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Oracle hyperion financial management

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Timothy J. Simkiss, CPA
Timothy J. Simkiss, CPA

Hyperion Financial Management (HFM) is a web-based application that provides global financial consolidation, reporting, and analysis capabilities. It automates complex processes like intercompany eliminations, currency translation, and compliance with accounting standards. HFM streamlines financial close, improves reporting accuracy and transparency, and enables strategic analysis by providing a single version of the truth across the organization.

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Oracle Hyperion Financial Management
Agenda • Introduction – The BizTech Team • The Consolidation Process • What is Hyperion Financial Management? • Hyperion Financial Management Solutions • Summary
Introduction
Quality | Results From Many Completed Implementations
About BizTech • Professional Services Firm – Professional Services firm focused on Oracle applications and technology – Oracle Platinum Partner – Highest Level of certification – Specialized Pillar Partner in BI/EPM, EBS, CRM, and Core Technology – Over 400 successful Oracle implementations over the past 15 years – NY, PA, NJ, VA offices with Regional, Global, and International clients – 100+ Consulting Resources • Centers of Excellence across key solutions and industries – Solutions: Oracle Applications, Technology, BI/EPM, and Managed Services – Industries: Financial, Professional, Business Services; Communications and Media; Manufacturing; Distribution; Public Sector, Government; Healthcare and Life Sciences • BizTech Software Solutions : BizTech Data Integrators, BizTech Insight Accelerators, BizTech Reporting Foundation • Oracle License Reseller
Award Winning Partner  IDC and Oracle expert panel selected BizTech over Thousands of Oracle partners, based on service delivery excellence to our clients  Proven Oracle Experience with the full portfolio of Oracle Solutions Oracle Titan Award Global Implementation Partner
Client-Centric Practice Areas Oracle Applications Oracle Technology and Business Intelligence - Full Portfolio of Oracle Applications Solutions - End to end service offering in BI and EPM - Implementation, Upgrade, Migration - Fully staffed team of Data Architects/DBAs - Since 1990 MPL6 to R12 Experience - Solid experience in RAC, HA, and HS designs - Over 400 successful implementations - Understand full Oracle technology stack Oracle Oracle Applications Technology BI/EPM Clients Managed Oracle Services Software ITO Provider Managed Services and IT Outsourcing Oracle Software Provider - Remote or Onsite services - Full Portfolio of Oracle License Resell - Full portfolio of Oracle Applications and - Helps Clients Optimize License models Technologies - BI Software for the agile enterprise - World-Class Data Center with 24x7 Support - BizTech Data Integrators - Instant capacity, operational focused model - BizTech Insight Accelerators - BizTech Reporting Foundation
The Consolidation Process
Pressure on Finance Departments More Stringent Regulations Mergers & Acquisitions • What can I do to accelerate • How can I ensure new acquisitions reporting as required by statutory are quickly regulations? integrated into my company? • How do I improve transparency, • How can I simplify keeping my accuracy, and auditability? books in synch with re-orgs? Collect Data Calculate & Adjust Report Demand for Growth • How can I improve visibility into overall enterprise performance? • How can I help my managers identify opportunities to improve profitability?
Consolidation At-a-Glance Collect Data Calculate & Adjust Report • Gather from multiple & • Apply FASB and IFRS • Generate financial disparate applications consolidation rules statements, managerial • Store data in a centralized • Perform currency translation & reports, and perform ad repository aggregation hoc analysis
The Consolidation Process • What is Financial Consolidation? – Consolidation in financial accounting is a technique that summarizes a group of companies' financial statements into one. This offers the benefit of viewing the whole group's financial information together to see how all companies are doing combined. – Increasingly, global organizations need to integrate data from multiple transactional systems, transition to new international financial reporting standards, and improve their transparency and regulatory compliance procedures. – Companies use a variety of tools (spreadsheets, emails, pivots and queries) to identify and summarize all business unit activity that interacting with other business units. • This can often mean thousands of transactions, all of which must be identified, reconciled and eliminated! • Elimination – Intercompany elimination refers to the process for removal of transactions between companies included in a group in the preparation of consolidated accounts. – Intercompany transactions (sales, services, transfers) must be eliminated in the parent financial statements otherwise a company could be “double-counting” activity. – However, the process involves a lot of reporting and paperwork for intercompany relationships can be quite complicated. • Data must be reviewed, reconciled and approved before process is complete.
Internal Control Issues By Sub Type # by Major Category Documentation Policies/documentation Issues 141 Anti-Fraud Controls 15 Entity-Level & Anti-Fraud Percentage of Internal Control Controls Compliance Monitoring 20 Issues* by Major Category Control Environment 151 7% Application of GAAP/accounting policies 256 Financial Statement Close Financial statement close process & consolidation 120 9% 27% Process & Disclosure Intercompany accounts/reconciliation 93 Review of significant or unusual transactions 212 Change controls 25 Date protection 23 IT Controls Infrastructure 27 Security/user access 52 Merger Issues Merger/predecessor issues 27 34% Multilocation Considerations International operations & subsidiaries 59 11% Other Other 32 2% Segregation of duties 76 3% Personnel Issues 1% 6% Staffing issues (levels, expertise, training) 157 Accounts payable 26 Documentation Accounts receivable 30 Entity-level & Anti-Fraud Controls Accruals/restructuring costs 50 Financial Statement Close Process & Disclosure Contracts/loans/third-party transactions 75 Significant Account Level Employees’ benefits/pensions 38 IT Controls Inventory management 55 Merger Issues Property, equipment, leases 83 Revenue & billing 79 Multilocation Considerations Tax issues 112 Other * Source: The Ames Research Group (June 30, 2005); Total # Internal Control 2,034 Issues Personnel Issues& Young Center for Business Knowledge analysis by Ernst Significant Account Level
Foreign Currency Translation • How is Consolidation impacted by various currencies? – Businesses may enter into transactions (sales, payments, etc.) in multiple currencies. Each business unit translates these items to its functional currency at an appropriate exchange rate. – The QBU then prepares periodic reports of its position (balance sheet) and activity (income and cash flow statements) in that functional currency. – Per accounting standards, before results are consolidated into the parents GL, foreign currency amounts must be translated (“converted”) from the subsidiary currency into the parent currency. – Different types of transactions must be translated at different rates. • P&L activity (sales, COGs, expenses) must be converted at the AVERAGE monthly rate. • Balance sheet activity (Cash, AR, AP) must be converted at the ENDING monthly rate. – When an item is settled, the difference due to exchange rate movement in the amount accrued and the amount settled is treated as foreign exchange gain or loss in the financials.
Different Accounting Standards • How can different accounting standards worldwide impact foreign currency transactions? • Currently, most US companies with international subsidiaries are required to account for this activity per the standards of GAAP (Generally Accepted Accounting Standards). • However, International Financial Accounting Standards (IFRS) will be required adoption by US Companies by 2014 unless the SEC decides to delay implementation. Similarities Differences Approach IFRS US (Some Examples) Approach IFRS US GAAP (Some Fair Market Fixed Assets Only Examples) GAAP Revaluation & Investments Certain Fixed   Revenue Recognition Assets Extraordinary None Rare   Fair Market (e.g. AR or Items Inventory Consolidation Control 2 Models Valuation) Joint Ventures Proportional Only   Detailed Disclosure OK Equity “Development” Capitalized Expensed   Segment Reporting Fixed Assets Components Unitary Leasing Financing Cap vs.   Chart of Accounts Not Op Mandated Inventory No LIFO LIFO OK   Distinction Between Tax Impairment 1 Step, 2 Step, and External Reversible No Reporting Reversal
Adopting IFRS, leaving GAAP A function of your Dual Reporting Choices 1. Many subsidiaries will retain a GL and subsystems in compliance with either Hyperion • Statutory requirements (foreign subsidiaries) • Regulatory legislation (utilities, financial services, etc.) 2. Hyperion HFM will be the main go-between from legacy GL to financial reporting systems. ERP GL Multi- GAAP Features 1. This is the most likely scenario for US companies. 3. Others will find that their existing GL is quite appropriate, but that they have a few subsystem areas that will require adjustment. 4. Others will require that they need to do something more ERP substantial, for example restructuring their business, up to the Subledgers point of reimplementing
Complicated Consolidations • As you can see, intercompany accounting can be a VERY complicated process! – Due to acquisitions, intercompany activity and foreign currency accounting, getting a real picture of the state of the total business (consolidation) can be challenging. – Compliance with different accounting standards, various reporting and filing methods, disparate general ledgers and multiple currencies can be an accounting and reporting nightmare. – Reviewing, matching, reconciling and accounting for multi-entity, multi-currency intercompany transactions can often slow the monthly close process down by days or even weeks. • In fact, mid-size to larger companies often retain an entire team in the accounting department just to do consolidations! • Using Excel for Intercompany accounting, consolidation and translation is not the answer. – Excel is a great personal productivity tool but is not designed for complex calculations, accounting for multiple lines of business and/or entities or complicated consolidations. – Additionally, Excel spreadsheets do not lend themselves to auditing, process management, version control and approvals. – Companies with millions of dollars in revenue using Excel as their consolidation tool are exposing themselves for errors, deficiencies, or material weakness in internal control.
What is Hyperion Financial Management?
HFM - Simply the Best FEATURES • Multi-Currency Capability • Multi- Dimensionality Features • Automates Intercompany Accounting • Integrates Data from Most GL Systems. • Excel Integration • Enterprise Collaboration BENEFITS  Web interface  Speed & accuracy Financial Reporting  Finance owned Consolidation and  Align entities and divisions Analysis Tool in the  Increased Visibility and Accountability World  Out of the box features improved ROI
Hyperion Financial Management • Oracle Hyperion Financial Management (HFM) is a comprehensive, Web-based application that delivers global financial consolidation, reporting and analysis in a single, highly scalable software solution. • HFM utilizes today's most advanced technology, yet is built to be owned and maintained by the enterprise's finance team. • HFM has financial controls, workflow and best-practices built into the platform to support: – US GAAP and IFRS Reporting ― Sarbanes Oxley (SOX) Compliance – Audit Trails and Activity Logs ― Intercompany Eliminations – Foreign Exchange Translations ― XBRL Capabilities • In addition to the powerful features provided "out of the box", HFM is also highly configurable to support the complex elimination and allocation requirements specific to your organization. • HFM is a finance-owned, IT-supported system that allows your organization to quickly make changes as conditions warrant but tracks those changes to provide transparency and visibility for auditability. • While HFM is a web software application, it also has an add-in with Microsoft Office (called Smartview) which allows users to forecast or budget in Microsoft Excel, an environment comfortable to most finance users.
Expanded Dimensionality Period Period Hyperion Financial Management Hyperion Enterprise View View Scenario Category Year Entity Entity Value Account Account ICP Custom 1 Custom 2 Custom 3 Custom 4 20
HFM Benefits • Enable a More Efficient Process, controlled by Finance – IT not needed for most, if any, aspects of HFM. A tool used for Finance and owned by Finance. – Ensures that all data is integrated and validated prior to review by management. • Automate and improve the timing and efficiency of the month end close. – Increased Dimensionality and Intercompany Process eliminates much of the manual matching and reconciliation process. – Reduce consolidation and reporting cycles by days—or even weeks—simply by eliminating redundant data entry and the need to check and double-check actual results. • Reduced data entry, risk of error and risk of key files located in hard drives or spreadsheets. – Modeling or tracking such a business via linked spreadsheets might work if conditions remained stable, but they don’t. – Constantly modifying a collection of spreadsheets is a particularly complicated, time-consuming process full of workarounds and compromises—the opposite of what’s needed. • Easier financial consolidation – no need for manual uploads, email of files or transferring of files. • Fast calculation performance – most calculations performed in 4 seconds or less • Workflow feature ensures timeliness or user preparation and management review – Email alerts to remind user of deadlines.
Key Capabilities Integrate, Validate, Translate, Consolidate • Use the Financial Data Quality Management (FDM) tool to map and integrate from various GL’s. • Using FDM (formerly known as Upstream), follow the Fish upstream to consolidate and validate data • Manage the workflow and approval of the consolidation process. • Import Foreign Currency rates from established sites to save time and improve accuracy. • Drill through and Drill back into your source data and create journal entries into HFM. • Create control questions manage sections 302 and 404 of SOX
HFM Benefits (Cont.) • Improve transparency and compliance while reducing costs. – Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, electronic filing, and other regulatory requirements) and support disclosure requirements. – Enables companies to automatically generate SEC, XBRL friendly documents. • Perform strategic analysis – Spend less time on processing and more time on value-added analysis of the business including review of performance metrics and other KPI’s. • Deliver a single version of the truth. – Provide a single version of the truth to support financial management and statutory reporting. – No separate versions on different folders, networks or computers. – Topside or adjusting entries are made in HFM. • Easily integrates. – HFM integrates not only with Hyperion products but also with your existing infrastructure. • Quick implementation time maximizes a Company’s Return On Investment – With numerous out of the box features, HFM can often be implemented and utilized in a matter of in weeks • Reduced Administration and stricter security. – Owned by Finance, the Administrator is usually responsible for granting or restricting access.
HFM Platform
Financial Data Quality Management SOURCE SYSTEMS GUIDED WORKFLOW USER INTERFACE DATA EPM PREPARATION EPM Adapters SYSTEMS SERVER • Excel • Prepackaged integration • Hyperion Financial • Data cleansing Management • ERP • Data loading including and transformation supplemental data, line • Hyperion Planning • G/L • Task scheduling item detail • Hyperion Essbase • Flat files • Text and • Dimensional mapping • Hyperion Enterprise • ETL document verification • Data Marts • Oracle eBus archive • Process management • Audit review • Data staging
HFM Architecture The basic FDM process includes six steps: 1. Import source data 2. Validate source data against mapping tables 3. Export source data to a target system 4. Consolidate target system data 5. Validate target system data 6. Review and validate internal financial control Source Systems
Hyperion Financial Management Solutions
Drill-through/Drill back to GL Hyperion Financial Management Oracle EBS Hyperion FDM Oracle Account Analysis and Drill-Down for both Actual and Budget
Hyperion Smart View • Accounts love their Excel and Oracle Understands this! • HFM features Ad-Hoc Analytics via Excel via reports or Drill through/back • Use MS Office to enter, analyze and report on subsidiary data • MS Excel add-in allowing access on or off-line • Users download forms to Excel • Manipulate data just like the full web client • Synchronizes to server when ready to be updated.
Flexible Reporting Options Dashboards Financial Reports •Web-based, interactive reporting and analysis tool. • Web-based production report writer for producing highly formatted •Easy to create via drag and drop – no help needed from IT. reports such as Financial Statements. •Useful for Execs and Analysts alike • Reports are easily developed and maintained by business •Flexible “slice & dice”, Traffic lighting, Ranking/Sorting capabilities. • Reports can combine data, graphs, text, and images . •Can display non-financial metrics with financial data. • Flexible output options: HTML, PDF, and hardcopy. • Reports can be batched into books and automated to meet monthly, quarterly, and yearly reporting requirements. Smart View Smart Space Enables business users to quickly and easily connect to Hyperion •The first gadget-based user interface designed specifically for Enterprise Planning using Microsoft Office® tools (Excel, Power Point, Word, Performance Management Outlook) for analysis and reporting. •Consists of a set of configurable gadgets that run on the desktop Allows users to view, import, manipulate, distribute and share data in providing continuous access to financial, operational and performance Microsoft Excel, Word, and PowerPoint interfaces related information. Reports and Dashboards can be easily incorporated into PowerPoint •Includes a secure instant messaging system for shared decision making. presentations and Word documents. Create once and quickly refresh to review the latest information.
HFM, Fusion Edition New Features • New Equity Pick-up Module • Phased Submissions Enhancements • Intercompany Transaction Enhancements • Oracle BI Publisher Templates for System Reports • Extended Analytics Creation of Flat Files • Extended 64 Bit Platform Support • Drill-through to Oracle EBS Financials via FDM • Oracle Data Integrator Support
Addressing Compliance Needs SARBANES-OXLEY REQUIREMENT FINANCIAL MANAGEMENT Section 302 – CEO/CFO must certify Submissions contain audit trail Section 404 – Internal control report Mandatory review/approval procedures Section 401 – Conditions for use Multiple organization hierarchies and of non-GAAP financial measures chart of accounts U.S. auditing standards Autonomy from transaction systems Accelerated reporting Web solution, I/C reconciliation, journals IAS/IFRS REQUIREMENT FINANCIAL MANAGEMENT Global Standard, Convergence IFRS, Multi-GAAP, and local statutory Recognition and measurement Custom dimensions; financial intelligence, journals with audit trail Consolidation and reporting Segment reporting, specialized currency, inter-company, disclosures
Summary
Summary Why Choose Oracle Hyperion Financial Management? • Improve – The Financial Close Process by days or even weeks – Consolidation and Acquisition Accounting best practices – Turnaround time for providing Financial Results to Chief Decision Makers • Enhance – ROI with quick implementation time and numerous out of the box features. – Visibility into subsidiary operating results – Ability to analyze and gauge results through improved performance metrics • Reduce – Audit and compliance costs through improved transparency – Manual Controls, processing times and data reconciliation – Errors, data entry, control risk, reporting times, departmental overload • Refine – Intercompany accounting and reconciliation process – Foreign currency transactions and translation process – Financial Consolidation and reporting features
Why Choose BizTech “Every company claims they deliver quality at a good price, why is BizTech the superior choice…” • Oracle Platinum Partner • Client First Philosophy • Focused Mission • Proven Methodology and Process Orientation • Simple to engage and do business together • Encompassing Ethics and Integrity • Balanced Leadership Team • Focused on YOUR industry area for over a decade
Choose | The Right Approach BizTech RapidApp Methodology
RapidApp Methodology  BizTech leverages our proven methodology, RapidApp, on every engagement – Phases  Break the project into smaller, more manageable, sections of work  Allow for “planned pauses” & overlap – Tasks & Actions  Areas of concentration within a phase  Not all will be performed on every project – Deliverables  Formal work products requiring review and acceptance  “Controlling” documents – Policies & Procedures  Project planning, progress tracking  Status reporting  Project scope definition and management  Formal acceptance of deliverables
RapidApp Methodology The two most critical concerns for a successful implementation: PROVEN EXPERIENCED APPROACH PRACTITIONERS Prepare Configure Test Deploy Prepare D End User Initial Planning Accelerator Magic Test Scripts Training Prepare Prepare D Setup Test/ Setup Production Environment CRP Scripts System Testing Define Project D Conference Room User Acceptance Launch Project Pilots Testing Go Live! Superuser Go/No Go Post-Go Live Accelerator Prep Training Decision Support Project Mgmt, Quality Assurance, Knowledge Transfer
RapidApp (cont.) Phase 1: Prepare • In the Prepare phase, our objective is to build your project mission and definition. We will build a roadmap and framework for the entire project. • We define the scope and terms; identify people and resources, milestones and targets. • We work with your project team to establish and communicate expectations for the project and perform baseline Oracle training. – All implementation strategies are explored and decided upon during this phase. • We will establish the base line technical infrastructure that will be necessary to complete the project. – All of these elements are the basis for developing your project plan. At the end of the prepare phase, the deliverables include: • A definition of Scope, Objectives & Approach that will guide the project. • A RapidApp WBS that outlines all tasks as well as a resource plan. • A Quality Plan for all phases and deliverables.
RapidApp (cont.) Phase 2: Configure • In the Configure phase, you’ll establish the boundaries of your project. • We will work with your team to capture your functional requirements and translate those requirements into a technical design. The technical design becomes the foundation against which we develop the data warehouse, ETL and dashboards. • The conference room pilot at the end of the Configure phase will be the point at which we validate that the develop solution matches the defined requirements. At the conclusion of the configure phase, you will have: A definition of Scope, Objectives & Approach that will guide the project. • Application Functional Design specification document(s) • Application Technical Design specification document(s) • Conference Room Pilot Scripts that were used to validate the system • A working non-production environment (data warehouse, ETL, dashboards and reports)
RapidApp (cont.) Phase 3: Test • You’re going live soon, and we’re helping you prepare. We’re with you to update and configure the final system configuration. • We’ll help you conduct system testing to ensure a smooth transition into production. • We’ll also help you determine a training approach for your end users, design training material and a training environment, and conduct the training, if requested. At the end of the test phase, the deliverables include: • Documented Test Scripts that you used to test the system • A complete end user training approach ready for rollout including Training Guides • A fully tested, production-ready system. .
RapidApp (cont.) Phase 4: Deploy • Your Oracle solution is live. As you make the transition, we can remain with you in a support role, helping to troubleshoot, teaching you how to maximize the value of your new system, and identifying any new opportunities to continue with the transformation to an e-business company. At the end of this phase, you will have: • A System Configuration Document • A Production Software Infrastructure Summary • A Deployment Plan • Stopped doing your business processes in your legacy system. • Moved all project support activities to your production support team. • Trained your end users.
RapidApp: The Value Proposition • Allows organizations to realize immediate cost savings through an accelerated implementation. • Establishes a budget conscious methodology that deploys functionality to satisfy core functional requirements. • Promotes the selection, inclusion, and customization of additional functionality through additional discovery after your product is implemented. • Facilitates a phased approach in which knowledge transfer is conducted whereby clients assume ownership of future project phases; reducing dependency on external services and associated costs. • Utilizes pre-built, customizable templates (models, forms, reports and business logic) reducing development cycles and project cost.
ALA Delivery Resource Model Leveraging the Architect – Lead – Associate model yields higher productivity at lower cost, which: • Maximizes value over traditional team approach • Minimizes risk of single threaded SME approach Architect The Architect designs the solution, and is interacting with the work stream leads to ensure implementation approach is optimal. Lead The Leads are Subject Matter Experts, responsible for client interactions, requirements, ensuring Associates execute the work plan tasks and validates solution. Associate The Associate may be on-site or remote, executes the work plan tasks, unit test, and provides completed work to Lead for testing. Adds 3rd shift productivity to team.
Contact Information Stephen Goldsmith BI Practice Director (610)592-0600 SGoldsmith@Biztech.com Timothy Simkiss, CPA, MBA Hyperion Project Manager Practice Director (610)592-0600 TimSimkiss@Biztech.com

More Related Content

Oracle hyperion financial management

  • 2. Agenda • Introduction – The BizTech Team • The Consolidation Process • What is Hyperion Financial Management? • Hyperion Financial Management Solutions • Summary
  • 4. Quality | Results From Many Completed Implementations
  • 5. About BizTech • Professional Services Firm – Professional Services firm focused on Oracle applications and technology – Oracle Platinum Partner – Highest Level of certification – Specialized Pillar Partner in BI/EPM, EBS, CRM, and Core Technology – Over 400 successful Oracle implementations over the past 15 years – NY, PA, NJ, VA offices with Regional, Global, and International clients – 100+ Consulting Resources • Centers of Excellence across key solutions and industries – Solutions: Oracle Applications, Technology, BI/EPM, and Managed Services – Industries: Financial, Professional, Business Services; Communications and Media; Manufacturing; Distribution; Public Sector, Government; Healthcare and Life Sciences • BizTech Software Solutions : BizTech Data Integrators, BizTech Insight Accelerators, BizTech Reporting Foundation • Oracle License Reseller
  • 6. Award Winning Partner  IDC and Oracle expert panel selected BizTech over Thousands of Oracle partners, based on service delivery excellence to our clients  Proven Oracle Experience with the full portfolio of Oracle Solutions Oracle Titan Award Global Implementation Partner
  • 7. Client-Centric Practice Areas Oracle Applications Oracle Technology and Business Intelligence - Full Portfolio of Oracle Applications Solutions - End to end service offering in BI and EPM - Implementation, Upgrade, Migration - Fully staffed team of Data Architects/DBAs - Since 1990 MPL6 to R12 Experience - Solid experience in RAC, HA, and HS designs - Over 400 successful implementations - Understand full Oracle technology stack Oracle Oracle Applications Technology BI/EPM Clients Managed Oracle Services Software ITO Provider Managed Services and IT Outsourcing Oracle Software Provider - Remote or Onsite services - Full Portfolio of Oracle License Resell - Full portfolio of Oracle Applications and - Helps Clients Optimize License models Technologies - BI Software for the agile enterprise - World-Class Data Center with 24x7 Support - BizTech Data Integrators - Instant capacity, operational focused model - BizTech Insight Accelerators - BizTech Reporting Foundation
  • 9. Pressure on Finance Departments More Stringent Regulations Mergers & Acquisitions • What can I do to accelerate • How can I ensure new acquisitions reporting as required by statutory are quickly regulations? integrated into my company? • How do I improve transparency, • How can I simplify keeping my accuracy, and auditability? books in synch with re-orgs? Collect Data Calculate & Adjust Report Demand for Growth • How can I improve visibility into overall enterprise performance? • How can I help my managers identify opportunities to improve profitability?
  • 10. Consolidation At-a-Glance Collect Data Calculate & Adjust Report • Gather from multiple & • Apply FASB and IFRS • Generate financial disparate applications consolidation rules statements, managerial • Store data in a centralized • Perform currency translation & reports, and perform ad repository aggregation hoc analysis
  • 11. The Consolidation Process • What is Financial Consolidation? – Consolidation in financial accounting is a technique that summarizes a group of companies' financial statements into one. This offers the benefit of viewing the whole group's financial information together to see how all companies are doing combined. – Increasingly, global organizations need to integrate data from multiple transactional systems, transition to new international financial reporting standards, and improve their transparency and regulatory compliance procedures. – Companies use a variety of tools (spreadsheets, emails, pivots and queries) to identify and summarize all business unit activity that interacting with other business units. • This can often mean thousands of transactions, all of which must be identified, reconciled and eliminated! • Elimination – Intercompany elimination refers to the process for removal of transactions between companies included in a group in the preparation of consolidated accounts. – Intercompany transactions (sales, services, transfers) must be eliminated in the parent financial statements otherwise a company could be “double-counting” activity. – However, the process involves a lot of reporting and paperwork for intercompany relationships can be quite complicated. • Data must be reviewed, reconciled and approved before process is complete.
  • 12. Internal Control Issues By Sub Type # by Major Category Documentation Policies/documentation Issues 141 Anti-Fraud Controls 15 Entity-Level & Anti-Fraud Percentage of Internal Control Controls Compliance Monitoring 20 Issues* by Major Category Control Environment 151 7% Application of GAAP/accounting policies 256 Financial Statement Close Financial statement close process & consolidation 120 9% 27% Process & Disclosure Intercompany accounts/reconciliation 93 Review of significant or unusual transactions 212 Change controls 25 Date protection 23 IT Controls Infrastructure 27 Security/user access 52 Merger Issues Merger/predecessor issues 27 34% Multilocation Considerations International operations & subsidiaries 59 11% Other Other 32 2% Segregation of duties 76 3% Personnel Issues 1% 6% Staffing issues (levels, expertise, training) 157 Accounts payable 26 Documentation Accounts receivable 30 Entity-level & Anti-Fraud Controls Accruals/restructuring costs 50 Financial Statement Close Process & Disclosure Contracts/loans/third-party transactions 75 Significant Account Level Employees’ benefits/pensions 38 IT Controls Inventory management 55 Merger Issues Property, equipment, leases 83 Revenue & billing 79 Multilocation Considerations Tax issues 112 Other * Source: The Ames Research Group (June 30, 2005); Total # Internal Control 2,034 Issues Personnel Issues& Young Center for Business Knowledge analysis by Ernst Significant Account Level
  • 13. Foreign Currency Translation • How is Consolidation impacted by various currencies? – Businesses may enter into transactions (sales, payments, etc.) in multiple currencies. Each business unit translates these items to its functional currency at an appropriate exchange rate. – The QBU then prepares periodic reports of its position (balance sheet) and activity (income and cash flow statements) in that functional currency. – Per accounting standards, before results are consolidated into the parents GL, foreign currency amounts must be translated (“converted”) from the subsidiary currency into the parent currency. – Different types of transactions must be translated at different rates. • P&L activity (sales, COGs, expenses) must be converted at the AVERAGE monthly rate. • Balance sheet activity (Cash, AR, AP) must be converted at the ENDING monthly rate. – When an item is settled, the difference due to exchange rate movement in the amount accrued and the amount settled is treated as foreign exchange gain or loss in the financials.
  • 14. Different Accounting Standards • How can different accounting standards worldwide impact foreign currency transactions? • Currently, most US companies with international subsidiaries are required to account for this activity per the standards of GAAP (Generally Accepted Accounting Standards). • However, International Financial Accounting Standards (IFRS) will be required adoption by US Companies by 2014 unless the SEC decides to delay implementation. Similarities Differences Approach IFRS US (Some Examples) Approach IFRS US GAAP (Some Fair Market Fixed Assets Only Examples) GAAP Revaluation & Investments Certain Fixed   Revenue Recognition Assets Extraordinary None Rare   Fair Market (e.g. AR or Items Inventory Consolidation Control 2 Models Valuation) Joint Ventures Proportional Only   Detailed Disclosure OK Equity “Development” Capitalized Expensed   Segment Reporting Fixed Assets Components Unitary Leasing Financing Cap vs.   Chart of Accounts Not Op Mandated Inventory No LIFO LIFO OK   Distinction Between Tax Impairment 1 Step, 2 Step, and External Reversible No Reporting Reversal
  • 15. Adopting IFRS, leaving GAAP A function of your Dual Reporting Choices 1. Many subsidiaries will retain a GL and subsystems in compliance with either Hyperion • Statutory requirements (foreign subsidiaries) • Regulatory legislation (utilities, financial services, etc.) 2. Hyperion HFM will be the main go-between from legacy GL to financial reporting systems. ERP GL Multi- GAAP Features 1. This is the most likely scenario for US companies. 3. Others will find that their existing GL is quite appropriate, but that they have a few subsystem areas that will require adjustment. 4. Others will require that they need to do something more ERP substantial, for example restructuring their business, up to the Subledgers point of reimplementing
  • 16. Complicated Consolidations • As you can see, intercompany accounting can be a VERY complicated process! – Due to acquisitions, intercompany activity and foreign currency accounting, getting a real picture of the state of the total business (consolidation) can be challenging. – Compliance with different accounting standards, various reporting and filing methods, disparate general ledgers and multiple currencies can be an accounting and reporting nightmare. – Reviewing, matching, reconciling and accounting for multi-entity, multi-currency intercompany transactions can often slow the monthly close process down by days or even weeks. • In fact, mid-size to larger companies often retain an entire team in the accounting department just to do consolidations! • Using Excel for Intercompany accounting, consolidation and translation is not the answer. – Excel is a great personal productivity tool but is not designed for complex calculations, accounting for multiple lines of business and/or entities or complicated consolidations. – Additionally, Excel spreadsheets do not lend themselves to auditing, process management, version control and approvals. – Companies with millions of dollars in revenue using Excel as their consolidation tool are exposing themselves for errors, deficiencies, or material weakness in internal control.
  • 17. What is Hyperion Financial Management?
  • 18. HFM - Simply the Best FEATURES • Multi-Currency Capability • Multi- Dimensionality Features • Automates Intercompany Accounting • Integrates Data from Most GL Systems. • Excel Integration • Enterprise Collaboration BENEFITS  Web interface  Speed & accuracy Financial Reporting  Finance owned Consolidation and  Align entities and divisions Analysis Tool in the  Increased Visibility and Accountability World  Out of the box features improved ROI
  • 19. Hyperion Financial Management • Oracle Hyperion Financial Management (HFM) is a comprehensive, Web-based application that delivers global financial consolidation, reporting and analysis in a single, highly scalable software solution. • HFM utilizes today's most advanced technology, yet is built to be owned and maintained by the enterprise's finance team. • HFM has financial controls, workflow and best-practices built into the platform to support: – US GAAP and IFRS Reporting ― Sarbanes Oxley (SOX) Compliance – Audit Trails and Activity Logs ― Intercompany Eliminations – Foreign Exchange Translations ― XBRL Capabilities • In addition to the powerful features provided "out of the box", HFM is also highly configurable to support the complex elimination and allocation requirements specific to your organization. • HFM is a finance-owned, IT-supported system that allows your organization to quickly make changes as conditions warrant but tracks those changes to provide transparency and visibility for auditability. • While HFM is a web software application, it also has an add-in with Microsoft Office (called Smartview) which allows users to forecast or budget in Microsoft Excel, an environment comfortable to most finance users.
  • 20. Expanded Dimensionality Period Period Hyperion Financial Management Hyperion Enterprise View View Scenario Category Year Entity Entity Value Account Account ICP Custom 1 Custom 2 Custom 3 Custom 4 20
  • 21. HFM Benefits • Enable a More Efficient Process, controlled by Finance – IT not needed for most, if any, aspects of HFM. A tool used for Finance and owned by Finance. – Ensures that all data is integrated and validated prior to review by management. • Automate and improve the timing and efficiency of the month end close. – Increased Dimensionality and Intercompany Process eliminates much of the manual matching and reconciliation process. – Reduce consolidation and reporting cycles by days—or even weeks—simply by eliminating redundant data entry and the need to check and double-check actual results. • Reduced data entry, risk of error and risk of key files located in hard drives or spreadsheets. – Modeling or tracking such a business via linked spreadsheets might work if conditions remained stable, but they don’t. – Constantly modifying a collection of spreadsheets is a particularly complicated, time-consuming process full of workarounds and compromises—the opposite of what’s needed. • Easier financial consolidation – no need for manual uploads, email of files or transferring of files. • Fast calculation performance – most calculations performed in 4 seconds or less • Workflow feature ensures timeliness or user preparation and management review – Email alerts to remind user of deadlines.
  • 22. Key Capabilities Integrate, Validate, Translate, Consolidate • Use the Financial Data Quality Management (FDM) tool to map and integrate from various GL’s. • Using FDM (formerly known as Upstream), follow the Fish upstream to consolidate and validate data • Manage the workflow and approval of the consolidation process. • Import Foreign Currency rates from established sites to save time and improve accuracy. • Drill through and Drill back into your source data and create journal entries into HFM. • Create control questions manage sections 302 and 404 of SOX
  • 23. HFM Benefits (Cont.) • Improve transparency and compliance while reducing costs. – Helps reduce the cost of compliance (as stipulated by the Sarbanes-Oxley Act, electronic filing, and other regulatory requirements) and support disclosure requirements. – Enables companies to automatically generate SEC, XBRL friendly documents. • Perform strategic analysis – Spend less time on processing and more time on value-added analysis of the business including review of performance metrics and other KPI’s. • Deliver a single version of the truth. – Provide a single version of the truth to support financial management and statutory reporting. – No separate versions on different folders, networks or computers. – Topside or adjusting entries are made in HFM. • Easily integrates. – HFM integrates not only with Hyperion products but also with your existing infrastructure. • Quick implementation time maximizes a Company’s Return On Investment – With numerous out of the box features, HFM can often be implemented and utilized in a matter of in weeks • Reduced Administration and stricter security. – Owned by Finance, the Administrator is usually responsible for granting or restricting access.
  • 25. Financial Data Quality Management SOURCE SYSTEMS GUIDED WORKFLOW USER INTERFACE DATA EPM PREPARATION EPM Adapters SYSTEMS SERVER • Excel • Prepackaged integration • Hyperion Financial • Data cleansing Management • ERP • Data loading including and transformation supplemental data, line • Hyperion Planning • G/L • Task scheduling item detail • Hyperion Essbase • Flat files • Text and • Dimensional mapping • Hyperion Enterprise • ETL document verification • Data Marts • Oracle eBus archive • Process management • Audit review • Data staging
  • 26. HFM Architecture The basic FDM process includes six steps: 1. Import source data 2. Validate source data against mapping tables 3. Export source data to a target system 4. Consolidate target system data 5. Validate target system data 6. Review and validate internal financial control Source Systems
  • 28. Drill-through/Drill back to GL Hyperion Financial Management Oracle EBS Hyperion FDM Oracle Account Analysis and Drill-Down for both Actual and Budget
  • 29. Hyperion Smart View • Accounts love their Excel and Oracle Understands this! • HFM features Ad-Hoc Analytics via Excel via reports or Drill through/back • Use MS Office to enter, analyze and report on subsidiary data • MS Excel add-in allowing access on or off-line • Users download forms to Excel • Manipulate data just like the full web client • Synchronizes to server when ready to be updated.
  • 30. Flexible Reporting Options Dashboards Financial Reports •Web-based, interactive reporting and analysis tool. • Web-based production report writer for producing highly formatted •Easy to create via drag and drop – no help needed from IT. reports such as Financial Statements. •Useful for Execs and Analysts alike • Reports are easily developed and maintained by business •Flexible “slice & dice”, Traffic lighting, Ranking/Sorting capabilities. • Reports can combine data, graphs, text, and images . •Can display non-financial metrics with financial data. • Flexible output options: HTML, PDF, and hardcopy. • Reports can be batched into books and automated to meet monthly, quarterly, and yearly reporting requirements. Smart View Smart Space Enables business users to quickly and easily connect to Hyperion •The first gadget-based user interface designed specifically for Enterprise Planning using Microsoft Office® tools (Excel, Power Point, Word, Performance Management Outlook) for analysis and reporting. •Consists of a set of configurable gadgets that run on the desktop Allows users to view, import, manipulate, distribute and share data in providing continuous access to financial, operational and performance Microsoft Excel, Word, and PowerPoint interfaces related information. Reports and Dashboards can be easily incorporated into PowerPoint •Includes a secure instant messaging system for shared decision making. presentations and Word documents. Create once and quickly refresh to review the latest information.
  • 31. HFM, Fusion Edition New Features • New Equity Pick-up Module • Phased Submissions Enhancements • Intercompany Transaction Enhancements • Oracle BI Publisher Templates for System Reports • Extended Analytics Creation of Flat Files • Extended 64 Bit Platform Support • Drill-through to Oracle EBS Financials via FDM • Oracle Data Integrator Support
  • 32. Addressing Compliance Needs SARBANES-OXLEY REQUIREMENT FINANCIAL MANAGEMENT Section 302 – CEO/CFO must certify Submissions contain audit trail Section 404 – Internal control report Mandatory review/approval procedures Section 401 – Conditions for use Multiple organization hierarchies and of non-GAAP financial measures chart of accounts U.S. auditing standards Autonomy from transaction systems Accelerated reporting Web solution, I/C reconciliation, journals IAS/IFRS REQUIREMENT FINANCIAL MANAGEMENT Global Standard, Convergence IFRS, Multi-GAAP, and local statutory Recognition and measurement Custom dimensions; financial intelligence, journals with audit trail Consolidation and reporting Segment reporting, specialized currency, inter-company, disclosures
  • 34. Summary Why Choose Oracle Hyperion Financial Management? • Improve – The Financial Close Process by days or even weeks – Consolidation and Acquisition Accounting best practices – Turnaround time for providing Financial Results to Chief Decision Makers • Enhance – ROI with quick implementation time and numerous out of the box features. – Visibility into subsidiary operating results – Ability to analyze and gauge results through improved performance metrics • Reduce – Audit and compliance costs through improved transparency – Manual Controls, processing times and data reconciliation – Errors, data entry, control risk, reporting times, departmental overload • Refine – Intercompany accounting and reconciliation process – Foreign currency transactions and translation process – Financial Consolidation and reporting features
  • 35. Why Choose BizTech “Every company claims they deliver quality at a good price, why is BizTech the superior choice…” • Oracle Platinum Partner • Client First Philosophy • Focused Mission • Proven Methodology and Process Orientation • Simple to engage and do business together • Encompassing Ethics and Integrity • Balanced Leadership Team • Focused on YOUR industry area for over a decade
  • 36. Choose | The Right Approach BizTech RapidApp Methodology
  • 37. RapidApp Methodology  BizTech leverages our proven methodology, RapidApp, on every engagement – Phases  Break the project into smaller, more manageable, sections of work  Allow for “planned pauses” & overlap – Tasks & Actions  Areas of concentration within a phase  Not all will be performed on every project – Deliverables  Formal work products requiring review and acceptance  “Controlling” documents – Policies & Procedures  Project planning, progress tracking  Status reporting  Project scope definition and management  Formal acceptance of deliverables
  • 38. RapidApp Methodology The two most critical concerns for a successful implementation: PROVEN EXPERIENCED APPROACH PRACTITIONERS Prepare Configure Test Deploy Prepare D End User Initial Planning Accelerator Magic Test Scripts Training Prepare Prepare D Setup Test/ Setup Production Environment CRP Scripts System Testing Define Project D Conference Room User Acceptance Launch Project Pilots Testing Go Live! Superuser Go/No Go Post-Go Live Accelerator Prep Training Decision Support Project Mgmt, Quality Assurance, Knowledge Transfer
  • 39. RapidApp (cont.) Phase 1: Prepare • In the Prepare phase, our objective is to build your project mission and definition. We will build a roadmap and framework for the entire project. • We define the scope and terms; identify people and resources, milestones and targets. • We work with your project team to establish and communicate expectations for the project and perform baseline Oracle training. – All implementation strategies are explored and decided upon during this phase. • We will establish the base line technical infrastructure that will be necessary to complete the project. – All of these elements are the basis for developing your project plan. At the end of the prepare phase, the deliverables include: • A definition of Scope, Objectives & Approach that will guide the project. • A RapidApp WBS that outlines all tasks as well as a resource plan. • A Quality Plan for all phases and deliverables.
  • 40. RapidApp (cont.) Phase 2: Configure • In the Configure phase, you’ll establish the boundaries of your project. • We will work with your team to capture your functional requirements and translate those requirements into a technical design. The technical design becomes the foundation against which we develop the data warehouse, ETL and dashboards. • The conference room pilot at the end of the Configure phase will be the point at which we validate that the develop solution matches the defined requirements. At the conclusion of the configure phase, you will have: A definition of Scope, Objectives & Approach that will guide the project. • Application Functional Design specification document(s) • Application Technical Design specification document(s) • Conference Room Pilot Scripts that were used to validate the system • A working non-production environment (data warehouse, ETL, dashboards and reports)
  • 41. RapidApp (cont.) Phase 3: Test • You’re going live soon, and we’re helping you prepare. We’re with you to update and configure the final system configuration. • We’ll help you conduct system testing to ensure a smooth transition into production. • We’ll also help you determine a training approach for your end users, design training material and a training environment, and conduct the training, if requested. At the end of the test phase, the deliverables include: • Documented Test Scripts that you used to test the system • A complete end user training approach ready for rollout including Training Guides • A fully tested, production-ready system. .
  • 42. RapidApp (cont.) Phase 4: Deploy • Your Oracle solution is live. As you make the transition, we can remain with you in a support role, helping to troubleshoot, teaching you how to maximize the value of your new system, and identifying any new opportunities to continue with the transformation to an e-business company. At the end of this phase, you will have: • A System Configuration Document • A Production Software Infrastructure Summary • A Deployment Plan • Stopped doing your business processes in your legacy system. • Moved all project support activities to your production support team. • Trained your end users.
  • 43. RapidApp: The Value Proposition • Allows organizations to realize immediate cost savings through an accelerated implementation. • Establishes a budget conscious methodology that deploys functionality to satisfy core functional requirements. • Promotes the selection, inclusion, and customization of additional functionality through additional discovery after your product is implemented. • Facilitates a phased approach in which knowledge transfer is conducted whereby clients assume ownership of future project phases; reducing dependency on external services and associated costs. • Utilizes pre-built, customizable templates (models, forms, reports and business logic) reducing development cycles and project cost.
  • 44. ALA Delivery Resource Model Leveraging the Architect – Lead – Associate model yields higher productivity at lower cost, which: • Maximizes value over traditional team approach • Minimizes risk of single threaded SME approach Architect The Architect designs the solution, and is interacting with the work stream leads to ensure implementation approach is optimal. Lead The Leads are Subject Matter Experts, responsible for client interactions, requirements, ensuring Associates execute the work plan tasks and validates solution. Associate The Associate may be on-site or remote, executes the work plan tasks, unit test, and provides completed work to Lead for testing. Adds 3rd shift productivity to team.
  • 45. Contact Information Stephen Goldsmith BI Practice Director (610)592-0600 SGoldsmith@Biztech.com Timothy Simkiss, CPA, MBA Hyperion Project Manager Practice Director (610)592-0600 TimSimkiss@Biztech.com

Editor's Notes

  1. Key Message: IFRS and US GAAP are similar in many waysThere are quite a few similarities between IFRS and US GAAP because the convergence project between IASB and FASB (the standards setters responsible for IFRS and US GAAP respectively) has been going on for a while (since 2003 actually).For example, both IFRS and US GAAP have the same rules around revenue recognition. German GAAP on the other hand does not have revenue recognition; instead you would book your sales invoices directly.
  2. Now, many customers that fall into the “mainstream” timeline may think they have plenty of time; however, one size does not fit all when it comes to adopting IFRS.The 3 bullets listed, reflects points on a spectrum and many customers will be in between the 3 or may have one subsidiary that falls within in 1 situation, but another that falls in another.In general, Oracle’s ERP solutions support all of these situations.Accounting compliance consultants to evaluate what’s most appropriate for your industry, country and organization.