent: HPCM 11.1.2.4 • Ledger Allocations Support • Management Ledger Model Type • Mixed dimensional attribution • True business rules • Rule based allocation trace • Financial Close Manager Integration • Coordinated Schedules and Templates • Click through to ML App functions • Performance Enhancements • Detailed Apps Multi Source Rules • Management Ledger Allocation Rules • Dimension and Data Management • Management Ledger Apps • Data Load from File • Dimension Load from File • Template Export / Import Oracle Confidential – Internal/Restricted/Highly Restricted 41
- 43. Flexibility Business Users can Run Multiple Versions to assess impact of business changes Business Power User facing application – limited IT involvement in running the model Accuracy Profitability Workflows are now an automated, repeatable processes Meaningful cost drivers and methods for cost pools ensures greater acceptance of published results Speed Business Users Can answers questions that impact operational and pricing decisions quickly. Reporting Analytical Platform supports speed of thought ad-hoc reporting as well as user guided analysis Transparency Excellent visibility throughout the allocation process. Operational Managers now understand operational profitability and cost to serve via the analytical platform. • Summary –Typical Project Outcomes 43
- 44. Positioning Profitability Solutions Within Your Organization We understand where it fits…. We know the questions to ask…. 44 PBCS PCMCS ERP FCCSEPRCS DRM HCM CRM SCM Does your company understand the true costs of its products or services? re costing models transparent enough? Can you easily trace back the assigned costs to the activities and line item expenses that drive them? Are costing models transparent enough? Can you easily trace back the assigned costs to the activities and line item expenses that drive them? Do your costing methods operate at the right level of detail? Are you satisfied that you are allocating shared services (e.g. IT/HR) accurately? Are people spending too much time maintaining our costing models and other elements of our costing system? Can people in your company quickly test how changes to commodity, input costs, lower or higher volumes will affect our profitability? Are you getting answers from our costing systems fast enough to be actionable? Would reducing this process time improve our competitiveness or profitability? Is all of the data that you need to understand true costs available in a single ERP system? If not, what are the initial and ongoing costs of integrating that data into your ERP system?
- 45. Q&A 45
- 46. 6 Conference Sessions. 3 Lunches. 1 Happy Hour! Join Us. − LUNCH N LEARNS @ the Thirsty Bear, 11:45-1:00 pm − Mon: Cloud Showcase Featuring Universal Health Services and Brookdale Hospital − Tues: Mastercard Worldwide Drives Performance Using Oracle HPCM − Wed: Terumo Medical: Integrated Business Analytics at its Best! − Register for Lunches or Tuesday night Happy Hour @Southside Spirit House @[email protected]. − RANZAL KIOSK, Moscone West, 3rd Floor We're giving away Apple watches and TVs, wireless headphones, Bluetooth speakers, and much more! Receive an entry every time we see you - sessions, lunches, happy hour, and at our EPM kiosk #10 − CONFERENCE SESSIONS − Universal Health Services Presents: Monday, 9/19, 1:45pm - 2:30pm, Moscone West - 3018 Oracle Enterprise Performance Management on Premise and in the Cloud: Taking a Hybrid Approach − Mastercard Presents: Monday, 9/19, 3:00pm - 3:45pm, Moscone West - 3020 Customers Present - Profitability and Cost Management − Ranzal Presents: Wednesday, 9/21, 11:00am, Moscone West - 3rd Floor Understanding Cloud Strategies: On Premise, Cloud, and the Hybrid Approach − TransRE Presents: Thursday, 9/22, 9:30am - 10:15am, Moscone West - 3020 Introduction and Update: Oracle Hyperion Financial Close Suite − Brookdale Hospital Presents: Thursday, 9/22, 1:15pm - 2:00pm, Moscone West - 3018 Brookdale Hospital's Journey to the Cloud − PPG Industries & Trinity Health Presents: Thursday, 9/22, 1:15pm - 2:00pm, Moscone West - 3024 Customers Present - PPG Industries Simplifies with DRM 46