Can Oracle’s Hyperoll acquisition really help companies compress and bend time?
The art and science of EPM continues to get more exciting by the day – or should I say – by the acquisition – the most recent being Oracle’s announcement on September 29th, 2009 on their latest - Hyperoll. I’m still excited about Golden Gate joining the Oracle solution portfolio, but this is beginning to turn into a real game changer, not just for Oracle and their competitive position in the world of EPM and BI, but for those companies that deploy these new capabilities to bend and compress time.
Say what? Bend and compress time? Is this all crazy talk?
Not really if we focus our conversation on the time it takes companies to close their financials. From a financial perspective, HyperRoll provides the capabilities to shorten the close cycle, as well as, free up access to the management data caught up during the consolidation process.
Announcement from the Oracle site:
“On September 29, 2009, Oracle announced it has agreed to acquire certain assets of HyperRoll. HyperRoll is a leading provider of financial reporting acceleration solutions with interactive reporting capability to support complex data calculation requirements. Oracle Enterprise Performance Management (EPM) already enables rapid, accurate and secure financial consolidation and reporting. With the addition of HyperRoll’s reporting acceleration technology, customers are expected to be able to execute a faster financial close.
HyperRoll’s employees are expected to join Oracle, and will bring domain expertise in multi-dimensional technologies and algorithms for large scale financial and business intelligence systems.”
Lifted from the HyperRoll site:
“The Securities and Exchange Commission (SEC) has enacted rules that have shortened the deadlines for financial reporting for publicly traded companies. But without the appropriate reporting infrastructure, the financial close process can be delayed significantly. Why? If revenue, balance sheet, and profit and loss reports take hours or days to run, companies will not have the necessary visibility into financial data to keep the close process moving quickly.
HyperRoll makes timely financial close reporting possible. HyperRoll provides lightning-fast access to financial data, reducing batch processing times by up to 90% and increases the availability of information by 10s to 100s of times – which means information in seconds, not hours. “
What’s not mentioned in the latest Oracle press release is just as exciting – HyperRolls real-time capabilies to improve operations, supply chain, demand chain, customer service, etc.
I’m sure we’ll hear more about HyperRoll at the upcoming Oracle Open World, but meantime, I’ve got my experts at P3 Solutions working at light speed to incorporate these new capabilities into our EPM and BI Practice.
Subscribe to the comments for this postUsing Margin, Profitability, and Cost Management to Dodge Bullets - Oracle’s New PCM and IMP Apps
This week the earnings reports are beginning to show signs of economic recovery, and the stock markets are rewarding those companies that were able to show signs of either improvement in profits, or results less bad than expected. Like Neo in The Matrix, dodging bullets for these companies meant cutting costs quickly, adjusting their operations to match the drop-off in demand, and improving their cash positions.
If you want to stay on top, be prepared to deal with more bullets.
Here’s how using the latest tools from Oracle.
- Profitability and Cost Management - Continue to trim costs; if you’ve already found the low hanging fruit you should consider using some advanced analytic tools that go way beyond ERP reports and Excel spreadsheets and focus on the drivers of profitability and cost to help you answer questions including;
- What is the profitability of each customer and product?
- Who are the most profitable?
- Which products have higher margins?
- How much does it cost to serve customers?
- What is the total cost of producing the products?
- Margin Planning - the ability to predictably manage margins and the cost of goods sold (COGS) can have a direct and significant impact on the bottom line. Understanding how changes to COGS elements such as materials, labor, and transportation costs can impact margins, managers and analysts in finance and operations are able to proactively manage margins in the face of extreme variability related to cost and revenue drivers. For example:
- How will the anticipated shifts in demand across products and regions affect revenues and margins?
- What will be the impact of variability in material costs on product costs and margins?
- How does a proposed product allocation scheme impact our revenues and margins? Is it in line with customer service targets?
- What feasible choices are available for us to make up a projected revenue shortfall?
- If we decide to prune non-performing SKUs, what is the inventory exposure at global facilities?
Both Oracle’s Profitability and Cost Management (PCM) and Integrated Margin Planning (IMP) applications were designed specifically to deploy quickly using pre-defined models that help enterprises address these issues. They are both new in Oracle’s portfolio and are what I consider to be some of their most exciting!
For more information on either of these applications, please feel free to reach out to me.
Oracle Financial Analytics - seeing the forest for the trees
How often have we used the term "can’t see the forest for the trees" in an effort to simplify our discussions on how EPM and/or BI can enable a business, yet somehow we still fail to see the point?
That’s because it’s easy to fall into two common traps, the first, and easiest of which is a deep dive into the methodologies, technical aspects, and feature function comparisons usually reserved for the more technically focused IT folks. Due to the consistently changing nature of technology, this conversation will never end.
The other view is a high level abstract around the virtues of how EPM can drive better shareholder value, greater insight in operations, a more agile organization, and yaddy yaddy yaddy. This is a view often shared with executives - which is nice for about 10 minutes before someone asks for some specific, concrete examples.
Like most folks, I want to see EPM and BI being used in a real-life scenarios. However, next to visiting another company, I think this on-line demo of Oracle Financial Analytics a very good alternative and a great starting point to see both the forest and the trees for yourself.
Oracle Financial Analytics Demo
Interested in hearing your thoughts…
Using an EPM Maturity Model to build a roadmap for winning
Today, it’s no longer adequate for companies to focus only on their enterprise systems (Oracle, SAP, PeopleSoft, etc.) for ways of improving operating efficiency or processes.
As a former Hackett-Certified Advisor, we found no shortage of benchmarked companies where improving SG&A by one quartile could yield a 5 to 9% improvement (based on total revenues) directly to the bottom line. There are similar returns and efforts involved in working capital improvement initiatives, as well. While these transformational improvement opportunities continue to be true for many companies, it takes time, and lots of it to begin to deliberately move an organization from one quartile to the next. More time than many companies currently have the luxury of taking.
So how does this fit into an Enterprise Performance Management (EPM) Maturity Model?
Here’s an analogy…When you want to turn a horse, your only need to turn his head, and the 2,000 pound body follows.
EPM is the head of your organization, the processes, measurements, and technologies that link your strategy (where you want to turn) to your organization and operations. It’s also the key to finding where quick improvement opportunities are to be found.
This EPM Maturity Model is a guide to understand at a high level where EPM fits within an organization including Culture and Organization, Core Processes, and Technology. Comparing these subject areas across four dimensions - Marginal, Planned, Aligned, and Transformational, we get a starting point for areas of improvement and the beginnings of a transformational roadmap.
For more information on our complete EPM Maturity Model , please contact us.
Meanwhile, when it comes to EPM this is an economic race you want to win, place, or show - but not lose!
EPM Research on U.S.A. State of the Art
Recently carried out by the Cranfield School of Management, and sponsored by the world’s largest enterprise software company Oracle, the report finds that many global enterprises are struggling to capitalise on the full value of enterprise performance management (EPM). No surprise there - but what really captured my attention were the survey questions and how they might be used to structure an initial dialog with the executive team in building an effective EPM strategy.
The research is structured using an evidence based management model to understand how data transforms over time to add value to an organization. At each set of the data evolution, from data to information to knowledge to insight and finally value, there are specific questions that companies can ask themselves to gauge their EPM capabilities and relative maturity.
Data to Information
- Are we measuring the right things correctly and do we have a way to deliver this information to the right people in a timely and consistent way?
Information to Knowledge
- How are we engaging all levels of the organization and are we measuring, to control, learn or both?
Knowledge to Insights
- Will we use EPM to validate our current strategies and assumptions?
Insights to Value
- How will we measure and define success - internally, externally, or both?
The sample size for the study was 1,500 companies in the US, and the results from the questions shouldn’t be of any surprise. I recommend it for the questions and insights they were able to draw from the study. What’s missing is a deeper dive into an EPM maturity model where we can look at the best practices of those companies that are well on their evolutionary way to gaining value from insight, or more importantly, how do the benefits from EPM position a enterprise to compete in today’s global and new normal economy?
Oracle IOP - An Integrated Approach to Sales & Operations Planning (S&OP)
It easy to turn cash into inventory, it’s becoming harder to turn it back into cash…
Today, more than ever, it is critical for companies to have the right products in the right place at the right time to achieve order fill rate objectives, quality objectives, and achieve the lowest material cost. At the same time, today’s economic pressures have increased management’s focus to maximize working capital and inventories without missing demand opportunities.
To accomplish this balance, management needs to be confident forecasts are accurate, achievable, and accountable by all S&OP planning stakeholders. They need a timely, concensus-based forecast that can be revised quickly, and shared by the team. At the same time, they know that all of this must be achieved while reducing the cost and time it takes to create and manage forecasts.
Today, most companies use a combination of systems, spreadsheets, and processes resulting in multiple versions of numbers and units measured in different ways - Finance, Sales, Operations, PLM, etc, Timely collaboration is difficult at best. However, leading companies are discovering that by leveraging an integrated S&OP system and processes, they are able increase forecast accuracy, reducing the time and cost in creating forecasts, while being flexible enough to meet changing business requirements. One such system (and one of Oracle’s best keep secrets) is called Oracle Integrated Operations Planning - or IOP for short.
The reason why IOP addresses today’s S&OP challenges is because it integrates directly with both Financial and Operational systems and offers a common integrated planning platform for collaboration where forecasts can be quickly and automatically be used by demand-side, supply-side and financial planning systems. This makes collaboration during the S&OP forecast creation easier so that consensus can be reached quickly.
The first questions that come up, is how is IOP different, or why do I need it if I’m already using Hyperion for planning, and/or Demantra for demand forecasting? The simple answer is this - IOP does not replace those products - in fact, both are superior for their respective task in financial and operations planning. What’s missing is the ability to use a common collaboration platform for a single source of truth that Sales, Finance and Operations can all have access and provide input to.
IOP has the ability to receive forecast input directly from forecast sources (internal and external customers), and automatically passes it to planning where it is reviewed and revised. When planning is finished revising the forecast, they approve it and automatically pass it to either and ERP or dedicated planning system.
The approved forecast is automatically made available to everyone involved in creating and maintaining the forecast. Selected individuals in the forecasting and planning process can configure the forecast parameters, assumptions, metrics, and approval process. IOP provides tools for routine and analytical reporting.
IOP uses a solution architecture designed around Oracle’s EPM, Supply Chain Planning, and the Business Intelligence Enteprise Edition platform, using open standard interfaces and tools.
Today - what CXO doesn’t want a rapid time to benefit?
The time to enter forecasts is dramatically reduced because forecast input comes directly from the source (internal and external customers). Forecast accuracy is improved by making it easier to enter the forecast and providing tools to measure forecast accuracy.
Everyone now has the tools they need to collaborate and to do extensive forecast and planning analysis and reporting. This results in having the right material at the right time to achieve maximum customer service levels at lower costs.
If you would like more information on Oracle’s IOP offering and ways to improve your S&OP processes, please feel free to send me an email.
Total Cost of Ownership (TCO)
What is Total Cost of Ownership (TCO)?
Total Cost of Ownership should adhere to the following fundamental principles:
- Calculating ALL the costs of building, supporting, and enhancing a system.
- Looks at costs across the entire lifetime of the system. The standard is 3 - 5 years.
- Includes system related costs from across the organization, NOT just costs borne by the IT Department.
What is not included?
- Revenue or margin increases
- Business cost savings
- Opportunity cost
These are all ROI concepts and will be covered elsewhere.
When do You Perform a TCO Analysis?
- As part of the cost justification phase
- When competitors, including internal build, have been identified, and you know is budget
- When displacing an incumbent perceived as relatively successful
- When you have decided to implement the project and want to minimize the total costs
When is it premature to do a TCO?
- The scope of the project is still in flux
- You cannot decide, at a reasonable level, what to include
- There is indecision as to whether to do the project
What costs are included?
- Software Licenses, including BI Tools, ETL, DBMS, Web Server
- Implementation, including Design, Construction, Testing, and Documentation
- Training, including development and delivery to end users, end user support staff, IT, and IT support staff
- Hardware, including Servers, Clients, Disk, Communications
- Hardware and Software Maintenance
- Support, including End User Support and Data Center costs
- Enhancement costs, including new reports, data, or derived metrics
- Upgrade implementation costs when BI, ETL, or OLTP changes