Hyperion Planning Guide for Beginners

8/9/2019 Hyperion Planning Guide for Beginners

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Oracle Hyperion Financial Management11.1.1.3 Beginner’s Guide

Part I

Provided By: BISP Created By: Rupam Majumdarhttp://bispsolutions.wordpress.com Amit Sharma [email protected] BISP Teamhttp://learnhyperion.wordpress.com

http://learnhyperion.wordpress.com/mailto:[email protected]://bispsolutions.wordpress.com/


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Problem and ChallengesMany finance executives face the daunting task of consolidating their

company’s financial and operating results using spreadsheets that are difficult tomaintain and audit. Some are encumbered with custom reporting solutions thatdon’t scale or address global requirements, while others are dependent on generalledger-based approaches that can’t pull data from numerous transactional systemswithout significant IT support. What is needed is a single version of the truth-oneview of financial and operational results integrated from multiple systems -without delays.

Why HFM

PLAN + Powerful FEATURES + Design Considerations + Reporting Tools =

Ø Less confusion Less time

Ø Shorter closes and Transforms data into usable information

Ø Viable WEB delivery mechanisms

Ø Process management for tight control of the review and approval process

Ø Data Validation

Ø Currency translation to support multiple local currencies.

Ø Automatic elimination for intercompany data and transactions.


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Hyperion Financial Management

“Financial Management is a comprehensive, Web-Based application that enablesyou to manage enterprise financial information quickly and cost effectively.Financial Management delivers global data collection, financial consolidation,reporting and analysis in single highly scalable solutions.”

HFM excels at:


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Complex Organizational Consolidation

• Multiple Transactional Currencies

• Intercompany Transactions

• Minority Interest

• Maintaining Historical Representation of Data

• Ability to handle Journals

• Full Audit Trails –

– Data & End User Actions

• External Reporting to Stakeholders


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Product Architecture

Financial Management uses a multitier architecture that includes a client tier, anapplication tier , and a database tier.

The client tier contains the user interface. It communicates with the applicationtier. The primary function of the client tier is to display, enter , and maintain dataand to maintain metadata.

The application tier contains the application, the report, and Web servers. TheWeb server enables you to access the Web-based portions of FinancialManagement. The application server contains the financial intelligence andconnections to the relational database and OLAP engine. It also contains Architect

for managing metadata.The data tier contains the relational databases for Financial Management

metadata and source data.


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Financial Management Overview

Financial Management is a powerful application that enables you to manageenterprise financial information quickly and cost effectively. You follow a typicaltask flow for a monthly financial cycle.

TASK DESCRIPTION

Load and add data To add data to your application by loading it from a fileand by using data forms.

Calculate After enter data, you can run calculation rules topopulate calculated accounts.

Adjust data After you calculate data, you can adjust the data byusing journals that provide an audit trail of youradjustments.

Translate andconsolidate data

After data for individual business units is entered andadjusted, you can translate and consolidate the data.


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Approve data After data is consolidated, you can submit the data forreview and approval.

Lock data After you receive the approval for the submitted data,you can lock the data to prevent further modifications.

Run and publishfinancial reports

You can run reports against the approved data.

With Financial Management we can able to

Ø Conduct in-depth analysis of key performance and operational metrics.

Ø Reduce consolidation and reporting cycle by days or weeks.

Ø Deliver accurate and timely reports to both internal management and externalregulatory bodies.

Ø Discover sources of profitability and cash flow at the company, product, brand,and customer levels.


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Financial Management Components

Financial Management integrates application creation and management in acentralized administration environment.

Ø Single sign-on—Users log on once to Workspace to access Architect, FinancialManagement, and the reporting tools.

Ø Single console for application management and creation—Users create,manage, and deploy applications from Architect. These applications are openedin Financial Management for data retrieval and data output.

Ø Centralized repository of key dimensional elements for different products.Ø Centralized console for controlling data flow between applications.


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Financial Consolidation, Reporting & Analysis

Financial Management enables highly efficient collection and consolidation of datafrom diverse sources. It includes these features:

• Process management for tight control of the review and approval process.• Data validation.• Currency translation to support multiple local currencies.• Automatic eliminations for intercompany transactions.

Financial Management is designed for large-scale, centralized Web deployment.You can use Financial Management to consolidate data from diverse general

ledger systems and locations around the globe.


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SEC – The U.S. Reporting Standard

Principles-based

Ø Does not replace framework requirements

Ø Focus on areas of highest risk of material misstatement to financialstatements

Ø Management flexibility to tailor evaluation process to specific facts andcircumstances

Ø Provides guidance on supporting the assessment

Ø Provides framework for evaluating deficiencies


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THE SEC WORKFLOW


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10K- 10Q

The 10-K explains the company's business activities for the most recent twelve-month operating period. The 10-K, which is required to be filed with the Securitiesand Exchange Commission (SEC) within 90 days of the company's fiscal year end,typically contains more detail than an annual report, such as more thoroughoperating and financial statistics, information on legal proceedings, andmanagement compensation.

Form 100Qs a quarterly version of the 10-K; however, it is less detailed and

generally unaudited. The SEC requires publicly traded companies to file form 10-Q within 45 days of the end of each quarter, except the final quarter, in which the10-K is filed.


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THE REPORT GENERATED

Financial Management Dimensions Dimensions describe an organization’s data and usually contain groups of relatedmembers.Examples of dimensions are Account, Entity, and Period. Financial Managementsupplies eight system-defined dimensions and enables you to populate up to four

custom dimensions that you can apply to accounts. Dimension members arearranged in hierarchies. Upper-level members are called parent members, and amember immediately below a parent member is referred to as the child of a parentmember. All members below a parent are referred to as descendants. The bottom-level hierarchy members are called base-level-members.


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THE POWER OF GOOD DIMENSIONALITY


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Scenario DimensionThe Scenario dimension represents a set of data, such as Budget, Actual, or

Forecast. For example, the Actual scenario can contain data from a general ledger,reflecting past and current business operations. The Budget scenario can containdata that reflects the targeted business operations. The Forecast scenario typicallycontains data that corresponds to predictions for upcoming periods. A Legalscenario can contain data calculated according to legal GAAP format and rules. Youcan define any number of scenarios for an application and define attributes forScenario dimension members, such as the default frequency, the default view, andzero data settings.

Year DimensionThe Year dimension represents the fiscal or calendar year for data. An applicationcan contain data for more than one year. You specify a year range when you createthe application and select a year from the Year dimension to process data.


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Period DimensionThe Period dimension represents time periods, such as quarters and months. Itcontains time periods and frequencies by displaying the time periods in ahierarchy. For example, if the Actual scenario maintains data on a monthly basis,generally 12 periods of data are available for this scenario in a year. FinancialManagement supports years, months, and weeks for the period dimension. It doesnot support days for the dimension.


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Entity DimensionThe Entity dimension represents the organizational structure of the company, suchas the management and legal reporting structures. Entities can represent divisions,subsidiaries, plants, regions, countries, legal entities, business units, departments,or any organizational unit. You can define any number of entities. The Entitydimension is the consolidation dimension of the system. Hierarchies in the Entitydimension reflect various consolidated views of the data. Various hierarchies cancorrespond to geographic consolidation, legal consolidation, or consolidation byactivity. All relationships among individual member components that exist in anorganization are stored and maintained in this dimension. Entities in anorganization are dependent, base, or parent entities. Dependent entities are owned by other entities in the organization. Base entities are at the bottom of theorganization structure and do not own other entities. Parent entities contain one ormore dependents that report directly to them. You define attributes for Entitydimension members, such as the default currency and security class, and tospecify whether the entity allows adjustments and stores intercompany detail.Financial Management Dimensions.


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Value DimensionThe Value dimension represents the different types of values stored in yourapplication, and can include the input currency, parent currency, adjustments, andconsolidation detail such as proportion, elimination, and contribution detail. Forexample, the Entity Currency member stores the value for an entity in its localcurrency. The Parent Currency member stores the value for an entity translatedthe currency of its parent entity.

Account DimensionThe Account dimension represents a hierarchy of natural accounts. Accounts storefinancial data for entities and scenarios in an application. Each account has a type,such as Revenue or Expense that defines its accounting behavior.You define attributes for Account dimension members, such as the account type,the number of decimal places to display, and whether the account is a calculated,consolidated, or intercompany partner account.


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Intercompany DimensionThe Intercompany dimension represents all intercompany balances that exist foran account. This is a reserved dimension that is used in combination with theAccount dimension and any custom dimension. Financial Management can trackand eliminate intercompany transaction details across accounts and entities. Youcan also run intercompany matching reports to view intercompany transactions.


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View DimensionThe View dimension represents various modes of calendar intelligence; forexample, Periodic, Year-to-Date, and Quarter-to-Date frequencies. If you set theview to Periodic, the values for each month are displayed. If you set the view toYear-to-Date or Quarter-to-Date, the cumulative values for the year or quarter aredisplayed.

Custom DimensionsFour custom dimensions are available for analysis of detailed data. You can usecustom dimensions to store additional details associated with accounts, such asproducts, markets, channels, balance sheet movement, or types of elimination. Forexample, custom dimensions could include Product Line, Region, Channel, orCustomers.


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Dimensions You create metadata for applications by defining dimensions. Dimensions

describe your organization’s data. Examples of dimensions are Account, Entity,and Period. The elements that comprise a dimension are called members. Forexample, GrossMargin and TotalRevenues are members of the Accountdimension.


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Dimension HierarchiesMembers of a dimension are arranged in hierarchies. Upper-level members arecalled parent members , and a member immediately below a parent member isreferred to as its child. All members below a parent are referred to as descendants.The bottom-level members of the hierarchy are called base-level members. Theillustration in the slide shows a part of the dimension hierarchy of the Accountdimension. In this hierarchy, the Total Revenues member is a child of GrossMargin. Sales, Other Revenues, Salaries, Total Revenues, and Total Costs are

descendants of Gross Margin. Sales, Other Revenues, and Salaries are base-levelmembers.


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Dimensions and Data

Data is typically entered into base-level members of dimensions and not intoparent members. Values for parent-level members are aggregated from thechildren of the parent-level members. In some cases, data for base-level members

is calculated. For example, the Salaries account member might be a base-levelmember whose value is calculated based on head count and salary rate. In theillustration in the slide, the data values from the base-level members are rolled upto the parent-level members—Total Revenues and Total Costs. Data values fromTotal Revenues and Total Costs are then rolled up to their parent, Gross Margin.


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Financial Consolidation

Consolidation is the period–end process of combining the financial results ofseparate subsidiaries with the parent company to form a single, combined

statement of financial results.

Consolidation is the process of gathering data from descendants and aggregatingthe data to parent entities. Consolidation applying only to Entity dimension.

After loading or entering data into base level entities we run a consolidation for aselected scenario or period to aggregate data throughout the organization.

Steps to perform consolidation


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Before Consolidate

After Consolidate

When you consolidate an entity, the processes are required for the descendants ofthe entity run automatically.

• Calculation rules are run for all descendants of the entity for the period being consolidate and for all prior periods

• If the data for the children & parent entities are in different currencies thedata is translated based on the exchange rate.

• Intercompany transactions between entities are eliminated at their firstcommon parent.

• Data is consolidated from base level entities to parent entities.


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FINANCIAL CLOSING

The financial close process is important to a company as it is the function directlyrelated to producing company financial results for each period end. Restrictingaccess to accounting and reporting applications and establishing clear write-off andreserve policies are examples of financial close process controls. These controls can be preventive or detective in nature .

Financial Close Management Streamline the process of Fast Closing• Analysis of process closing (Closing Fast)• Monitoring Process• Calendar of activities• Single Task List• Automatic Workflow• Ensuring Compliance• Email and calendaring


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(E.g. Outlook)

FCM: different visions of the process Process Monitoring

•Illustrate the current status of all process in a simple and intuitive Dashboardsand reporting the ad-hoc offer a complete and immediate understanding in realtime closing process• Automatically update the states tasks assigned to the process• Highlights that the tasks are risk or delay• Encourage users to improve closing process

Active Financial Close Calendar • Detail all the tasks necessary the closure process accountant• Provides multiple views of workflow process

CalendarTask listGantt

• Customizable for each user

Task Management • Assignment of tasks in most types of function of different processes Milestonetasks• Access and use for each user• Integrates with tasklist systems EPM and EBS (eg AR sub ledger close to GL)• Enables automation of processes complex• Supports management hierarchies processes, dependencies and associations• Activities can be incorporated Systems email / calendar (MS Outlook, others)

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