1. Implementing Oracle Hyperion
Profitability and Cost Management
in a Professional Services Firm
November 5th, 2012
Pete Cammisa

2. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

3. Presenter Biography
Pete Cammisa, Managing Partner, Innovus Partners, Chairperson OAUGNJ
Two years HPCM consulting experience
Telecom
Insurance
Professional Services
Expertise in technical implementation of Essbase, Planning and HPCM
Deployed over 15 EPM solutions
Primary Application Experience
Profitability & Cost Management Solutions
Budget & Forecasting Solutions
Management Reporting Applications

4. Company Profile – Innovus Partners
Oracle Gold Partner
Oracle Certified Specialists
Based in the NY Tri-State Area
Oracle Hyperion EPM Expertise

5. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

6. Profitability Project Overview
Prepare & Prototype & Build &
Analyze Socialize Rollout
• Assemble team • Create HPCM • Create any
• Gather business application additional Drivers
requirements • Create Drivers • Import all
• Determine data • Import (subset) Assignments
availability Assignments • Import all data
• Design allocation • Import (subset) (cost/rev/driver)
model(s) cost/revenue and • Run model
• Prepare roadmap driver data • Validate data
• Run model • Migrate to Prod
• Validate model • Train users
• Socialize model • Present results to
management

7. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

8. HPCM Product Overview
What is HPCM?
Cost and revenue allocation tool
Flexible in allocation method - TBC / ABC / custom
User driven process
Single point of maintenance
Traceability and audit trail
Essbase or Relational back-end
Integrated into the EPM suite

9. HPCM Product Overview

10. HPCM Product Overview
Stages
A stage provides the definition of a slice of data in the HPCM Model. The Stages are key
building blocks in an HPCM model since the allocations occur from stage to stage (inter stage)
or within a stage itself (intra stage). A Stage in HPCM is made up of up to three (3) dimensions.
An application may contain up to nine (9) stages.
Drivers
Drivers provide the allocation method or formula by which data is allocated from a Source to
a Destination. The HPCM software provides default drivers such as Simple, Even, or
Percentage, while also allowing the user to create unlimited custom drivers to fit their needs.
Assignments
Assignments in HPCM represent the relationships in the data between stages (mappings).
Assignments must be represented by all dimensions in the source stage and all dimensions in
the destination stage. Assignments can be within a stage (intra stage), from stage to stage, or
skip stages, but must always flow downstream.

11. HPCM Product Overview
Assignment Rules
When creating assignments, destinations can be selected one-by-one or by applying
assignments rules. That is to say that for a single source, there may exist multiple
destinations. This method of assigning destinations by using Assignment Rules is usually more
efficient for calculations scripts to generate, calculate, and maintain.
Direct Allocations vs. Genealogy Allocations
Direct allocations occur downstream from stage to stage. They represent data that has a
direct relationship from the source to the destination of the assignment.
Genealogy allocations occur up and down stream. The results of the genealogy allocation
represent data that has an indirect relationship. (i.e. Stage 3 back to Stage 1)

12. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

13. Functional Requirements
For our discussion, the business requires that the solution provide:
Ability to allocate revenue and expense actuals by Account, Department ,
Activity and Client
Ability to drive allocations using metrics such as Headcount and Billed hours
Allocation of “When-reported” rather than “When-worked” revenue data
Ability to report on and analyze revenue and expense allocation detail by
Account, Department, Activity and Client
Ability to provide client-level profitability detail

14. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

15. Design Objectives
Design a solution that will:
Accept data imported from source systems (i.e. GL or HR systems)
Allow for business-specific driver definition
Allow for system or user entry of driver values
Process cost and revenue allocations on a monthly basis
Process cost and revenue allocations by Account, Department, Activity and
Client
Allocate cost and revenue data using Drivers such as Headcount and Billed
hours
Provide end-user reporting for cost and profitability by Account, Department ,
Activity and Client

16. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

17. Technical Design - Overview

18. Technical Design - Dimensionality
HPCM System Dimensions:
Measures
AllocationType
POV Dimensions:
Year
Period
Scenario
Business Dimensions:
Account
Department
Activity
Client

19. Technical Design - Stages
Stage 1 – General Ledger (Department, Account)
This stage represents the data loaded from the General Ledger
Stage 2 – Activity (Activity, Department)
This stage represents data through an Activity “lens”. In our example, Stage 2 receives data
that results from the Stage 1 allocations.
Stage 3 – Client (Client)
This stage represents the end state of the allocations. Once the data reaches this stage, it
should be fully allocated and visible through the client “lens”.

20. Technical Design - Drivers
The profitability solution can use a combination of standard HPCM drivers along
with User Defined Drivers.
HPCM Drivers:
Simple
Even
Percentage
User Defined Drivers
Custom Driver 1
Custom Driver 2

21. Technical Design – Driver Selection
The Driver selection is made at the members of the driving dimension of each Stage.
Exceptions can be defined with members from each dimension of the Source Stage to
define the Driver Selection. Exceptions are less efficiency and more maintenance
intensive and so they should be used sparingly.
• In our application, Department is the driving dimension for Stage 1. A sample Driver
Selection would be at the member “Sales_Marketing”. That Driver would be Even and so the
costs associated with the “Sales_Marketing” Department would be allocated to each
assignment in Stage 2 evenly.
Source Stage Dimension/Member Driver
Stage 1 - General Ledger Sales_Marketing Even
• In our application, Activity is the driving dimension for Stage 2. A sample Driver Selection
would be at the member “EPMConsulting”. That Driver Selection would be Billable Hours
and so the costs associated with the Activity “Consulting” would be allocated to each
assignment in Stage 3 using the Billable Hours Driver.
Source Stage Dimension/Member Driver
Stage 2 - Activity EPMConsulting Billable Hours

22. Technical Design - Assignments
The profitability solution can use a combination of standard Assignments and
Assignment Rules.
• A Standard Assignment is specifically defined by selecting a member from each
dimension in the Source Stage and each dimension in the Destination Stage.
Stage 2 -> Stage 3
S2AT_Department S2AT_Activity S3CL_Client
EssbasePractice Consulting Client100
PlanningPractice Consulting Client100
HFMPractice Consulting Client300
• An Assignment Rule is defined at the Source dimensions and creates assignments
to the Destination Stage based on a set of criteria. That criteria can include
member name, outline relationship, attribute, or a UDA. Assignment Rules are
typically more efficient to process. Their use also reduces maintenance.
Stage 1 -> Stage 3
S1GL_Department S1GL_Account S3CL_Client
Sales_Marketing Sales_Marketing_Expense @RELATIVE(All Clients,0)

23. Presentation Agenda
Presenter Biography
Company Profile
Profitability Project Overview
HPCM Product Overview
Functional (Business) Requirements
Design Objectives
Technical Design
Profitability Solution
Next Steps
Questions

24. HPCM Process Flow

25. Profitability Solution
Stage Balancing Report

26. Profitability Solution

27. Next Steps…
Training, training, and more training
Build a Planning application to collect Driver and Assignment data
Build an interface to support loading the staging tables
Build a reporting application to sit out in front of the HPCM application
reducing dimensionality down to the core dimensions and service end-users
Build Web Analysis views and Financial Reports to distribute data
Integrate results into Driver based planning model

28. Wrap-Up & Questions
Questions
Let’s continue the conversation…
Email me: Pete@InnovusPartners.com, Pete@OAUGNJ.org
Connect on LinkedIn
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Gather knowledge at www.innovuspartners.com/blog