Integrated Operations Planning

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Transcript of Integrated Operations Planning

Oracle Integrated Operational PlanningProduct Awareness TrainingHari Sankar VP, EPM Products

Agenda

Business planning challenges Integrated business planning

Oracle Solution Integrated Operational Planning overview Customer success

Competition Positioning & Selling Summary Key Takeaways

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

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The Business Planning ProblemThe Finance-Operations Disconnect Finance divorced from operational reality Simplistic operational models and drivers One way communication with operations No way to calculate operational feasibility of the plan leading to missing the forecast

Operations misaligned with financial goals Detailed models to drive execution, not to dialogue with finance Simplistic financial linkages No way to evaluate financial impact of operational plan leading to adverse financial results

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

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Todays Integrated Planning ProcessBlood, Sweat and ExcelFinancial PlanningLong-Term Financial Planning Treasury Management Financial Planning & Budgeting Working Capital Planning Profitability Management Performance Scorecards

Demand Management

Customer Management

Human Resources Planning

Supply Planning

Product Performance Management

Logistics Planning

Functional Operational Planning ERP System

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

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Integrated Business PlanningBridging the Finance-Operations DisconnectFinancial PlanningLong-Term Financial Planning Treasury Management Financial Planning & Budgeting Working Capital Planning Profitability Management Performance Scorecards

Operational Modeling

Integrated Impact Analysis

Financial Performance Modeling

Demand Management

Customer Management

Human Resources Planning

Supply Planning

Product Performance Management

Logistics Planning

Functional Operational Planning ERP System

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

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What the analysts are saying

Integrated business planningfills the gap between the strategic and financial planning handled by corporate performance management suites and operational planning focused on the supply chain.Tim Payne & Nigel Rayner, Gartner Inc, Oct 2007

What for decades has been a financial budget exercise to manage expenses has morphed to a continuous, integrated business planning process that aligns the entire business toward operational and financial excellence.John Hagerty, AMR Research, Nov 2007

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

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Oracle Integrated Operational PlanningEnabling Integrated Business PlanningHyperion Strategic Finance Long Term Planning Corporate Development Treasury Management Value Management Integrated Operational PlanningInventory Exposure Modeling Integrated Margin Planning Call Center Operations Planning Key Materials & Capacity Modeling

Hyperion Planning Annual Budgeting Periodic Forecasting Capital Expense Planning Workforce Financial Planning

Financials

Human Resources

CRM

SCM

Manufacturing

Only Oracle integrates

Operational planning to assess feasibility of financial plans Corporate finance to link operations to capital allocation and financing decisions7

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

What is Integrated Operational Planning1 Business planning layer complementing functional planning systems Rough-cut modeling appropriate for business decision making Replaces patchwork of spreadsheet models Integrated cross-functional planning models Captures financial targets and operational constraints in a single framework Integrated business impact analysis Interactive what-if scenario analysis Transparent planning models with business user control Enables iterative planning and decision making 1 2 3

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3

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Enabling An Iterative Planning Process

Finance Review Plan Exceptions Evaluate Alternatives

Analyze critical gapsbetween financial and operational plans

Create what-if scenarioson plan revisions Rough-cut modeling Resolve constraints Assess Business Impact

Update Plan of Record

Approve plan revisions Submit plan changes back toplanning and execution systems

Compare impact ofalternatives on key financial and operational metrics

Marketing

Sales

Supply Chain

Manage collaboration Assess cross-functional impactCopyright 2008, Oracle and / or its affiliates. All rights reserved.

Enable fast decision-making Perform interactive scenario analysis9

Integrated Planning Drives Key RequirementsNeed for Core Technology Innovation1. Modeling of operational constructs Rich expressiveness in modeling & calculation logic Complex dependencies, relationships, transformations Declarative calculations, not scripted

2. Rapid analysis of cross-functional impact Change anywhere, analyze everywhere Evaluate financial desirability & operational feasibility Interactive response times

3. Robust analytic transaction framework Scenario management & change isolation Reconciliation of concurrent plan changes System of record for plan changes: audit trails

1 2 3

1 2 3

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

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Solution ArchitecturePurpose-Built for Integrated PlanningPlanning, Analysis and Reporting

Application and Process Layer Impact Analyzer Scenario Manager Federated Modeling

Change-Based Data Modeling EngineData Feeds Plan Updates

ERP / Functional Planning Applications

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

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Analyze Financial and Operational ImpactPlan Revisions Supported by Fact-based Decisions Model plan revisions in familiar Excel environment Review financial metrics and operational constraints Assess impact of plan revisions interactively

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

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Operational Cost ManagementKey Business Challenge Today Escalation of raw materials prices Rising transportation and energy costs Financial Impact Substantial COGS variability Price revisions & Product mix shiftsFinance-led initiatives around operational cost management

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

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Oracle IOP: Extending Financial Planning WithOperational Cost ModelingFinancial Plan Revenue Cost of Goods Sold Gross Margin High-level assumptions Standard costs No operational detail Annual adjustments Operational Model Raw Material Costs Labor Costs Transportation Costs Capacity Utilization Product Mix Granular Pricing Detailed cost drivers Bill-of-Materials modeling Time-phased calculations Multiple adjustments per month

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

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Proven Value in Key Industries

High Tech and Electronics

Discrete and Industrial Manufacturing

Consumer Goods

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

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Competition

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

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The Difference: Change-Based Data ModelingAdjacent Solutions Key Capabilities ModelingDemand/Supply modeling Algorithmic optimization Financial linkage

Point Competitors Steelwedge, Kinaxis

Supply Chain

BI

Integrated Operational Planning

Limited Limited

Scenario AnalysisData & model scale Rapid what-if analysis

Limited

Business User ControlTransparent models User control of models

Limited

Process ManagementProcess workflow Root cause analysis

Limited

SAPWhat they will lead with... SAP Sales & Operations Planning x-app What their key messages are... Out-of-the-box planning solution for SAP ERP customers SAP integration, Fast deployment, Rapid time-to-value

Strengths Good first demo & story Easy path for installed base looking to address S&OP needs you cant go wrong choosing SAP

Weaknesses Operations centric, Lacks capabilities for financial plan alignment Lacks interactive what-if analysis for decision support largely a reporting and workflow layer Planners will continue in Excel hell for analysis and decisions Cant address specific operational planning problems like product allocations, key materials planning etc.

Cognos / IBMWhat they will lead with... Cognos Sales & Operations Planning Blueprint What their key messages are... Out-of-the-box template with pre-built analytic models for sales and operations planning Pre built integration, Fast deployment, Rapid time-to-value

Strengths Perception of packaged application Good first demo & story Easy path for installed base you already have it, no need to look elsewhere

Weaknesses Lack of depth in operational models Doesnt scale with real-world data and models Lack of real reference customers Cant address specific operational planning problems like cost & margin mgmt, product allocations, key materials planning etc.

Positioning & Selling

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

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Solution Positioning

Configurable solution