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Oracle Integrated Operational Planning Align Operational Plans with Financial Goals

Oracle Integrated Operational Planning Align Operational Plans with Financial Goals. Hari Sankar Oracle EPM Products. Agenda. <Insert Picture Here>. Business planning challenges Oracle Integrated Operational Planning Solution Overview Hyperion Planning & IOP Oracle IOP demo

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Oracle Integrated Operational Planning Align Operational Plans with Financial Goals

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  2. Oracle Integrated Operational PlanningAlign Operational Plans with Financial Goals Hari Sankar Oracle EPM Products

  3. Agenda <Insert Picture Here> • Business planning challenges • Oracle Integrated Operational Planning • Solution Overview • Hyperion Planning & IOP • Oracle IOP demo • Customer success 3

  4. The Business Planning ProblemThe Finance-Operations Disconnect Finance divorced from operational reality Simplistic operational models and drivers One way communication with operations No way to calculate operational feasibility of the plan leading to… missing the forecast Operations misaligned with financial goals Detailed models to drive execution, not to dialogue with finance Simplistic financial linkages No way to evaluate financial impact of operational plan leading to…adverse financial results 4

  5. Today’s Integrated Planning ProcessBlood, Sweat and Excel Financial Planning Long-Term Financial Planning Treasury Management Financial Planning & Budgeting WorkingCapital Planning Profitability Management Performance Scorecards Functional Operational Planning Demand Management Customer Management Human Resources Planning Supply Planning Product Performance Management Logistics Planning ERP System 5

  6. Integrated Business PlanningBridging the Finance-Operations Disconnect Financial Planning Long-Term Financial Planning Treasury Management Financial Planning & Budgeting WorkingCapital Planning Profitability Management Performance Scorecards Strategic Operational Modeling Integrated Impact Analysis Financial Performance Modeling Functional Operational Planning Demand Management Customer Management Human Resources Planning Supply Planning Product Performance Management Logistics Planning ERP System 6

  7. What is Integrated Operational Planning 1 Business planning layer complementing functional planning systems • Rough-cut modeling appropriate for business decision making • Replaces patchwork of spreadsheet models 2 Integrated cross-functional planning models • Captures financial targets and operational constraints in a single framework • Integrated business impact analysis 3 Interactive what-if scenario analysis • Transparent planning models with business user control • Enables iterative planning and decision making 2 1 3 7

  8. Change-Based Data ModelingCore Technology Behind IOP • Modeling of operational constructs • Rich expressiveness in modeling & calculation logic • Complex dependencies, relationships, transformations • Declarative calculations, not scripted • Rapid analysis of cross-functional impact • “Change anywhere, analyze everywhere” • Evaluate financial desirability & operational feasibility • Interactive response times • Robust analytic transaction framework • Scenario management & change isolation • Reconciliation of concurrent plan changes • System of record for plan changes: audit trails 1 1 2 2 3 3 8

  9. Solution ArchitecturePurpose-Built for Integrated Planning Planning, Analysis and Reporting Application and Process Layer Impact Analyzer Scenario Manager Federated Modeling Change-Based Data Modeling Engine Plan Updates Data Feeds ERP / Functional Planning Applications 9

  10. Analyze Financial and Operational ImpactPlan Revisions Supported by Fact-based Decisions • Model plan revisions in familiar Excel environment • Review financial metrics and operational constraints • Assess impact of plan revisions interactively 10

  11. Manage Business Scenarios and Collaboration • Create, submit and approve business scenario’s • Include planning participants across business functions • Manage planning workflow 11

  12. Planning and Managing Financial Performance IOP Focus Financial Measures Planning Solution Needs Key Drivers (Examples) Income Statement Revenue Business Entities Product Mix & Prices Growth & Region Mix Chart of Accounts, GL Entity, Products, Customers, Regions, Projects, Employees, Assets Cost of Sales Direct Costs Shared Costs Business Data Financial data, Operational Data, Market Data Balance Sheet Payroll Expenses Headcount Salary Increases Relationships Entity Hierarchies, Product Bills of Material, Distribution Networks Capital Expenses Rules New Projects Purchase Prices Budget Allocation Rules, Aggregation Rules, Variance Thresholds Cash Flow Statement Accounts Receivable A/R Aging Collection Rates Constraints Workforce Plg. Capital Budget, Operating Budget, Capacity, Materials, Resources 12

  13. Oracle IOP Business Scenario:Integrated Margin Planning Hyperion Planning Revenue Cost of Goods Sold Gross Margin Oracle IOP • Raw Material Costs • Labor Costs • Transportation Costs • Capacity Utilization • Product Mix • Granular Pricing • High-level assumptions • Standard costs • No operational detail • Annual adjustments • Detailed cost drivers • Bill-of-Materials modeling • Time-phased calculations • Multiple adjustments per month 13

  14. Oracle IOP Business Scenario:Revenue Alignment Hyperion Planning Revenue Cost of Goods Sold Gross Margin Oracle IOP • Bottom-up product hierarchy models • Regional, channel & customer mix • Rough-cut capacity • Granular Pricing • High-level assumptions • Lack of product & customer level detail • Quarterly adjustments • Driver-based revenue impact analysis • Align dollar targets with unit plans • Identify and reconcile operational constraints • Multiple adjustments per month 14

  15. IOP Solution Demo

  16. Demo Overview Business Context: Electronics Manufacturer • Missed our Q1 Revenue Target • In Hyperion Planning adjusted Financial Plan upwards for 2HFY • Looking to close revenue shortfall by pulling in a New Plasma TV Product Launch • Sent the new plan to IOP for detailed analysis • Review both operational constraints and financial metrics 16

  17. IOP Customers

  18. Proven Value in Key Industries 18

  19. Move From Function-Centric Planning to Aligned Performance Across the Business Global manufacturer and marketer of high-quality, brand-name products for consumers throughout the world 19

  20. Align Product Allocation Decisions with Business Priorities Seagate is the worldwide leader in the design, manufacture and marketing of hard disk drives 20

  21. Key Takeaways • Align financial goals with operational plans • Enable responsive business decisions • Attain financial targets with greater confidence • Unlock the value of existing planning systems 21

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