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SLIDE TRANSITION: In this 21st century, the demands on the office of finance and the CFO continue to mount.
SLIDE TRANSITION: As we all know, the ROLE of the CFO continues to change. It has evolved and expanded over the past decade—requiring CFOsto be more strategic, while still managing the various aspects of your business.
SLIDE TRANSITION: In fact, the role is evolving into the CFO being a catalyst for change.And in order to be a catalyst for change, many CFO’s are increasing their focus on three key areas:Driving Growth – providing accurate guidance to stakeholders re: revenue, expenses and resource allocationManaging Risk – managing fraud, waste, revenue/cost leakageReducing Costs – leveraging existing resources and finding cost effective ways to run the business
SLIDE TRANSITION: The areas of RESPONSIBILITY of the CFO are expandingAt more and more organizations, the CFO is overseeing IT.Taking on the responsibility for IT ensures that IT investments are delivering real value to the organizationA 2012 FEI survey revealed that 45% of CFOs have the IT function now reporting to them—that’s up from 42% last year
SLIDE TRANSITION: The 21st Century CFO Lives at the Nexus of Strategy and TechnologyAnd so the CFO of the 21st Century is now measured on their ability to both implement strategy and leverage technology—and so you now live at the nexus of strategy and technologyTo succeed in today’s volatile business environment, CFOs need to ensure their organizations have agile business processes and systems that enable them to maximize the potential of their resources and deliver the results expected by stakeholdersYou and your team are responsible for implementing these processes and systems—with your new roles and responsibilities, YOU will need to be the catalysts of change
SLIDE TRANSITION: [Tools don’t match up with the new roles and responsibilities]But here’s the problem: the finance organization often doesn’t have the tools to be change agents– and technology is the biggest barrier According to a survey of CFOs, the top barrier to improving the effectiveness of the Finance function is IT systems that are out of date and inflexible (48%)
SLIDE TRANSITION: [Current reality]The day begins with a budget meeting where you’re being asked to make recommendations about where to invest resources—a challenge that CFOs around the world are facing. However, the reality is only40% Can forecast 3 months ahead, and [Click]93% Are using spreadsheets in financial processes
SLIDE TRANSITION: [Oracle lives at the nexus of strategy and technology]That’s where we come in—because, at Oracle, we also live at the nexus of strategy and technology[Click] And our solutions are engineered to work together, which means that you can add new technology seamlessly without having to cobble together a system on your own[Click] 96% of the global fortune 500 are using Oracle to get better resultsNote to speaker: The 96% of Global Fortune 500was based on a comparison of Fortune 500 2012 vs. Oracle customers (GRC, FMS, EPM) approved by Oracle Legal.
SLIDE TRANSITION: [Many of these challenges the CFO deals with every day]So let’s take a glimpse into a typical day in the life of a CFO and how Oracle can not only change your organization, but also your morning, afternoon, and evening
SLIDE TRANSITION: [Morning Schedule & Growth Challenge]Let’s take a look at the morning meetings around driving growth
SLIDE TRANSITION: [Snapshot of meeting today (Budget Meeting)]At this morning meeting with the Financial Planning & Analysis team, it is 5 months into the annual budgeting process and Finance is still negotiating minute details of the budget with the sales organization - sending spreadsheets back and forth with each budget iterationAfter all the time spent on this, the CFO realizes that the budget will be out of date fairly quickly after it’s approved due to rapidly- changing market conditions
SLIDE TRANSITION: [Snapshot of meeting today (Product Profitability Analysis)]In addition, Finance is in discussions with Marketing regarding product profitability and about which products should get increased funding vs. decreased funding in the new fiscal year. Marketing is able to view revenue by product, but has no visibility into the actual profitability of each product line, since overhead and other costs are not allocated down to the product level. So they’re basically making decision blindly.The CFO fears that decisions about which products to continue investing R&D and Marketing resources in and which ones to discontinue are being made without the right level of insight into the true impact on the business.
SLIDE TRANSITION: [Reality of a near impossible job]We know that CFO wakes up to a near impossible jobBeing a change agent requires you to look at ALL the challenges you’re dealing with in their totality, not individuallySo this means you should be evaluating technology from the bigger perspective/picture in totality as wellDealing with these challenges is an every day occurrence for the CFO.
Time – takes too long, missed opportunities and obsolete plansLong simulation times can lead to missed opportunitiesLong planning cycles result in missed plansQuality – data integrity, lack of standardization and communicationLack of standardized financial logic can lead to errors in financial analysisLack of standardized methods and business rulesLack of communication between various areas within the organizationErrors in excel spreadsheetsFlexibility – lack of responsiveness to changesDisconnected processes (strategic, financial, operational) cause changes to be difficult and timelyLimited level of detailCost – many wasted resources, questionable benefitsToo much time spent gathering informationLimited time modeling and analyzing information
Achieving management excellence is all about improving your management processes.But like most organizations, the challenge is that your management processes are not well defined and highly fragmented.The symptoms are that your business is not well aligned, it’s hard to predict your performance and your business decisions are highly inconsistent.Unlike ERP, where you have well defined processes like ‘Order to Cash’ and ‘Procure to Pay’ you have no clear definition of your management processes.But Oracle can change that.[CLICK: NEXT SLIDE]
But what exactly IS Enterprise Performance Management?If you research the topic, consultants, academics and others will often opt to describe attributes of EPM rather than provide a definition of the term itself. Each attribute will give you one piece of the big puzzle, for example EPM provides these features – It is an integrated system, it enables you to access existing data sources and provides built in workflows.
Benefits are another piece of the puzzle. Benefits include being able to subtantially reduce the time it takes to close the books each period, being able to evaluate 1,000’s of scenarios quickly and the ability to eliminate thousands of spreadsheets often used to consolidate financials and report on them.
EPM also addresses business pains such as lacking a single, consistent, and reliable view of information, and the pain of continued reliance on managing by error-prone spreadsheets and even Long budgeting and planning cycles – with static plans
Retail
But WHAT exactly IS Enterprise Performance Management?????(Allow the picture to be revealed). Ok, so EPM not a mountain lion (Cougar or Puma), but it is fast and efficient like an mountain lion!
Oracle’s definition of EPM is that it “is a collection of management disciplines and analytic processes that enable the organization to articulate, monitor and achieve one or more pre-selected goals.” There are other slightly different definitions by analyst firms, consultants and academics, which we will address shortly.
So what characteristics define a world-class EPM system? As was mentioned previously, a world-class EPM system must connect the four disciplines and they should reside on a single platform. This provides excellent communication between the disciplines and enables the use of one data set. It should be able to source and validate data from existing systems such as ERP and CRM and should provide built in work-flows and automated processes to reduce errors and improve efficiencies so that the processes are repeatable and reusable. It must also be able to quickly create thousands of business scenarios to support strategic, operational and financial decision making.World-Class EPM must have a common reporting interface to be able to view results from each of the disciplines in a variety of ways and providea way to interact with the system when indicated to investigate poor scores or unusual numbers, react to red lights, and collaborate with peers about results and initiatives.World-Class EPM must also have dimension management and common data sources enabling organizations to reduce the complexity and cost of maintaining enterprise dimensions, making it easy to change dimensions and hierarchies as the organization changes, and provide one version of the facts.
SLIDE TRANSITION: [New reality – snapshot of meeting in the future (Budget Meeting)]So fast forward, the budget process is now a 6 week process, driven at a summary level and it’s refreshed on a quarterly basis with rolling forecasts submitted by the sales organization. Instead of using spreadsheets, a web-based budgeting, planning and forecasting solution is used to quickly capture key assumptions and rapidly create new scenarios.
SLIDE TRANSITION: [Snapshot of meeting in the future (Budget Meeting)]And as a result, budgeting is much less stressful, line managers are more focused on the quarterly forecast and Finance can provide more accurate guidance to senior management and external stakeholders.[Click] As part of the quarterly analysis and forecasting process, with an improved profitability and cost management system, Finance allocates revenue, as well as direct and indirect expenses down to the individual product line and customer segment.[Click]With fully-loaded P&L’s by product line, Finance and the Product Management teams can make more informed decisions about which products to discontinue, which customer segments to put more focus on, and how best to allocate R&D and Marketing resources in order to hit revenue and profit objectives for the company
SLIDE TRANSITION: Imagine a World… Intelligent finance organizationImagine a world with a finance organization so intelligent that the better part of your day is spent in the CEO’s office mapping out strategy, rather than painfully compiling reports from spreadsheets and disparate data sources
SLIDE TRANSITION: [Imagine a World…]Imagine where a finance organization closes their books in 2 days [Click] and financial results are quickly published to both internal and external stakeholders
SLIDE TRANSITION: Imagine a World…Where a finance organization can accurately forecast results 4 quarters in advance and quickly re-allocate resources to capture new market opportunities
SLIDE TRANSITION: [Reality of a near impossible job]We know that CFO wakes up to a near impossible jobBeing a change agent requires you to look at ALL the challenges you’re dealing with in their totality, not individuallySo this means you should be evaluating technology from the bigger perspective/picture in totality as wellDealing with these challenges is an every day occurrence for the CFO.