Enterprise Performance Management Event for Financial Service Industries

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2 Enterprise Performance Management Event for Financial Service Industries Gain Competitive Advantages through successful Enterprise Performance Management Moscow, Jann Tadorian Managing Partner Mobile:

3 Key Take Aways of Event What is Enterprise Performance Management and what are its key components How can Oracle/Hyperion Software support EPM How can you execute your strategy in a pragmatic way with the Balanced Scorecard methodology Hyperion Strategic Finance for Strategic Financial Loan Management with Oracle and Hyperion Strategic Finance 3 3

4 Agenda Part I Introduction to Inplenion Overview Enterprise Performance Management (EPM) The Enterprise Performance Management Framework Q&A 4 4

5 Introduction to Inplenion 5 5

6 Jann Tadorian Position CO-Founder and Managing Partner Inplenion Business Consulting Intl. Education Master of Business Administration; Master of Information Management Experience 15+ years professional experience in the field of performance management Various positions in both consultancy and software companies Experienced project manager and - coach Course instructor Automating the Balanced Scorecard at University Industries: Financial Service Industry, Telecommunication and Life Science Skills Advisory, Coaching, Project Management and Management Training Conception and implementation of EPM solutions Strategy Management, Corporate Finance and Risk Management 6 6

7 Inplenion Business Consulting International International consulting company headquartered in Switzerland and main offices in Zurich, Geneva, Frankfurt, Vienna, Dubai and Jeddah Over 90 management years of experience in the field of Enterprise Performance Management (EPM) & Business Intelligence (BI) Bridging Business & IT and transforming client s EPM/BI initiatives into reality Over 60 new clients in Consulting and Solution implementation in the past 4 years Complete EPM/BI Services Portfolio (Consulting, Implementation, Training and Support) Selected as the Oracle partner of choice for Hyperion Modules across EMEA 7 7

8 Competences Controlling & performance management solutions Consolidation and financial reporting Analysis / planning & forecasting / operational reporting Value based management and Balanced Scorecard Conceptional work & project management Analysis of business needs and requirements Design of EPM solutions Project lead and coaching Implementation of Oracle EPM/BI products Oracle/Hyperion Financial Management Oracle/Hyperion Planning /Essbase Oracle BI / Hyperion FDQM / DRM Oracle/Hyperion Strategic Finance Oracle Strategy and Scorecard Management Education Services and change management 8 8

9 Customers 9 9

10 Excerpt Financial Services Customer 10 10

11 Enterprise Performance Management Overview 11 11

12 Enterprise Performance Management Enterprise Performance Management is used to describe the methodologies, metrics, processes and systems used to monitor and manage the performance of an entire organization. Management Processes Strategy Formulation Budgeting and Forecasting Target Setting Business Activity Monitoring Management by Objective Methodologies Balanced Scorecard Value Based Management Risk Management Total Quality Management Intangible Asset Management EPM Metrics Financial and Non financial Short-term and Long-term Qualitative and Quantitative Lagging and Leading Aligned Applications EPM Suites Business Intelligence Data Warehousing Dashboards, Cockpits and Scorecards Adapted from Gartner 12 12

13 Why Enterprise Performance Management The pressure on companies is stronger to day than ever. Following drivers are the cause: Regulatory pressures (Basel III and Solvency II) Cost pressure (need to control time, money and resources spent in the business) Measurement pressures (the need to improve metrics from mountains of data trapped in systems) Economic pressures (the continued soft economy requires implementation of tighter internal controls) Strategic pressures (the emergence of real-time enterprise requires the removal of delays in planning and control cycles) This requires from companies to: Achieve sustainable performance improvement Establish transparency on the company s performance Set up a consistent and integrated process from strategy development to strategy implementation and operations Establish integrated controlling- and management systems Excel in time competence as main competitive advantage (Real-time Enterprise) 13 13

14 Virtual Enterprise Enterprise Real-time Enterprise Real-time Enterprise is a new management focus which requires sustainable and comprehensive efforts to reduce the duration of end to end processes Strategy-Cycles: Group Management-Cycles: Business Units Ressources Investment-Return Strategy Stimulus Deviation-Insights Objective-Employees Actions/Initiatives Process-Cycles: Different Time Competencies to be managed with in an integrated Enterprise Performance Management Platform! Processes Purchase-Payment Requirements-Resources Demand-Services Development-Market 14 14

15 Enterprise Performance Management Framework 15 15

16 Management Challenges VARIANCE OPERATIONAL PLANNING $ ECONOMIC VALUE ADDED (EVA) Today s Reality: Management Processes Are Fragmented ANALYSIS ANALYZE PERFORMANCE GOAL SETTING FINANCIAL Lack of business alignment Low predictability in performance MODELING Inconsistency in business decisions SCORECARDS FINANCIAL REPORTING ROLLING FORECAST MONITOR RESULTS 16 16

17 EPM Framework* 3 Align Struktur The Organization - und Prozessperspektive Business Units optimiert Support Units werden, um Employess zufrieden Board Members zu stellen? 4 Plan Struktur Operations - und Prozessperspektive Budgeting Sales optimiert Planning werden, um Resource Capacity Plan Process zufrieden Improvement zu stellen? Translate Struktur The - Strategy und Prozessperspektive Priorities Strategy optimiert Maps werden, um KPIs/Targets Initiatives/Action zufrieden zu stellen? Plans 2 Strategic Plan Strategy Map Balanced Scorecard Stratex Operating Plan Budgets Forecasts Reports Execution Business Processes Projects/Initiatives Business Calendar Develop Struktur The - Strategy und Prozessperspektive Missions, Values, Vision Strategic optimiert Analysis werden, um Formulated Strategy zufrieden zu stellen? 1 6 Test Struktur and Adapt - und Prozessperspektive Profitability Analysis Strategy optimiert Correlations werden, um Emerging Strategies Stress zufrieden Testing zu stellen? Monitor Struktur and - Report und Prozessperspektive Strategy Reviews Operating optimiert Reviews werden, um Regulatory Reporting Sustainability zufrieden zu Reporting stellen? 5 17 (*Adapted from Prof. Dr. Kaplan) 17

18 1. Develop the Strategy Questions 1. What business are we in, and why? (Clarify mission, values and vision) 2. What are the key issues/risks? (Conduct strategic analysis / PESTEL and SWOT) 3. What is Optimal Investment Mix/Portfolio (Conduct Investment Value Analysis) 4. What is our Strategic Plan? (Target Setting/ Stretch Targets) Outcomes 1. Mission Statement 2. SWOT Analysis 3. Investment Portfolio 4. Strategy Formulation 5. Strategic Plan/ Strategic Financial Plan 18 18

19 Hyperion Strategic Finance Account Integrity and Financial Modeling Speed Integrated financial statements Shareholder value Run unlimited scenarios Consolidate multiple business combinations Evaluate strategic projects Simulate effects of M&A Debt Scheduling Optimize capital structure Target Setting 19 19

20 Crystal Ball From single point estimates to ranges Crystal Ball is an Uncertainty Management tool for Uncertain times. Failure to include the impact of uncertainty and risk in your analyses can derail your financial plans Crystal Ball is an easy to use tool that allows you to: quantify the uncertainty in your inputs see how these see the impact your KPI s understand what are the biggest risk drivers. The result is better quality decisions and increased confidence in your numbers 20 20

21 2. Translate the Strategy Questions Outcomes 1. How do we describe our strategy? (Strategy maps) 2. How do we measure our plan? (Select measures and define targets) 3. What action programs does our strategy need? (Choose strategic initiatives) 4. How do we fund our initiatives? (Establish Stratex) 5.Who will lead the execution of the strategy? (Create strategy execution teams) 1. Strategy Maps/strategic Objectives 2. KPIs and target values 3. Strategic initiatives and projects 4. Initiative budgeting 5. Accountabilities 21 21

22 2. Translate the Strategy- BSC 22 22

23 3. Align the Organization Questions 1. How do we ensure that all organizational units are on the same page? (Align business units) 2. How do we align support units with business unit and corporate strategies? (Align support units) 3. How do we motivate employees to help us execute strategy? (Align employees) Outcomes 1. Company/Business Unit Scorecards 2. Support Units scorecards 3. Employee Scorecards / Incentive System 23 23

24 Oracle Scorecard and Strategy Management Measure, Monitor and Communicate your Strategy Strategic Management Tool Visualization of Strategic Goals Efficient Maintenance of Strategic Elements Ease of Use Action Planning Annotations Leverage with Planning, Essbase and OBI 24 24

25 4. Plan Operations Questions 1. How do we link strategy with operating plans and budgets? (Sales Forecast, Resource Capacity Plan, Operating and Capital Budgets) 2. Which business process improvements are most critical for executing the strategy? (Improve key processes such as demandsupply alignment, product allocation, and integrated revenue planning) 3. How do you align functional/operational LOB plan with financial plans 4. How do you capture your detailed operational drivers Outcomes 1. Financial planning and budgeting, operational and functional planning 2. Process Improvement Initiatives 25 25

26 Hyperion Planning Accelerate the Planning & Forecast Process Centralized System Align top-down and bottom-up Consistent assumptions Common allocations & calcs Powerful workflow and process management for budgeting and forecasting Leverage Essbase- powerful reporting and analysis 26 26

27 5. Monitor and Report Questions Outcomes 1. Are our operations under control? (Hold operational review meetings / weekly operational dashboards or reports) 2. Are we executing our strategy well? (Hold strategy review meetings / monthly BSC reports) 3. Do you have a fast close process established? 4. How is your regulatory reporting process 5. Do you report on societal and environmental performance 1. Performance Reports and Dasboards 2. Balanced Scorecard Reports and Dashboards 3. Financial Reporting and Financial Closing 4. Sustainability Reporting 27 27

28 Hyperion Financial Management Accelerate Reporting Cycles and Reduces Costs of Compliance Patented financial consolidation and reporting features Complete audit trails, workflow and validations Smart Dimensionality Flexible what if scenario management features Powerful, reporting and analysis tools Full integration with ERP and other transaction systems Easy to customize and extend Web-architected 28 28

29 6. Test and Adapt Questions 1. Is our strategy working? (Strategy testing and adaptation) 2. Do we still have the right portfolio? (Investment Portfolio Mix) 3. Are our cause and effect assumptions valid? (Balanced Scorecard strategy maps) Outcomes 1. Updated strategy 2. Profitability analysis 3. Updated portfolio 4. Updated strategic priorities / long-term goals 29 29

30 Oracle Business Intelligence Analysis, Reporting and Interactive Dashboards Rich interactive visualization Extended set of chart types OLAP analysis capabilities Integrates Relational and multidimensional data sources MS Office Integration Pixel perfect documents 30 30

31 The Management Calendar within one year Strategy Update: CEO and executive team clarify strategy. Balanced Scorecard team facilitates development of corporate and strategy map. Office of Strategy Management oversees alignment of all management processes with strategy Business lines and support units align their units with strategy Balanced Scorecard team facilitates development of corporate and strategy map Planning and budgeting process by CFO Personal goal setting by HR Weekly Operational Review Meetings Monthly Strategy Review Meetings Q1 Q2 31 Q3 Q4 31