Creating Business Harmony: The Integration of ERP, EPM and BI Enzo Santilli, Partner, MarketSphere
Agenda 1 2 3 4 5 6 7 History in the Making of Information (and the need for Harmony) One-Certified & Secured View of Data Connect the Transaction Detail to Enterprise Layer Establish an End-to-End Foundation Enable Cross Domain Analysis Provide the Ability to Develop New Analytic Models Improve Collaboration & Where to Start 2 2
History in the Making (and the need for Harmony!) History in the Making Information (the common attribute of BI, ERP & EPM) is as powerful-- if cash is king, information is its palace It drives business performance success, but it must also be secured, managed, and protected to reduce risk and exposure, while maximizing its potential Twenty years past BI ideation- what is the next best coined phrase to support and exploit information to improve performance? It is Harmony. 3
The Integration of ERP, BI and EPM Harmony is the integration and access of information across an organization s ERP, BI and EPM solutions to produce a robust analytical environment that delivers timely business insight. Harmony turns data into relevant and complete information: creating multiple perspectives with one-certified and secured view of data (BI) by connecting transactional detail (ERP) to predictive forecasting content (EPM) and establishing a flexible end-to-end analytics foundation for future growth and change Harmony drives the following benefits: Enables cross-domain analysis of common business subject areas Provides the ability to develop new analytic models Improves collaboration across an organization 4
One-Certified and Secured View of Data
One-Certified & Secured View of Data To consume the data, appropriate tools and technologies are needed to move data to create consumable information. Failed, Past Approaches Data Marts & Siloed Sources Detail pulled from ERP or legacy for needs finance, marketing, HR, etc. Created multiple version of many truths Failing to meet regulatory requirements Data Warehousing Delivers single view Massive mission, taking years to complete Failure due to constant organic of M&A growth Successful, New Approaches BI Platform Detail pulled from ERP or legacy for needs finance, marketing, HR, etc. Creates one version of truth Complete, pre-built analytics Meta Data Repository Data model-agnostic master data management solution Builds consistency within master data assets despite endless changes Creates one version of truth 6
One-Certified & Secured View of Data Harmony creates an ideal architecture for future growth that should be leveraged based on measured ROI. Oracle BI Applications Supports over a dozen different functional areas Complete, pre-built, best-practice analytics Rich set of KPIs, metrics and analytic workflows All on one common BI foundation Oracle Hyperion DRM A data modelagnostic master data management solution Enables financial and analytical master data management Dynamic, fastchanging business environments resulted from M&A, departmental initiatives or legacy system proliferation 7
Value Case-In-Point Situation Due to swift and steady growth, operations outgrowing technologies and processes Required upgrades to existing systems to properly report on performance and provide improved analytical capabilities to accomplish effective revenue growth and profitability decisions Kendle had the following to improve: Three financial systems across three global regions, with difficultly collecting and storing data More than 4000 reports to run the business Manual, intensive excel-driven reporting and analysis Autonomous operational and financial data, deteriorating operational decision-making MarketSphere Applied Expertise Goal: Align multiple financial systems across the globe and address the numerous versions of data from disparate systems Leveraged the Analytical Assessment Approach (A3) Develop detailed technology & systems strategy for each subject area, including Financials, Projects, Human Resources, Clinical Trials and Sales Reporting Created One-Certified & Secure View of Data via fully integrated, on-demand solution with common master data management processes enforced in ERP Established data quality and naming standards throughout the enterprise Benefits & Value Achieved Over 1500 end-users worldwide have secured access to converted data in summary with drill-down to invoice and sub-ledger detail Management has needed insight into sales, supporting financial growth strategy Eliminated cost of maintaining and reconciling multiple versions of the same info High 3 4 9 1 2 Low Low Initiatives Value Matrix DO IT NOW 8 STRATEGIC 10 11 5 6 SELECTIVE Effort 12 7 SELECTIVE 13 High Initiatives # Financial Analytics Packaged and 1 Basic & Intermediate Extensions Financial Analytics Advanced 2 Extensions and Customizations Projects Analytics - Packaged and 3 Basic & Intermediate Extensions Projects Analytics Advanced 4 Extensions and Customizations HR Analytics - Packaged and Basic & 5 Intermediate Extensions HR Analytics Advanced Extensions 6 and Customizations COMPASS BI Reporting Custom 7 Balanced Scorecard 8 Backlog BI Reporting - Custom 9 PSR BI Reporting - Custom 10 Clinical BI Reporting - Custom 11 Budgeting & Planning 12 Costpoint Integration 13 Packaged Oracle BI Applications with Basic and Intermediate Extensions Custom BI Work Streams Budgeting & Planning Advanced Custom Development 8
Connect Transaction Detail to the Enterprise Layer (i.e. Predictive Forecasting Content)
Connecting the Transactional ERP systems address most complex business requirements, but the ability to categorize data & interpret information in a meaningful way is grueling. Accessing information outside the ERP is also difficult. Current Day-In-Life Report needed to understand numbers impacting GL, inventory, customer, etc. Additional resources needed for account reconciliation Need access to trading or order system for full story By time report created, data out-ofdate or obsolete IMPACT: Unproductive use of time Increased dissatisfaction Decreased confidence in information Day-in-Life with Harmony Create data strategy to pull data from up- & down-stream Reporting across all subjects available- GL, inventory, customers, receivables Interactive experience with cash management, working capital, DSO, vendor rates, etc. IMPACT: Improved accuracy in information and decisionmaking Advances job performance and satisfaction 10
Case-In-Point Situation World s leading provider of diagnostic testing, information and services for patients and doctors need to make better healthcare decisions Grew internationally, with increased complexity- 20 year old system required extensive manual processes to meet SOX, SEC and IFRS mandates, ERP system could not integrate new diverse entities or create accurate reporting Key business drivers included: Maintain old COA segments & values while building new chart field segments and provide data governance standards and controls to derive new chartfield reporting Move from detective controls to preventive controls to improve SOX & IFRS preparation Remove manual system integration and ERP driven analytical hierarchy updates to ensure detailed revenue and cost information accuracy and financial statement completeness Improve current use of multiple disconnected tools to access data & provide visibility to lower-level detail with common business definitions Apply appropriate processes and tools to reconcile customer, product & market profitability to the general ledger MarketSphere Applied Expertise Defined process & technology to enable data governance to link ERP to Management Reporting and Planning/Budgeting Enabled the use of a thin General Ledger while providing IFRS monitoring capability Management Reporting solution, via Oracle Hyperion Essbase with drill through in sub-seconds Enabled reporting in the new COA, prior to cementing changes in the ERP General Ledger Provided the foundation for operational data governance using Oracle Data Relationship Management (DRM), leading to product and profitability analytics Benefits and Value Achieved Removed 1/3 of tax department s time to get to line one of a state tax return to provide revenue by entity Reduced time to implement new analytical & planning models by ~50%, reducing development costs Provided more information, faster, while using the same resource cost structure Delivered maintenance of analytical master data in a single source across the entire organization (MarketSphere) gives us a quick win with General Ledger analytics with drill through to journal entry detail. Able to report on the new chart of accounts prior to making the changes in the General Ledger Management reporting solution vs. implementing ERP in a linear fashion - Phil Sabo, Director Financial Systems 11
Establish a Flexible End-to-End Analytics Foundation for Future Growth and Change
Establish an End-to-End Foundation Organizations have implemented numerous BI, ERP and EPM solutions & created Mountains of information, Oceans of systems and Islands of data The issue is not only how to pull all of it together, but how they should use the landscape to support the needs of the business and answer the question: How do we make money? You cannot make money when people are spending more time using different oceans to access different mountains and islands- or create 600 spreadsheets in Excel 13
Establish an End-to-End Foundation Framework or platform where operational systems come together with analytic systems & provide optimal performance for the strategic and tactical use of information Location where essential tools are leveraged to collect & manipulate data for decisions to take place Allows people within an organization to perform the right activity at the right time- allowing those that transact, to create transactions and those that report, to use reporting, such as scorecards, dashboards and scenario-based analysis. Done properly, will allow an organization to change and grow, organically and/or by acquisitions or mergers, without disruption in performance or in the integrity of its information Improves speed to receive information & process changes and react to opportunities Current Day-In-Life If your sales team spends all their time in your CRM system, searching for the best clients, when will they be able to create an action plan and meet these clients? Day-in-Life with Harmony If information was pulled from your mountains and islands, without disrupting the performance of your oceans, the best clients could be presented via a dashboard accessed anywhere and at any time, allowing your sales team to outperform your plans- and make more money! 14
Establish an End-to-End Foundation Oracle Fusion Applications will create the beautiful landscape underneath the mountains, ocean and islands allowing operational systems to come together with analytic systems and provide optimal performance for the strategic and tactical use of information. 15
Enable Cross-Domain Analysis of Common Business Subject Areas
Enable Cross-Domain Analysis Functionality Ability for users to pivot and create multiple views Visual format, accessed quickly Transparency Drive confidence in the data Provide access to the invoice line or employee level detail Performance ERP reporting may take > 6hrs Deliver reports in seconds Answer critical business questions using data across multiple transactional modules - Finance, Projects, Supply Chain, Sales and Human Resources: Are we managing cash in an optimal manner? How is bad debt trending with revenue? Is our working capital turnover improving? How are my payment terms trending? Can we improve rates and discounts from vendors? What is the margin for our top customers by region? Which products and customers are most profitable? How can we minimize inventory on hand? How can we reduce Days Sales Outstanding (DSO)? What is our employee retention by geography? How can we change the organizations behavior to align with our current strategies? 17
Enable Cross-Domain Analysis Financials Human Resources Projects Procure & Spend Supply Chain Order Mgmt REPORT Sales Marketing Service Contact Center Price and Loyalty FORECAST SINGLE ENTERPRISE INFORMATION MODEL ANALYZE MODEL Financial Consolidation Planning and Forecasting Strategic Planning Financial Services Communications Health Care Retail
Case-In-Points By leveraging foundation to Harmony, provide analytics across multiple subject areas Financials (GL, AR, and AP) & Projects (Revenue, Billing and Cost) to provide views of costs by client and region in relation to legal entity and revenue related data Budgeting / Planning (Hyperion Planning ) & Financial to improve the overall planning process and create confidence in information used to perform budget cycle; Actuals content is sourced in the business application warehouse for use by the financial planning process Human Resources & Financial to optimize talent management, including managing headcount turnover and retention by business unit revenue Clinical Trial & Financial to expand the customer experience and provide analytics on the full lifecycle of the clinical trial operation and provide real 360 degree analytics Result: ERP, BI & EPM solutions more relevant & strategic; Viewed by executives & users as enabler to providing insight into strategic initiative- doubling revenue over the next 3 years Uses cross-domain analysis to relate General Ledger trial-balance information to Accounts Payable voucher detail Information related to patient liability now accessed by accounting as part of standard balance sheet queries Provides dashboard content for accounts, departments, and cost centers in a new COA Key functions of cross-domain include: General Ledger summary information that relates to billing detail Summary & detailed access to products, lab tests, geography operational detail provides the foundation for profitability analytics Human Resource analytics by business unit; Payroll taxes on the GL balance sheet now reviewed by business units at the employee level Result: $1.8M savings and validation of the COA with the business prior to cementing the chart in the ERP 19
Provide the Ability to Design New Analytic Models
Ability to Develop New Analytic Models The recent financial crisis revealed the price of unreasoned assumptions-- Success simply will not tolerate intuition and chance Pioneering companies are thriving on analytics and competing in a tough global economy by developing variable models to support root cause analysis, predictive modeling, and ad-hoc analysis The outcome is a logical approach to solving business problems based on fact and supported by documented business drivers Harmony creates a new opportunity for automation and insight into continuous improvement efforts Identifying performance measures, establishing realistic targets and tracking results for any business process can be facilitated by multi-dimensional analytics The integration of ERP, BI and EPM also provides ability to layer multiple levels of complex data while reducing time required to perform updates to models Ultimately, organizations will have faster access to data delivered in one-certified view Example: Income Statement Modeling Completed by layering in actuals from one or multiple ERP systems, as well as acquisition targets Optimization models can be created that can solve questions to capacity, headcount, profitability, or capital investments Improved insight into customer and products can be created with models incorporating these dimensions that may exist only as an attribute in the ERP system 21
Ability to Develop New Analytic Models Variable model perspectives One-click access to a myriad of models Key opportunities and critical issues at a glance Root-cause Analysis 22
Case-In-Point Situation World s leader in the production and management of primary aluminum, fabricated aluminum, and alumina. With 97,000 employees, 40 business units, and operations in 34 countries, it imperative that it constantly manage accounts receivable and reduce bad debt Sales organization compensated only for sales, whether it was a net new, cross-sale or extension Management wanted to improve their cash flow and portfolio by changing field sales compensation to include receivables Issue: delivery of account receivables reporting was manual, timely process MarketSphere Applied Expertise Utilized A3 approach to define and develop a reporting solution Leveraged Oracle Essbase to provide customer, market & product data, as well as drill-down into receivables across multiple dimensions. Created intuitive, on-demand, global reporting system that leveraged their ERP sub-systems Benefits and Value Achieved Improved each sales person s engagement in the management of receivables Drove interest savings of 5% improved cash flow by $130M We are getting great reviews of our tool and the MarketSphere team has my highest recommendation. Manager, Global Credit Processes, Alcoa 23
Improve Collaboration & Where to Start?
Improve Collaboration Enhances ability to attack critical business problems Drives future, forward thinking behavior Improves overall strategic and tactical planning Produces better, faster decisionmaking Leads to superior business understanding Improves processes and aligns talent to support on-going progress Reduces job dissatisfaction Improves confidence in the numbers Creates synergy between IT and business Reduces IT resources in creating multiple reports 25
Operational Systems Sub GL 1-n back) EPMA Optimal Environment Established AP FA Exp O R ERP GL DRM Data Relationship Mgmt BI Warehouse FDM (ERP adapters & drill HFM Close & Consolidate Planning Strategic Financial Operational Essbase Analytics DM Disclosure Mgmt Regulatory Reports Management Reports other OBIEE Ad Hoc Analysis Operational Reports BI Apps Custom BI Decision Zone 26
Harmony: Where to Start 1. Optimize Current Applications 2. Assess Analytic Needs Leverage A3 to define needs of: Cross-Domain Analysis Analytic Modeling Upgrade to latest releases Leverage advancements in application functionality Keep organization current on technology 3. Identify Oracle Fusion Modules 4. Develop Next Generation Skills Implement to expedite ROI: Financial Management Human Capital Management Procurement Project Management Supply Chain Management Governance/Risk/Compliance Customer Relationship Management Expertise for future flexibility optimization Reduce IT &sourcing costs Ask us how to identify a successful roadmap to Harmony! At your pace and on your terms, based on today s needs. 27
Questions?
Enzo Santilli, Partner Enzo.santilli@marketsphere.com