Future of Financial Management:Strategic Planning and compliance
Transcript of Future of Financial Management:Strategic Planning and compliance
Future of Financial Management:Strategic Planning and
compliance/Oracle Financial Management Solutions
Agenda
• Overview Enterprise Planning
• Solution Overview
• Delivering World Class Enterprise Planning
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Overview Enterprise
Planning
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Forecast/model strategic possibilities
Select strategies
Set targets
Seed targets to annual operating plan
Start annual process
Evaluate Financial Performance
Update strategic plan with latest forecast
Evaluate resource and capital requirements
Strategic planAnnual
budget / plan
Include operational
details
Evaluate workforce and capital
Monthly / rolling
forecast
Evaluate ‘true’
profitability
Achieve a World Class Enterprise Planning
Process
Assess and Manage Risk
Include operational detail and model variability of financial plan
Update forecast with latest budget and actuals
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Disconnected Processes Lead to
Inefficiency and Missed Targets
• 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
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FP&A
Senior Management
Annual Plan & Forecast
Revenue & Cost Models
M&A
Departmental Plans
Headcount Plans
Treasury Plans
Long-Term Planning
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Solution Overview
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Oracle EPM Connects Management
Processes
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Common Integration & AnalysisData Quality and Consistent Dimensions
Common Reporting & Interaction
Strategic Planning
Financial Close
Planning & Forecasting
Profitability Management
Critical Components to Implement Planning Best Practices
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Capital AssetsPlanning
Workforce Planning
Long-Term Financial Planning
FinancialDetail
OperationalDetail
Predictive Modeling & Simulation
OperationalRevenue & Cost
Modeling
Planning, Budgeting & Forecasting
Functional Plans
ProjectPlanning
MarketingPlanning
Key CapabilitiesAccelerate the Enterprise Planning Process
• Centralized system
• Align top-down and bottom-up
• Consistent assumptions
• Common allocations &
calculations
• Integrated Operational Planning
to address in-depth revenue and
margin planning
• Purpose-built Capital Assets and
Workforce planning modules for
fast deployment
• Powerful workflow and process
management for budgeting and
forecasting
• Leverages Essbase – powerful
reporting and analysis
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Forward-looking Analytic EngineFast and Simple with Essbase
Powerful Calculator• Hundreds of built in functions and algorithms
• Trending
• Goal seeking
• Procedural calculations
Financial Intelligence• Critical for Variance Analysis, understands better /
(worse)
• Essbase understands Financial Data and Calculations
• Time Balances
Time Intelligence• Time Series calculations are hard to do
• Yet, an extremely common BI requirement
• Essbase makes it very easy at any level, any dimension, for any type of calendar
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Delivering a World Class
Enterprise Planning
Process
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Best Practices For a World Class Enterprise
Planning Process
1 Measure financial impact of business strategies
3 Evaluate impact on workforce and capital assets
5 Manage risk and uncertainty
2 Include operational detail and model variability of financial plan
4 Adjust the forecast continuously
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• Evaluate strategic projects and initiatives
• Simulate effects of M&A
• Optimize capital structure
• Review impact on financing strategies
• Set annual targets
1 Measure the financial impact of key business strategies
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Long-term Planning, Corporate Development
and Treasury in a Single Model
• Integrated financial
statements
• Project shareholder value
• Run unlimited scenarios
• Consolidate multiple
business combinations
• Evaluate strategic projects
• Simulate effects of M&A
• Debt Scheduling
• Optimize capital structure
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Investment Analysis Tools
• Pre-built valuation logic
(NPV, IRR, etc.)
• Purchase accounting for
acquisitions
• Goal-Seek
• Movable Deal Period
• Include/Exclude option
• Fiscal year-end conversion
• Divestiture logic
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Treasury Toolkit
• Calculates net cash
surplus or deficit from
multiple models and
scenarios
• Funding Options tool to
re-allocate surpluses and
fund deficits
• Debt scheduler
• User-defined reports to
monitor covenants, credit
ratings, and earnings per
share
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2 Include operational detail and model variability of financial plan
• Validate key financial drivers based on operational
details
• Accountability from operations and finance
• Continuous validation throughout the planning and
forecasting cycles
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3 Evaluate the resource impact on workforce and capital assets
• Incorporate the appropriate level of detail in the
enterprise planning process
• Ensure you have the right amount of workforce
staffed
• Ensure you allocate the right amount of capital
required
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Assess Resource and Capital Assets
Requirements
Workforce Plan
Financial Plan
Capital Plan
Detailed Headcount, Staff Expenses, Salary &
Compensation
Detailed Depreciation, Asset Purchase/Sell,
Asset Expenses
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Hyperion Capital Expense PlanningImprove Planning the Acquisition, Lifecycle Management, and
Retirement of Capital Assets
• Packaged solution
• Customizable
• Plan for asset purchases
and asset related expenses
• Transfer, retire, and
improve assets
• Directly linked to main plan
• Interfaces with external
systems
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Hyperion Workforce PlanningImprove Headcount, Salary and Compensation Planning
• Packaged solution for quick
implementations
• Plan salary and other
compensation at any level
• Add, edit and delete
employees and new hires
• Pre-defined or custom
calculations for taxes, etc.
• Integrates actuals
from HR systems
• Test scenarios in real-time
for impact analysis
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4 Adjust the forecast continuously
• Adjust the forecast continuously by incorporating a
monthly or rolling forecasting process
• Incorporate ‘event based’ planning in order to react to
change in economic and environmental changes
• Apply best practices and a world class process in
order to respond timely
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Updated Forecasts Based on Current
Conditions
• Continuous forecasts (rolling,
event based)
• Manage budget process and
workflow with validations
• Top-down and bottom-up
• P&L, B/S and C/F
• Business Unit, Department
and Cost Center level
• Revenue and cost allocations
• Driver-based planning
• Workforce planning
• Capital asset planning
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5 Manage risk and uncertainty in your plans
• Move from ‘conventional’ to ‘advanced’ scenario
modeling
• Review full range of outcomes
• Quantify the risk of not achieving your goals
• Know the probability of outcomes
• Understand key factors impacting your business
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Quantify Risk and Uncertainty
• Only 3 possible outcomes
• Limited view of risk
• What are most important risk factors?
• What are the odds I’ll miss the target?
• Which outcome is most likely?
• Full range of outcomes
• Illustrate probability of outcomes
• Immediate visibility into inherent risk
• True risk analysis for financial models
ConventionalSingle Point Scenarios
AdvancedThinking in Ranges
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Best Practices For a World Class Enterprise
Planning Process
1 Measure financial impact of business strategies
3 Evaluate impact on workforce and capital assets
5 Manage risk and uncertainty
2 Include operational detail and model variability of financial plan
4 Adjust the forecast continuously
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Critical Components to Implement Planning Best Practices
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Capital AssetsPlanning
Workforce Planning
Long-Term Financial Planning
FinancialDetail
OperationalDetail
Predictive Modeling & Simulation
OperationalRevenue & Cost
Modeling
Planning, Budgeting & Forecasting
Functional Plans
ProjectPlanning
MarketingPlanning
Improved Accuracy, Flexibility and Costs
• Increase planning and
forecasting accuracy
• Flexibility to respond to
market changes timely
• Reduce costs by
allocating resources to
the most important
opportunities
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Annual Plan & Forecast
Revenue & Cost Models
Long-Term Planning
FP&A
Senior Management
Most Complete Suite of
Operational BI Applications
Travel
& TransAuto
Comms
& Media
Complex
Mfg
Consumer
SectorEnergy
Financial
Services
High
Tech
Insurance
& HealthLife
Sciences
Public
Sector
Other Operational & Analytic Sources
Oracle BI Suite Enterprise
Prebuilt adapters:
Sales
Service &
Contact
Center
MarketingOrder
Management
& Fulfillment
Supply
ChainFinancials
Human
Resources
PipelineAnalysis
TriangulatedForecasting
Sales Team Effectiveness
Up-sell / Cross-sell
Cycle TimeAnalysis
Lead Conversion
Employee Productivity
Compensation Analysis
HR Compliance Reporting
WorkforceProfile
TurnoverTrends
Return on Human Capital
A/R & A/PAnalysis
GL / BalanceSheet Analysis
Customer& Product
Profitability
P&L Analysis
ExpenseManagement
Cash FlowAnalysis
Supplier Performance
Spend Analysis
Procurement Cycle Times
Inventory Availability
EmployeeExpenses
BOM Analysis
OrderLinearity
Ordersvs. Available
Inventory
Cycle TimeAnalysis
BacklogAnalysis
FulfillmentStatus
CustomerReceivables
Campaign Scorecard
Response Rates
Product Propensity
Loyalty andAttrition
Market Basket Analysis
Campaign ROI
Churn Propensity
Customer Satisfaction
ResolutionRates
Service RepEffectiveness
Service CostAnalysis
ServiceTrends
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