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Slide 1: Why Essbase? Robin Ranzal President, Ranzal & Associates Mike Killeen Planning Practice Director, Ranzal & Associates
Slide 2: Agenda About Ranzal Why Essbase? Types of Essbase Applications Ranzal Case Studies Custom Analytics – Profitability Management Custom Analytics – Price Volume Mix Analysis Operational Planning – Consumer Promotions Extending BI – Prototyping & Delivery Analytics Stand Alone BI – Management Reporting
Slide 3: About Ranzal Over 10+ years experience developing Business Performance Management Solutions with Hyperion Technology Oracle Certified Advantage Partner - Highest Status (Hyperion Preferred Consulting Partner) A Hyperion based consulting & software reseller firm, focused on Hyperion’s BPM Suite and complementary technologies Hyperion’s Partner of the Year Awards 1999, 2005, 2007 One of the largest Hyperion Focused practices in the U.S. Certified EPM/BPM Consultants & Instructors Unrivaled multi-discipline experience with subject matter experts focused on business value Vertical Expertise with high-profile clients from Coast to Coast East and West Coast Presence “Best Planning Practice with Best HFM Practice” Utilized by Hyperion Product Development Regarded in the industry as one of the "BEST” at leveraging OLAP technology to develop EPM/BPM Applications
Slide 4: Hyperion Relationship Customer Advisory Board Member for Essbase, Planning, and Infrastructure Founding Member of Oracle EPM Partner Advisory Council Assisted in development of Hyperion certification exams, including the System 9 Design Lead Certification Program Works closely with Hyperion engineers – e.g., Design, Development & Testing (both Beta & Alpha releases) of Hyperion software Hyperion Planning Workforce & Capex Modules Hyperion Business Rules Pending Hyperion Profitability Management Implemented Hyperion Planning and associated products in approximately 120 organizations across a wide variety of industries (Pre and Post System 9) 100% of Ranzal consultants have been trained in Hyperion Products
Slide 5: Why Essbase* *Slide Courtesy of Oracle
Slide 6: Where Does Essbase Fit? Is Essbase a data source or is it an application? Essbase has elements of both Potential Data Source for OBI Tools Stand Alone Application to eliminate spreadsheet reporting Is Essbase an IT product or a Finance product? It’s both! If you look around an Essbase training class, you will see: Someone from FP&A who is looking to use Essbase to get out of “spreadsheet heck” Someone from IT who is looking at Essbase as an enabler of ad hoc, speed of thought analysis against the data warehouse An operations analyst looking for a way to build customized analytical apps A line of business power user looking to create dashboards
Slide 7: Types of Essbase Applications Custom Analytical Application Implementation Customized Budgeting & Forecasting Solutions Financial Close Support Stand Alone Business Intelligence Solutions Extending Investment in existing Business Intelligence Solutions
Slide 8: Custom Analytical Applications Profitability Management – Customer & Product Margin Analysis Price Volume Mix – variance driver analysis and explanation Customer Segmentation – establishing customer tiers for managing service levels Price Optimization – “Goal Seeking” algorithms to maximize profits What If Scenario Modeling – analyst driven modeling calculations
Slide 9: Custom Budgeting & Forecasting Operational Planning – not very broad in methodologies, but deep in complexity within a specialized business function Consumer Promotions – heavy RDBMS/Essbase integration for events and promotions Sales Demand Planning – when integration with MRP is required “Low Cost” Departmental Expense Budgeting – alternative to Planning
Slide 10: Types of Essbase Applications (continued) Financial Close Support Contract/Lease/Loan Amortization Modeling Sophisticated Depreciation Schedules SOX compliance – better than stand alone spreadsheets, not as good as transaction embedded Stand Alone Business Intelligence Solutions (specialized cases) Self Service Dashboards and Management Reporting Limited IT Support and/or No Data Warehouse (e.g. Finance) Extending Investment in Existing Business Intelligence Solutions Enabling speed of thought Ad-Hoc via Excel Providing Drill-Through to granular data Rapid Prototyping Tool for BI Implementations
Slide 11: Ranzal Case Study Custom Analytics – Profitability Management Unilever Food Solutions Lisle, IL
Slide 12: Company Profile: Unilever Food Solutions, NA
Slide 13: Unilever Customer Profitability Business Issues
Slide 14: Customer Profitability Methodology INCREASED VALUE 4. 5. Allocate Indirect Costs to Customers & Products Allocated using drivers & rates Departmental SG&A Costs Consumer Promo, Marketing Costs Billing, AR, Order Mgmt Customer Segmentation Determine Allocation Model for Remaining Indirect Costs 3. Allocate Product Specific Costs to Customers 2. Determine Direct Customer & Detail Product Profitability 1. Determine Financial & High-Level Product Profitability Sourced through GL
Slide 15: Financial P&L Components & Their Sources
Slide 16: Step 1 - Determine Financial Profitability ? ? Data pull directly from GL High‐level product profitability  (Product, Region, Channel) Process that occurs in a matter of  weeks, not months One Version of the Truth One stop‐shop for easy access to  reports and analysis ? ? ? ?? ? Web-based ? • executive • analyst • partner Financial Profitability GL Operations HR Legacy Other
Slide 17: Step 2 - Customer Gross or Direct Profitability Segment customer base: o Define customer  hierarchies ‐ ‐ Customers By Market (e.g., Northeast Region) Customers by Global Customer (e.g., US Walmart) o Identify “top” customers UNILEVER Tier 1 Large National Accounts (i.e., Quick Service Wendy’s) Tier 2 Regional Customers (sales group focus) (i.e., Madison Square Garden) Define product hierarchy: o Categories, Brands, Families, SKUs Identify source systems: o o o Order Management – Open Orders AR Sub Ledger – Invoices and Credit Memos Trade Spending – Discounts, Promotions &  Allowances Bring in all relevant subledger data  that feeds the GL and contains  DIRECT customer and product  information
Slide 18: Step 3 - Allocating Product Specific Costs Some costs are product line specific but NOT customer  specific Examples: o o Consumer Promotions (Mail in Rebates) TV and Media Print Advertising P&L • Allocate product dollars to customers based on products used in geographies targeted Mktg Detail
Slide 19: Step 4 - Unilever’s Approach to Allocating Indirect Costs Group of 20 Allocation Rules Used on any G/L Account 20 Allocation Rules Profit Before Overheads Gross Profit Total MDC Total Overheads Total Mktg Overhead Total Sales Overhead Total General Overhead Total Associated Costs Broker Commissions JV Income Customer Profitability Available Customer Data Siebel PeopleSoft SAP Oracle Data Warehouse Hyperion Essbase
Slide 20: Net Result – Fully Allocated Customer P&L
Slide 21: Dashboard Integration
Slide 22: Ranzal Case Study Custom Analytics – Price Volume Mix Analysis Heinz, LLC Pittsburgh, PA
Slide 23: About Heinz, LLC Global US Based Food Company $2.5 Billion Global Food Company Pittsburgh, PA Corporate HQ Well known brands specializing in Ketchups Condiments Sauces International Focus Includes Soups Beans Pasta
Slide 24: Goals with Price Volume Mix Analysis Management Tool to Support Variance Explanations and Decision Making Process Typically found in CPG organizations, but applicable across a wide range of industries (e.g. anything with volume as a driver of variable line items) Essbase’s Powerful Calculation Engine and Scalability presents perspectives of data never seen before in organization – defining a consistent process & calculation methodology is key
Slide 25: Key Calculations & Process Total Variance = FX + Operational Variance Operational Variance = Vol/Mix + Price Price = CY – PY * CY_vol / PY_vol Vol/Mix = Everything Else Other Breakdowns are possible when looking @ P&Ls Aggregate Results along management hierarchies Order of operations is important! Account for exceptions such as acquisitions and divestitures in year over year analysis Other Metrics: Underlying Volume Growth Applicable to a wide range of industries…
Slide 26: Sample Variance Explanation – Tornado Chart
Slide 27: CPG Price/Volume/Mix Analysis, Trade Spending Full P&L, Thousands od Products PVM Analysis
Slide 28: Ranzal Case Study Operational Planning – Consumer Promotions Unilever HPC Greenwich, CT
Slide 29: About Unilever HPC Unilever Home & Personal Care Division of Unilever North America Focus Corporate HQ – Greenwich, CT Finance areas support various areas of the business, including Sales, Marketing, and Manufacturing Product Marketing around brands such as: Dove Suave Lever Snuggle Wisk
Slide 30: Issues Faced in Consumer Promotion Planning Needed flexibility to add/modify new product Ids Needed ability to interface with other systems for loading data and minimizing manual data entry Needed ability to perform “what if “ analysis Needed ability to produce ad-hoc reports by the user Needed ability to create sophisticated modeling allocations & methodologies
Slide 31: Getting to Vital Expense Detail P&L Mktg Detail
Slide 32: Zoom in on Marketing Custom Detail per Line Item Custom Plans per Expense line - Consumer Promotions - Mktg Research & Development - Advertising Mktg Custom Plans across Brand Variants/Forms Consolidation of Multiple Plan versions
Slide 33: Requirements – Allocations & Custom Groupings Key The ability to budget in separate Budget, Committed and Payment sections The ability to copy and create additional “What if” scenarios for analysis The creation of budgets by Plans, which can be allocated to multiple Brand Variants and Expense Types. An Expense Type can be further allocated to the Brand Variant. The ability to allocate by percentages, dollar amounts, or NPS. The ability to create custom Brand Variant groupings for the purposes of allocation and reporting. The ability to apply “attributes” to Plans, Components, Estimates and Invoices for the purposes of querying, tracking and reporting.
Slide 34: Consumer Promotion Planning Cycle Data Collection Rptg & Analysis Mktg Aggregate
Slide 35: Developing Plans – Step 1 – Data Collection Spreadsht Mktg Data Collection Advertising from Agencies Spreadsht Spreadsht Mktg Research Spreadsht Promotions - Custom Detail accounts Consumer Promotions - 4-4-5Allocation - etc
Slide 36: Data Collection
Slide 37: Data Collection
Slide 38: Developing Plans – Step 2 - Consolidate Aggregate Mktg Across -Accounts -Time -Type -Scenario -Product -and Plans Complex Allocations etc.
Slide 39: Developing Plans – Step 3 – Reporting & Analysis Rptg & Analysis Mktg Access Score Executive Doctors Analysts Charts Reports Spreadsht
Slide 40: Rptg & Analysis
Slide 41: Ranzal Case Study Extending BI – Prototyping & Delivery Analytics Suburban Propane, LLC Whippany, NJ
Slide 42: About Suburban Propane
Slide 43: Suburban Propane BI Environment
Slide 44: Application Development Methodology
Slide 45: Business Scenario
Slide 46: Analytic Data Source - Customer
Slide 47: Prototyping Dimensions in Essbase
Slide 48: Developing Analytical Reports in Web Analysis
Slide 49: Drive Efficiency Changes – Customer Satisfaction
Slide 50: Ranzal Case Study Stand Alone BI – Management Reporting NBA Properties Secaucus, NJ
Slide 51: About the NBA LLC jointly owned by all teams in the league Commissioner appointed as “CEO” of league Each team represented on Board of Governors 1200 League Employees Referees, D-League Players, Corporate Employees Primarily NY/NJ metro, but located globally (NBA China; NBA Japan; NBA Europe) 3-Leagues: NBA, WNBA, NBADL; Conglomerate type organization with many Revenue Streams Similar to a holding company with lots of smaller entities in different lines of business
Slide 52: Issues Faced Data Sources are Fragmented and not synchronized. No one version of the truth in the organization. Much reporting data and content managed in offline Excel spreadsheets by Analysts Analysts spend more time gathering and reconciling data then analyzing it Variety of different tools required to access data out of operational systems IT struggling to meet business needs for reporting and analysis requests.
Slide 53: Proposed Solution Integrated Management Reporting Solution – 5 cubes Game KPI Analysis Financial Analysis Revenue Analysis Labor Analysis Ratings Analysis Integrated Financial Planning Process Linkages to Data Warehouse Metadata Structures Finance, Labor, Revenue, Project Plan Types A Data Warehouse to bring it all together IR Reports for Slowly Changing Dimensions Drill Through Reports
Slide 54: NBA BI Environment Existing Applications 1 Operational Trans Systems • Billings/Bookings • Employee/Payroll • SCM User Access PROD REPTG WEB REPTG 7 DASHBOARDS EXCEL AD HOC FINANCIAL REPTG 2 3 Financial Trans Systems •GL/AR/AP/INV BPM Applications • Hyperion Planning • Workforce Planning 6 4 4 Data Warehouse/Data Marts •EDW •Finance Marts •Operational Marts Data Integration Services •Hyperion Integration Svcs •DIM/ODI Analytical Data Marts •Essbase (ASO/BSO) User Access •Hyperion Analyzer •Hyperion Reports •Interactive Reporting •SmartView / Workspace 5 Data Integration Services 1 OP 1 OP 2 5 3 Planning GL 2 OP …n GL 1 2 6 7 Consolidation Applications GL …n Operations Financials
Slide 56: Closing Essbase is a Best In Class OLAP Server Top 10 Technology in Info Age Article Value Proposition is in its complementary nature to other BI solutions: Deploying Custom Analytical Applications Ease of Use Powerful Speed and Ad-Hoc Capabilities Stand Alone BI with little to no IT involvement Engine behind Financial Performance Management Applications Planning Profitability Management Ranzal consultants are the Essbase experts, and have a proven track record of successful implementations