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Profitability and Risk Analysis with Essbase

Alain FlochSenior Sales Consulting Manager, BI, Oracle Systems Hong Kong & Taiwan

Agenda

• Analytic Challenges• Introduction to Essbase• Demonstration• Value of Essbase for Profitability and Risk Analysis

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Analytic Challenges

“Not all Questions are Created Equal”

BI Experts Say….

Questions Can be Worlds Apart

What is our performance?

• What are the top 10 markets?

• What is the gap to forecast?

• What customers are most profitable?

• What are revenues by product compared to last year?

• What are sales by product, store and quarter?

• What is the trend for employee-related costs?

• What is our open headcount?

How can we improve performance?

• How can we increase promotional lift by 10% in our major markets?

• What happens to our forecast if the dollar declines by 5% to the Euro?

• What happens to gross margin if our materials costs increase by 20%?

• Which customers drive 80% of our overall profitability?

• What happens to same store sales if inventory turns increase by 5%?

Situational Forward-looking

Distinct BI Solutions Have Addressed What Should be a Seamless Continuum

Ad-Hoc Query& Reporting

Standardized Reporting

AdvancedAnalytics

Modeling

Future Oriented

Operational Static

Strategic Dynamic

Past Oriented

The Business Intelligence Continuum

Which customers spend the most?

What did this customer buy?Which customers are most profitable?

What if demand falls short of forecast?

What if we rolled out this product nationwide?

Will our cash balances take us through this crisis?

What is the Q4 revenue forecast?

Future OrientedPast Oriented

Operational Static

Strategic Dynamic

Modeling

Standardized Reporting

• Dashboards• Publishing• Pixel-perfect

• What-if• Scenarios• Allocations

Diverse Needs in the “BI Pyramid”

AdvancedAnalytics

Ad-hoc Query & Reporting

• Predictive Analytics• Allocations / Aggregations• Set-based Analysis

• Slice and Dice• Parameter-driven• Self-service

BusinessInsight

Gap

Oracle’s Unified BI FoundationMeeting All BI Pyramid Needs

Oracle BI Suite EE Plus

CommonEnterprise Information

Model

• Consistent definitions• Role-based views• Model-driven

• Interactive Dashboards• Ad-hoc query• Report Publishing

Oracle

BI

Applications

Essbase

• What-if• Advanced Analysis• Predictive Analytics

Essbase

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Introduction to Essbase

Highly Scalable BI Foundation

BUSINESS INTELLIGENCE FOUNDATION

Essbase BI Server Real Time DecisionsCommon Enterprise Information Model

EPM Workspace

OLTP & ODSSystems

Data WarehouseData Mart

SAP, Oracle, Siebel,PeopleSoft, Custom

BusinessProcess

OLAP

Fusion Middleware

BI ApplicationsPerformance ManagementApplications

EPM Workspace

ExcelXML

Essbase?

1 Richest Business User Experience

SmartView: Microsoft Office Integration

plus a range of superior reporting tools….

Visual Explorer is not just a slick way to visualize, it’s a slick way to visually analyze.

Wayne Eckerson, Industry Analyst, TDWI

Broadest Analytic functionality

– Drill, pivot, select, compare, rank, sort, filter, group stack, calculate, annotate, write back……..– Reporting tools enabled by the “Outline” – “Maps” to the business

Essbase?

1 Richest Business User Experience

2 Highly Advanced Calculation Engine

Superior Calculation Power

• Widest range of functionality: – Simple aggregations to complex

cross dimensional allocations– Results stored or calculated upon

retrieval– Relationship aware– Application wide or subset specific– Conditional and procedural logic

Comprehensive Library of Functions

• 350+ functions• Simple syntax• Extensible• Single point of

maintenance

Essbase?

1 Richest Business User Experience

2 Highly Advanced Calculation Engine

3 Best Custom Analytic Environment

Optimized Storage

Block

Aggregate

Hybrid

Advanced Relational Access

Forward Looking Applications

“Predictive Analytics… is where Business

Intelligence is going.”

• A spectrum of analyses

– Trending– Forecasting– Scenario modeling– What if testing– Goal seeking– OLAP mining

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Demonstration

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The Value of Essbase for

Profitability and Risk Analysis

Belk Department Stores Inventory Analysis and Store Profitability

Needs

Centrally manage financial data throughout the organization

Expand reporting and analysis to complement Lawson Financials

Eliminate paper based reporting with Web based access

Analysis of merchandizing plans Analysis of inventory levels and

sales opportunities

Headquartered in Charlotte, NC

Largest privately held department store chain in the US

275 stores in 16 states

After

Create monthly and year-to-date financial statements used to drive performance

Take action on key drivers - sales, margins, markdowns, and inventory levels and receipts

Calculate fully loaded store profitability

Turned store managers into expense champions

Belk Department StoresInnovative Retailing for Maximum Performance

“We are able to isolate all of the fixed costs that affect store profitability—the amount of square

footage, capital invested, inventory levels, and other fixed costs. That way, we can rank stores

appropriately,”

“Without Hyperion Essbase, we just couldn’t have performed the analysis we are doing today”

David PalmerVice President, Financial Services

Essbase – Speed of Thought Analytics

• Superior tools for the business user

• Broadest analytic functionality

• “Speed of thought” response

• Superior calculation power

• Comprehensive library of functions

• Extensive financial and time intelligence

• Optimized storage

• Enterprise scale forward looking applications

• Premium performance

Most HighlyAdvanced

CalculationEngine

RichestBusiness User

Experience

Best CustomAnalytic

Environment

AQ&

Customer Profitability in Health Care

Previous attempt

Three day calculation times Additional week to produce reports IT required to maintain rate

changes and calculations Limited insight into customer

profitability

Leading distributor of name-brand medical and surgical supplies – 51 distribution centers in the US

$5.5 billion in revenue (2006)

200,00 SKUs / 20,000 customer accounts

After

Identified top 10 low profit customers in each geography

Profile of each customer now shows operational characteristics as well as programs and services purchased

Developed what-if scenarios providing a roadmap to increased profitability for targeted accounts