The True Power of Oracle’s Enterprise Planning Suite Unleashed at POET: A Case Study

Enterprise Planning and Budgeting Cloud Service“If you are going to change the world, you need a system to help get you there. For us, it was… about strategic opportunities. POET was at a crossroads. We needed a system that we could grow with and that could grow with us.”
Lezlee Herdina, Director of FP&A, POET

A privately held corporation headquartered Sioux Falls, South Dakota, POET LLC is a U.S. biofuel company that specializes in the creation of bioethanol. The 1,900-employee company produces 1.8 billion gallons of ethanol annually and has been granted 90 patents in the U.S. and abroad.

In this webinar, Edgewater Ranzal’s Managing Director and HSF Practice Director Ryan Meester speaks with Lezlee Herdina, POET’s Director of FP&A, to give us a behind-the-scenes look into POET’s Enterprise Planning Solution journey, from realizing that significant change was needed to an extensive evaluation process to the ultimate solution and, finally, to the company’s enduring vision going forward.

The Right Tool for the Right Job (RTRJ)

While Lezlee and the POET team were open to the insights and recommendations generated by their Ranzal analysts, they also had some specific goals in mind from the outset:

  • Provide seamless integration of financial and operational data
  • Create a platform for process improvement, including implementing greater automation in monthly processes improving efficiency and increasing time for value-add analysis
  • Achieve better communication, including ease of reporting
  • Reduce reliance on Excel models and associated version control issues
  • Improve data governance, with clarity of data model with common definitions to facilitate planning and reporting processes
  • Integrate operational and financial dashboards for performance measurement
  • Use of scenario analysis to drive M&A and strategic business decisions
  • Increase emphasis on cash perspective
  • Understanding when to use SmartView, Financial Reports, and Oracle Business Intelligence Enterprise Edition (OBIEE), as well as take full advantage of the strengths of each of the Reporting Tools
  • Keep it simple, and trust in the higher level nature of HSF
  • Recognize the important nature of the user experience
  • Ensure that data integrations are seamless for the end-user

To learn more about the POET team’s initial ongoing business challenges, the lessons learned, and the ultimate results, view a recording of True Power of Oracle’s Enterprise Planning Suite Unleashed at POETwebinar.

To learn more about our Enterprise Planning solutions, visit www.ranz.al/epbcs-webinars

Missed the webinar? View Recording Here.

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Automating Enterprise Planning with EPBCS: A Case Study Featuring Sims Metal Management

Enterprise Planning and Budgeting Cloud ServiceIn using Enterprise Planning & Budgeting Cloud Service (EPBCS) to support annual budgeting and forecasting processes, organizations are choosing solutions that allow them to leverage the financials, projects, capital and workforce business processes necessary to provide a driver-based solution that links expected intake to revenues and costs. In turn, they are able to more efficiently produce integrated income statements, balance sheets and cash flow statements.

Featuring Jim Clark of Sims Metal Management, Our Special Guest

 Our August 16, 2017 webinar, featuring Jim Clark, Group Manager of FP&A at Sims Metal Management, takes a detailed look at how one organization automated enterprise planning to streamline processes and produce better results.

Within a real-world scenario, this means that whether using EPBCS out of the box or as a “hybrid” of OOTB with customized extensions, companies like Sims are able to adjust sales forecasts—throughout the year and through sales cycles—to better match the actual costs and needs in areas such as raw materials and labor.

A Better Approach To Performance Management

Using this integrated approach to Performance Management, companies are, in effect, bringing actual performance numbers, on a monthly basis, into their models.

As a result, changes and adjustments can be fine-tuned and incorporated into the mix.  Forecasts can be based more on actual numbers and less on assumptions, thus leading to a balance sheet that matches projections. From a planning perspective, companies can be more nimble and, ultimately, create their models with greater accuracy.

Whether you are participating live or via a recording, this webinar will illustrate how organizations like Sims are leveraging EPBCS in ways that allow them to: 

  • Gain insight to increase efficiency and improve outcomes
  • Better understand how organizations like yours can make standardization and centralization a top priority
  • See how an integrated solution works not just in theory, but actually in practice
  • Follow the processes to results that include improved accuracy and increased efficiency across the enterprise

For More Information

No matter where your team or your organization is along your EPBCS journey, this webinar is certain to provide you with valuable insight and context that can help you to implement changes that lead to greater efficiency and a more streamlined forecasting process overall.

Register for our “Automating Enterprise Planning with EPBCS: A Case Study Featuring Sims Metal Management ” webinar:

Missed the webinar? View Recording Here.

 

Introducing Strategic Modeling: Oracle’s HSF Cloud Offering

It’s no secret that Oracle, along with the rest of the software industry, has been moving swiftly to the Cloud over the past few years.

Within Oracle’s Enterprise Performance Management platform, this transition began in 2014 with the launch of Planning and Budgeting Cloud Service (PBCS). In 2016, Oracle added out-of-the-box content to solve specific business challenges in areas like Workforce Planning and Capital Planning and bundled that with existing PBCS functionality to create Enterprise Planning and Budgeting Cloud Service (EPBCS).

Now in 2017, Oracle continues the impressive build-out of its Cloud offering with the introduction of Strategic Modeling, a new product that facilitates long-range planning and financial modeling in the Cloud.

As part of Oracle’s EPBCS bundle, the Strategic Modeling module is available at no additional cost to customers who already have purchased EPBCS. While Strategic Modeling is “new” in the sense that this functionality has never before existed in its Cloud offering, the module actually has its roots in Oracle’s Hyperion Strategic Finance (HSF) product and will look similar to HSF for those who are familiar with its on-premise capabilities.

Take Your Strategic 264

Robust. Flexible. Versatile.

Strategic Modeling provides customers with a multitude of out-of-the-box functionalities built to simplify and enhance financial modeling processes.

In particular, it adds robust capabilities in the area of Balance Sheet and Cash Flow forecasting that were either missing or limited in prior incarnations of the EPBCS suite. It also adds scenario-modeling capabilities that can be created and driven by end users on the fly as they are responding to questions or requests from Senior Management.

While Strategic Modeling provides significant incremental capabilities to EPBCS, it also leverages many common components of the suite to make the user experience consistent. For example, it provides both a Web and an Excel user interface allowing users to create models and report in the tools with which they are already comfortable. The user interface, navigation, data integration and reporting capabilities are the same across all components of EPBCS, which provides a seamless user experience across the platform.

Strategic Modeling Capabilities

Organizations often try to build strategic plans in Excel or by extending the time horizon of their budgeting applications. All too often, these patchwork solutions fall short primarily because they make use of tools that were not intended for strategic planning.

Strategic Modeling, on the other hand, was built specifically for this purpose and provides numerous out-of-the-box capabilities to address challenges in this area. The following is a sampling of some of the key pre-built capabilities that organizations can utilize to streamline and enhance their strategic planning processes:

  • Fully Integrated Financial Statements: The standard template that ships with Strategic Modeling contains an integrated Income Statement, Balance Sheet and Cash Flow Statement. The Balance Sheet will automatically balance based on the cash position as derived on the Cash Flow Statement. The circularity inherent in Interest Income/Expense calculations (i.e. as Cash increases, Interest Income increases, which leads to more Cash) is automatically solved for by the system.
  • What-if Capabilities: Strategic Modeling greatly facilitates the process of creating on-the-fly scenarios and comparing them against the base case or other scenarios. Scenario Modeling capabilities are designed for end users to create and run and provide immediate results to key strategic questions.
  • Robust Funding Capabilities: Strategic Modeling has a Funding Routine that allows users to specify a prioritized order of how cash deficits will be funded (e.g. Sell Marketable Securities, Draw upon a Revolver or Issue Commercial Paper, Issue Long-Term Debt or Equity) and how cash surpluses will be utilized (e.g. Pay Down Debt, Share Buyback, Dividends, Buy Marketable Securities).
  • Debt Scheduler Utility: A guided user interface allows for easy input of the parameters for a new debt issuance. Strategic Modeling then will calculate and perform all of the accounting for items such as Accrued Interest, Amortization of Debt Issue Costs and Current Portion of Long-Term Debt.
  • Integrated Enterprise Planning: Strategic Modeling is part of Oracle’s EPBCS Suite and as such benefits from tight integration with the other processes (Financials, Capital, Projects, Workforce) and the reporting cubes of EPBCS. This integration allows users to quickly and easily move data from their detailed budgets and operating plans to their strategic plans within Strategic Modeling. Once the strategic plan is complete, data can be easily exported as higher-level targets to seed the budget process.

Whether you own already own EPBCS and are interested in deploying the Strategic Modeling module, you are an existing HSF customer looking to move to the Cloud or you are new to Oracle and its Cloud offerings, Strategic Modeling has a compelling use case for all organizations looking to improve their modeling and strategic planning capabilities.

Register for our “Take Your Strategic Planning to New Heights” webinar: Please join us for our webinar on July 18, 2017, to see a demo of Strategic Modeling in action and to learn more about its capabilities — register here.

Missed the webinar? View the recording here.

Data Governance in the Cloud: An Integrated Strategy; A Unified Solution

Are you tasked with making organizational decisions that have placed you in a major dilemma? As a decision-maker in today’s fast-paced economy, you must wonder how you can cut costs, improve the bottom line, and still maintain the data quality necessary to make strategic decisions.

Take heart because it IS possible to achieve a balance of on-premise and off-premise Enterprise Performance Management (EPM) software while maintaining integrity and control of your data to provide the quality and data assurance needed for success – AND benefit financially from new Cloud technologies.

Success is a combination of understanding what each data tract requires and creating an integration strategy consisting of the necessary business processes and software tools that deliver consistency and integrity of your EPM strategic data.

Past trends called for a tight on-premise coupling of all EPM software to achieve the best results. This strategy required maintenance of a large hardware and software infrastructure and related personnel to keep everything running smoothly.  The new Cloud “POD” subscriptions are geared toward reducing the high costs of infrastructure which is a financial benefit. As in all things in life, there is a consequence of moving to Cloud technology.   An unexpected consequence of Pod technology is the creation of isolated silos of information, but there is an easy resolution!  The key to overcoming this limitation is to gain an understanding of what each component offers and demands, and creating an integration strategy to bridge that gap.

If you are interested in learning how to create this strategy to bring the various pieces together as a unified solution or if your organization plans to migrate to the EPM Cloud platform in the future, this whitepaper helps to define a process to pre-build the integration strategy and make moving to the Cloud easier with reduced time to migrate.

Download our whitepaper: Data Relationship Management (DRM) for Cloud-Based Technologies:  Using DRM for Data Governance in the Cloud

Connecting the Value of IT: A Disciplined Solution for Service Costing and Chargeback

This post corresponds to the webinar “Connecting the Value of IT: A Disciplined Solution for Service Costing and Chargeback,” the last in our “Let Your Profitability Soar” webinar series. You can access the recording here.

 

Within an organization, technology is mission-critical to most business strategies, and IT costs represent a significant portion of back office spend.

Among their many responsibilities, the CFO and the CIO must make sure that:

  • Technology spending is aligned with business strategy
  • Business applications and end-user services are delivered efficiently and cost-effectively
  • Coherent project portfolios that grow and transform the business are created and nurtured

Within this new economy, a key ongoing goal of the CIO is to make sure that IT is aligned with business strategy.

Generally, this IT-to-Business Strategy alignment is achieved in two ways:

  1. Running the business: Providing a cost-effective level of internal services necessary for sustaining business activity.
  2. Building the business: Managing and delivering portfolio development projects that are prioritized and aligned with all key business initiatives aiming to improve efficiency and aid in gaining competitive advantages.

The Nature of the Problem

One challenging pattern we see time and again is the ongoing disconnect between the CIO and the CFO.

Some might say this disconnect is an inevitable result of the fact that technology is moving so fast and we don’t always have the time to stop and assess its value. Understandably, it can be difficult for a CFO to get away from all the checks and balances just to get the financial books closed, let alone turn attention to the books that measure performance at greater depths, like line of business.

In general, as a function of the role, the CFO does not talk servers, desktop deployments, applications or other semantics of the technology business. Conversely, with many companies establishing Technology Shared Service Centers, pressure is placed on the CIO to operate the business of IT with the same financial disciplines the CFO requires of all lines of business. The CIO must connect the value of IT services and capabilities to internal business partners. To achieve this, IT Finance teams require performance management solutions that are IT-specific, yet are connected to Finance, to ensure efficient allocation of resources and effective delivery of internal services.

Part of the CFO’s role is to look at the technology projects and initiatives and think about how all of this technology is adding value. CIOs have to fill information voids, while also having to build their own financial models and performance management book of record using their own resources.

Two seemingly differing views of value can be hard to navigate and leverage. If two divergent approaches are not connected in a common view among the key stakeholders, then—more often than not—there is ongoing value-related confusion. Ultimately, the dissonance between the line of business owners can stall or even paralyze decision-making.

A Better Language Is Needed

For the good of your organization, it’s imperative that the CIO and the CFO speak the same shared language of value and that they connect in an effort to move forward in the most aligned and productive manner possible.

Speaking a shared language—one that offers a unified financial model view and is based on shared definition of value—is a key to finding a solution. The disciplines of ITFM (IT Financial Management) is about equipping both of these executive-level offices and their teams with a better language.

With an ITFM solution, you are able to:

  • Reduce the time that IT Finance spends on managing the business processes, providing more time for value-added analytical activities
  • Give IT Managers more detailed, timely, accurate data to better understand the cost & effectiveness of the services and projects they are delivering
  • Provide Line-of-Business managers with cost transparency into IT allocations and chargebacks, allowing them to better align their consumption of services with their business goals

ITFM focuses on these finance business processes:

  • IT Planning: Budgeting & forecasting of IT Operating and Capital Spend
  • IT Costing: Linking supply side financial cost structures with demand side consumption for services and projects
  • IT Chargebacks: Equitably charging lines of business for internal services and projects performed (or Showback)

IT Finance Organizations typically manage these processes through a series of multiple systems and offline spreadsheets. These processes are not ideal, as they create pain as far as inefficiencies and ineffectiveness in terms of results.

Our preferred solution for IT Service Costing—co-developed with Oracle—is based on PCMCS (Profitability and Cost Management Cloud Service). Oracle’s PCMCS is a cloud-based, packaged performance management application. It offers, in one package, a rules engine for cost allocations, embedded analytics and data management platform.

When developing the solution with PCMCS, the following were top priorities for our team:

  • That it required no large initial investment
  • That it was accessible to all
  • That it was always updated/up-to-date
  • That limited IT involvement was needed

Oracle IT Financial Management Solution Overview

Connecting Value of IT Image 1

The ITFM solution, a joint development effort with Oracle and based on valuable feedback and results from multiple Ranzal customer implementations, offers all of the following in one package:

  • Pre-Packaged Content for Cloud or On-Premise
  • Pre-Built Data Model
  • Pre-Built Costing Model & Reporting Content
  • Pre-Built Interface Specifications

A key component of the PCMCS IT Costing & Chargeback Template is its approach to modeling IT Like a Service Business, which includes the following modules:

  • Model Financials & Projects: This first step is focused on modeling financial projects, allowing you to combine multiple data sources, perform cost center allocations and, for those customers without an existing project costing system in place, to perform basic project costing and project allocation functions.
  • Complete Costing of IT Operations: This second pillar of the solution provides a flexible framework that allows you to combine data from multiple sources, perform resource costing and perform service costing.
  • IT as a Business Service Provider: This third leg of the solution service considers catalogue & bill rates, contribution cost trace, consumer showbacks and consumer chargebacks.

 We Have Options, You Have Options

Our Flexible Maturity Model allows customers to start where they feel most comfortable, and progress in a way that is focused on maximum flexibility for maximum effectiveness. No one size fits all, and we believe in starting right where you are.

Connecting Value of IT Image 2

 

For more information or to request a demo, email us. Be sure to ask if your company qualifies for our one-day complimentary PCMCS assessment of your IT Service Costing needs.

Full Circle Planning, Cost Management, & Profitability in the Manufacturing Industry

This post corresponds to the webinar “Full Circle Planning, Cost Management & Profitability in the Manufacturing Industry.” You can access the recording here.

As we are all aware, today’s manufacturing industry faces multiple ongoing challenges, including:

  • Changing customer/consumer demands
  • Shrinking operating margins
  • Ever-changing compliance and regulatory pressures
  • Increasingly globalizing economy
  • Lowered availability and visibility of detailed information

Now more than ever, manufacturers’ focus is not just on growth, but, more specifically, on profitable growth.

 

Managing Profitable Growth

When it comes to profitable growth and insight into profitability, the first place to start is the consolidated P&L.

But while the P&L offers information on profitable growth, it does not help manage profitable growth. The financial P&L provides limited insight into costs, profits and their underlying drivers, from the perspective of their lines of business, products, customers, markets and channels. Cost bases are imperfect and are limited to legacy standard costing and unstructured cost extracts. Results lack a matching of costs and revenue to manage margins at the same strategic view as revenue.

 

The Need to Focus on Strategic P&Ls

To address and contend with these challenges, we recommend a greater focus on more strategic P&Ls for the manufacturing industry.

Strategic P&Ls provide insight into both direct costs and indirect costs.

  • Direct Costs include costs directly associated with:
    • The making of a product or delivery of a service
    • Parts for the product
    • Labor for Service Delivery
    • Costs directly attributed to the selling to a customer or client
    • Shipping and handling expenses
    • Customer processing expenses
  • Indirect Costs include costs that are not directly attributable to the making of a product, delivery of a service, or the selling to a customer:
    • Operating costs (e.g., Call Center, Distribution)
    • Selling costs (e.g., Sales & Marketing)
    • Investment costs (e.g., R&D, Initiatives)
    • G&A costs (e.g., IT, HR, Finance, Admin)
    • Finance charges for Cost of Capital Employed

Measurement of indirect costs in particular can be difficult.

 

What Would A Solution for the Manufacturing Industry Look Like?

With all of this in mind, it’s important to look at the big picture when determining what manufacturers can do to attain strategic P&Ls and overcome their challenges?

The ideal solution for the manufacturing industry would:

  • Design, support and evolve to an integrated financial process
  • Leverage operating metrics and key assumptions to:
    • Link business drivers behind financial performance
    • Modify drivers and assumptions to plan future performance and attain strategic P&Ls
    • Drive accountability to Lines of Business
  • Offer a consistent and transparent framework to support indirect cost attribution
  • Use integrated applications and tools to support and adapt to changing business processes
  • Provide robust reporting to business for transparency into causal factors

A true full-circle planning, costing and reporting solution that aligns and adapts to an integrated financial process includes the following:

  • Driver-based revenue planning and departmental expenses leveraging the actual financial data, operational metrics
  • Integrated costing capabilities that can allocate indirect expenses to lines of business by leveraging the same actuals, plans and drivers used in the planning process
  • Robust and real-time reporting to surface strategic P&Ls by Customer, Product and other Lines of Business

 

Some Solutions are Ineffective and Unsustainable

Our team at Ranzal has seen many manufacturers attempt to piece together a solution using various combinations of spreadsheets, ERP, custom and packaged applications.

Typically, spreadsheets are the most common ingredient given their flexibility and accessibility. But spreadsheets tend to be error-prone, highly manual/labor-intensive and prone also to risk regarding controls and governance. We’ve also seen customizing the ERP as a common solution-oriented approach, but this can be too expensive, overly IT-centric and can also be somewhat of a “black box.” And lastly, custom applications are slow to adapt, can promote high effort and cost and also function like a “black box.”

 

Oracle’s EPM as the Foundation for Full-Circle Planning

We recommend Oracle EPM’s packaged applications to be the foundation to configuring the right full-circle planning, costing and reporting solution that avoids the constraints and risks other avenues bring on.

The specific Oracle EPM offerings that support a full-circle planning, costing and reporting solution involve:

  • Planning & Budgeting Cloud Service (PBCS)
    • Best-in class solution for financial planning, budgeting and forecasting
    • Align top-down and bottom-up processes
    • Consistency of assumptions, calculations and methodologies
    • And many more features here
  • Profitability & Cost Management Cloud Service (PCMCS)
    • Computes Profitability for Units, Segments and Services
    • Pre-Built Framework for profitability modeling: Dimensions, Support for Multiple Cost Allocation methodologies, Validation reporting
    • Graphical Interactive Traceability Maps & Dashboards
    • Measures, Allocates and Assigns Cost and Revenues via User-defined Rules
    • And many more features here
  • Tightly integrated with the Oracle EPM Cloud
    • Consistent Administration with EPM Cloud Offerings
    • Shared Reporting Tools like Financial Reports & Smart View for Office
    • Proven Technology Stack

We believe a comprehensive solution focused on a “Technology Trio” of Integrated Business Analytics, or the convergence of: EPM, BI and BD solutions. Experience and results have shown us that this combination provides the tools and answers needed for improved business performance, increased innovation, better vision, and increased business value.

For more information or to request a demo, email us. Be sure to ask about our complimentary one-day Profitability and Cost Management assessment and how the newly-released Oracle Profitability and Cost Management Cloud Service (PCMCS) can help modernize your solution.

Don’t Let Incremental Overtime Plague Your Healthcare Organization!

Get to the Root Cause: Increase Productivity and Patient Care While Reducing Labor Costs

The Causes and Consequences of Incremental Overtime

Incremental overtime may be costing your healthcare organization thousands of dollars unnecessarily and result in decreased employee morale and poor productivity, so it’s important to understand its root causes by gaining the ability to track overtime. A Labor Productivity/Labor Management solution that delivers key analytics provides specific answers to the root causes of incremental overtime.  Common causes include:

  • Early clock-in/late clock-out
  • Inability to complete required tasks by end of shift
  • Shift transition conflicts (i.e. last minute attending to patient needs or handoff not yet completed)

The Solution and its Benefits

A Labor Productivity solution provides data for labor hours so that ratios can be derived based on each organization’s definition of incremental overtime, and this leads to a clear understanding of the root causes of incremental overtime so that corrective action can be taken, including:

  • Ensure management visibility at change of shifts
  • Employee coaching/staff meetings to aid time management skills
  • Provide daily reports/analysis to managers to establish protocol for handling incremental overtime risks
  • Designate a synchronized clock that employees should rely on (i.e. department wall clock)
  • Educate employees on OT authorizations – cite repeated behavior in performance evaluations

Incremental Overtime 1

By addressing the causes of incremental overtime using data provided by a Labor Productivity solution, providers can deliver great patient care while decreasing labor costs by thousands of dollars and increasing productivity.

Incremental Overtime 2.jpg