Remove Your Head From the Clouds! Is PBCS or On-Premise Planning the Right One for Your Business?

Transcription

1 Remove Your Head From the Clouds! Is PBCS or On-Premise Planning the Right One for Your Business? Prepared by: Brad Kwiatek, Grant Thornton LLP Session ID: 10644

2 Your presenter Brad Kwiatek Director, Grant Thornton Omaha, NE Executive summary Brad Kwiatek is a Director in Grant Thornton s Business Advisory Services Oracle Practice. Brad has over 12 years of experience with leading and managing financial transformation projects as well as implementing Enterprise Resource Planning, Enterprise Performance Management, Business Intelligence and Data Management solutions. Brad is a proven thought leader in the delivery of integrated financial processes and systems. Prior to Grant Thornton, Brad worked for MarketSphere and Intel. Related presentations & publication: Remove your Head from the Clouds! Is PBCS or On-Premise Planning the right one for your business? Head in the clouds? How an EPM upgrade fits into your cloud strategy Laclede leverages Oracle Hyperion and BI to drive growth and acquisition strategy MIQ Logistics Drives Growth using Oracle Hyperion Planning Integrating Oracle ERP, BI and EPM Systems

3 About Grant Thornton We are the U.S. member firm of Grant Thornton International, a global organization of member firms providing audit, tax and advisory services to clients for more than 90 years. PEOPLE PARTNERS Over 10% revenue growth in the U.S. last year with a 13% increase in headcount $1.56bn revenues 35% of the companies on the 2015 Fortune 1000 list 39% of the companies on the 2015 Fortune 500 list 54% of the companies on the 2015 Fortune 100 list 25% of the companies on the Russell 2000 list OFFICES

4 Committed Oracle partner Specialized Partner of the Year, 2014 (EPM, NA) JD Edwards Excellence Award, 2015 Excellence Award, 2015 (Fusion Middleware Innovation at Serta Simmons Bedding) JD Edwards Excellence Award, 2016

5 Agenda Cloud defined Cloud implementation considerations Where to start: A four-part framework On-premise vs. cloud On-premise vs. cloud planning The case for Oracle Enterprise Planning and Budgeting Cloud Service (EPBCS)

6 Cloud defined "A standardized IT capability (services, software or infrastructure) delivered in a payper-use, self-service way." Source: Forrester Research

7 Cloud defined common service models Infrastructure as a Service (IaaS) Platform as a Service (PaaS) Software as a Service (SaaS) On-premise software Applications Applications Applications Applications Data Data Data Data Runtime Runtime Runtime Runtime Middleware Middleware Middleware Middleware O/S O/S O/S O/S Virtualization Virtualization Virtualization Virtualization Legend Client manages Servers Storage Servers Storage Servers Storage Servers Storage Vendor manages Networking Networking Networking Networking SaaS model with comparisons to traditional On-Premise software.

8 Cloud defined common deployment models Hybrid cloud Private cloud Application 3 Application 1 Public cloud Application 2 On-premise applications Private cloud: A cloud infrastructure operated solely for a single organization, whether managed internally or by a third party, and hosted either internally or externally. Public cloud: Services are rendered over a network that is open for public use. Public cloud services may be free or offered on a pay-per-usage model. Hybrid cloud: A composition of two or more clouds (private, public, etc.) that remain distinct entities but are bound together. On Premise: Organization manages infrastructure. Hosts their own applications internally supported.

9 Cloud defined "The cloud has the potential to transform the way companies operate and enable businesses to access world-class software with little upfront cost." Source:

10 Cloud implementation considerations Automatic upgrades, ensure the organization always has the latest functionality Each new release reflects changes to regulations, saving time and supporting compliance efforts The subscription-based fee spreads the system costs out over time while keeping the application current Valuable IT resources are freed from maintaining legacy applications Mobile connectivity and overall improved user experience support social capabilities Companies can pay only for what they need and can add capacity and capabilities gradually as they grow More targeted deployments to address specific business challenges quickly Easier to scale, both as the organization grows and as adoption occurs Enables empowerment of business to support and maintain application / solution Overall reduced total cost of ownership (TCO)

11 Cloud implementation considerations Less than 25% Software licenses Implementation consulting Hardware Greater than 50% Subscription fees Implementation consulting Training and testing IT personnel Maintenance Training On-premise SaaS Ongoing costs Apply fixes, patches, upgrades (including testing) Downtime Performance tuning Upgrade Retrofit customizations Upgrade Retrofit integrations Upgrade dependent applications Ongoing burden on IT Maintain/Upgrade hardware Maintain/Upgrade network Maintain/Upgrade security Maintain/Upgrade database Ongoing costs Subscription fee Training new capabilities Configuration new capabilities Testing cycle 2 to 3 times a year based on new releases

12 Cloud implementation considerations Economic impacts Factor On-premise SaaS Cash flow Financial risk Expenditure type Income statement Balance sheet Servers and software are purchased upfront Entire financial risk is taken upfront, with uncertain return Capital expenditure (capex) Operating expense (opex) Maintenance and depreciated capital expense Software and hardware are carried as a long-term capital asset Payments are made as the service is provided Financial risk is taken monthly and is matched to return Operating expense (opex) Maintenance expense only Nothing appears on the balance sheet

13 Where to start "Executives must be aware of the expected benefits of cloud solutions, as well as the resources needed to achieve them." Source:

14 Where to start The approach helps companies determine which organizational could be best-served by the cloud

15 Where to start A four-part framework: Great applications from great companies Evaluate the software provider and its ongoing viability. Avoid selecting a wide range of software providers with one-off solutions. Cloud providers are quickly deploying or adding new functionality tremendous amount of R&D being spent. Choose software that can evolve with the business crawl, walk, run.

16 Where to start Total cost of ownership and ROI Undertake a cost-benefit analysis that considers all factors in some cases you will still have integration, data conversion, training requirements. Consider the value to the business: Address problem areas first to accelerate benefits. Reduce growing pains by implementing solutions that scale with you.

17 Where to start Organizational readiness Determine the degree of process redesign needed for business functions to adapt to the cloud products. Accepting the application as-is reduces upgrade maintenance and testing Vs. configuring the system to mirror current systems reduces the need for end users to adapt to the change of a new system. Position the organization for quickly accepting automatic updates provided by the vendor you still need to test.

18 Where to start Governance and compliance Consider your regulatory obligations and the potential changes your organization might see as you grow. Robust reporting is key to satisfying compliance make sure your cloud provider can deliver on advanced reporting. Assess the benefits and risks of moving sensitive data to the cloud.

19 Decision criteria Decision criteria Cost License economics Subscription Economics Expertise Build Internal expertise Leverage Vendor Expertise and Infrastructure Data Management Local Data Remote Data OK Level of Customization Extensions and Customization Capable Limited Extensions and No Customization On-premise Cloud/SaaS

20 Implementation guiding principles On-Premise Approach Cloud Approach Requirements Driven Solution Driven Extend & Customize Adapt Processes Big Bang Incremental Waterfall Methodology Iterative

21 Implementation considerations Implementation considerations - iterative Project Management Planning Design Build Test Deploy Iterate 2 3 times Visualize Configure Change Management

22 Implementation considerations Small Medium Large X-Large Process Prescriptive No Re-Engineering Prescriptive Re-Engineering Prescriptive Re-Engineering New Process Model Prescriptive Re-Engineering New Process Model Geography US Only Single Locations US Only Multiple Locations International 2 4 Countries International 5 Countries Plus Organizational Design Remains As Is Minor Changes Significant Changes Major Changes Data Conversion Master Data and Open Transactions Master Data and Open Transactions Master Data and Open Transactions Historical Transactions Master Data and Open Transactions Historical Transactions Integration None Some Many Many Application Extensions Change Adoption Services Partner Engagement Model Limited Some Many Many Not Required Limited Need Required for Success Required for Success Low Touch Medium Touch High Touch High Touch Duration Weeks 1-2 Months Multiple Months Months to Year

23 On-premise vs. cloud planning CHALLENGES Visibility Visibility Flexibility and Control Upgrades On-line, must universally be scheduled available, consolidated based IT results and business providing resource organization availability; "one version upgrades of the are truth" often stalled due to resource Incorporate constraints third party leading data tocreate new insights View Delayed details including availability stored of assumptions new capabilities that can be leveraged in order to enhance the budgeting process Flexibility and Control COST Issues with incompatibility of corporate Replace Excel with dynamic forms to upload and consolidate standards budgets such as operating system, MS Office and internet browsers Automate workflows to manage information Infrastructure is controlled by IT so information is often Built for a business user on secured platform updated by schedule, not on-demand On-premise solutions require IT resource expertise for Risk model and logic updates; solution cannot keep pace with changing Security to business limit read/write conditions access and by user needs due to lack of business self-service Single source of the truth means everyone is on the same page and can plan with the right information Quickly make changes to account for emerging trends Time and Maintenance Maintenance and upkeep of server, networking, and software Time spent on maintenance of on-premise system diverts IT organization's focus on customer facing, revenue generating applications Time and expense (e.g. new hardware, software and resource time) of upgrades / reimplementations

24 Planning cloud benefits & value BENEFITS Flexibility and Control VALUE Automated On-line, universally / Automatic available, updates consolidated and upgrades results providing organization "one version of the truth" Continuous availability of new capabilities that Incorporate third party data to create new insights can be leveraged in order to enhance the View budgeting details including process stored assumptions Minimize incompatibility of corporate standards such as operating system, MS Office and internet browsers More seamless availability to break-fix updates Information is often updated on-demand instead of in a scheduled manner Built for a business user maintenance and enhancements on secured platform Security to limit read/write access by user Single source of the truth means everyone is on the same page and can plan with the right information Quickly make changes to account for emerging trends Create a scalable process to advance along the Planning and Budgeting Maturity Model Server, networking, and software maintenance is shifted from IT organization to Cloud vendor IT organization is able to focus on customer facing, revenue generating applications Time and expense of upgrades / reimplementations is eliminated due to ongoing updates / upgrades provided in the background and facilitated by Cloud vendor on a regular cadence (e.g. monthly, quarterly)

25 Planning cloud capabilities & benefits Visibility Holistic reporting provided through formatted reports as well as online dashboards Allows users to interact with data and gain new insights Business maintained integration with GLs and other systems Drilling capabilities provides users the ability to view details including stored assumptions

26 Planning cloud capabilities & benefits Flexibility & control Dynamic forms to input and consolidate budgets Automated workflows assist users and FP&A with budget progress tracking / task lists and versioning better manages budget iterations Business users can easily maintain models and calculation logic using business language driven rules wizards

27 Planning cloud capabilities & benefits Risk mitigation Application scales with the organization and its planning needs including changing data, model / driver, and user requirements Multi-environment application framework allows for proper testing of new models / drivers before they are introduced to end users Security and access controls ensure information is accessed properly Single source of the truth means everyone is on the same page and can plan with the right information

28 Sample planning cloud roadmap Multi-Stage Cloud Deployment Multiple chances to achieve ROI Pre-implementation costs alone lower the bar Flight path is primed for future cloud applications Single Stage On-premise Deployment One chance to reach ROI expectations Pre-implementation costs alone raise the bar Subsequent launches (projects) require new investment cycles Longer projects with periods of recovery in between, lengthening time-to-value Phase 3 Updates Future Enhancements Phase 2 Updates Initial Implementation Cloud software subscription Implementation Infrastructure and support On-premise software purchase

29 Integrated planning works better Low confidence in plans without direct links to all business units Integrated planning enables companies to plan faster with less effort and greater accuracy/agility Source: Ventana Research Next-Generation Business Planning Benchmark Research

30 Top benefits of moving to cloud 61% 56% Quicker Results Improvement in Service 43% 52% 57% 59% 59% 62% User Acceptance Availability to a Wider Audience Performance Implementation Scalability Functionality

31 Hyperion Planning comparison On-Premise Hyperion Planning No limit to number of applications from a licensing perspective Classic or EPMA E/PBCS 3 planning business processes (BSO), 4 reporting cubes (ASO). 4 pre-built business processes available in EPBCS (Financials, Projects, Workforce, Capital) Solely classic Many environments Components available FR studio client Typically big-bang implementations Manual patches/upgrades Maintained/updated by IT Blank slate methodology where all features must be built Drill-through to any source using FDMEE Solely pre-prod and production Components integrated FR studio client & web Typically phased / iterative implementations Automatic patches/upgrades Wizards provide business administrators / power users self service and administration; Academy and feature starter videos Incrementally enable built in features and processes, as you need Drill-through available to Oracle ERPs; to other sources solely thru on-premise FDMEE*

32 Features included with E/PBCS PBCS EPBCS Data Management (FDMEE) RDMBS 3 BSO Cubes 4 ASO Cubes Financial Reporting Smart View Financials Workforce Projects Capital

33 E/PBCS considerations High ROI Full blown features similar to on-premise Hyperion Planning Scalable and performant with larger data models Low recurring charge: User based subscription $120 / user Included software Data Management (FDMEE), Planning Front-end (RDBMS), 3 BSO cubes, 4 ASO cubes, FR, Smart View Upgradable from on-premise Monthly fixes and frequent enhancements with no cost to customer

34 E/PBCS considerations Enterprise grade Backup restore SSO Recovery Certifications Oracle data centers

35 E/PBCS considerations Federated Deployment LOB owned custom application Fully customizable for needs of any LOB or industry specific needs Create application for any business planning process

36 PBCS 2015 enhancements Valid Intersections Define valid and invalid data intersections End users only interact with valid intersections Users see only relevant information Speeds planning process Optimizes information rendered to users Define Valid Intersections-Based on Attribute (Feb 2017 Enhancement) Excel Formula Editor Write Calculations with Excel syntax Formula Persisted with member reference Business users drive Calculations Smart Push Associate Data Map Rules to Forms Move Data on Save of Form Option to associate relational data as part of move Move Data from BSO to ASO/BSO Immediate update of full planning data for reporting and analysis Sandbox User defined versions on the Fly Calculate and Aggregate instantaneous Honors security and access rights Independent what-if analysis, iterative modeling

37 E/PBCS 2016 enhancements Availability of EPBCS Home Page Shortcuts Editable Dashboards - Assign Access for Dashboards Structures for Navigation Attribute Dimensions - Use as Filter and as dimension in Forms and Reports Hierarchal Views - Forms, tasks, Reports Right Click menus Customizable Localization Variables Support in EPM Automate Simplified multicurrency option Web-based Predictive Planning Service Administrator can set Simplified UI as default for all users Note: Starting in Dec 2017 all service functionality will solely be available through the Simplified UI Document Upload LCM and User Provisioning in Simplified UI Granular Planning Roles Web FR Studio Technology Uptakes from Customer Resolutions - HSGetVal/SetVal performance improvements - Metadata Load performance - Larger Ad-hoc Grids supported in Smart View - Smart Push optimization - Incremental database refresh Improved time

38 EPBCS versus PBCS Configurable cloud-based platform for Enterprise Planning Pre-built, configurable, best practice planning: Financial Statement Planning Pre-built, configurable best practice planning: Workforce Planning (HR & Finance) Pre-built, configurable, best practice planning: Project Financial Planning Pre-built, configurable, best practice planning: Capital Expenditure Planning Administrative wizards Planning content fully-upgraded by Oracle Enterprise PBCS PBCS

39 EPBCS pre-built modules Packaged modules Financial Planning: Integrated driverbased planning for the income statement, balance sheet, & cash flow Workforce Planning: Headcount & compensation planning to link financial plans with the workforce Capital Planning: Planning for the longterm impact of capital assets on financial plans Project Financial Planning: Bridging the gap between project planning systems and the financial planning process Quick and extensible Supports Phased implementations Wizard-driven setup and Maintenance Plug-and-play extensibility

40 EPBCS enhanced features $ Driver-based Accounts Out-of-box and configured drivers can be used to calculate trial balance accounts: Pattern trending of drivers % Increase/decrease Manually adjust Trend-based Accounts Accounts that are not easily based on drivers can be setup as Trendbased accounts: Pattern trending on expense % Increase/Decrease Manually adjust Manual Accounts Some trial balance accounts, such as tax expense, may just be manually entered or imported. Traditional planning short-cuts

41 EPBCS financials Revenue Configurable "framework" for revenue/gross margin planning "Flex Dimensions" such as Product, Market, Customer, etc Expense Configurable "framework" for driver-based & trends-based planning Pre-built, best practice expense drivers Optional pre-built integration with Workforce & Capital processes Balance Sheet Fully integrated with Income Statement & Cash Flow Configurable for industry-specific requirements Cash Flow Fully integrated Cash Flow focusing on Cash from Operations Both "direct" & "indirect" cash flow methods supported

42 EPBCS workforce Compensation Planning Configurable "framework" for compensation expenses Plan by employee, by job or both Wizard-based configuration of benefits and tax expense Other Expenses Configurable driver-based planning for related expenses Travel & entertainment Training Communications Strategic Workforce Planning Long-range headcount planning by skill set Aligns strategy with execution & costs Predictive analytics for key drivers e.g. attrition %, retirement % Demographics Configurable reporting on employee-level demographics Pre-built dashboards and reporting

43 EPBCS capital planning Investment Driver based asset related expense planning, to get full P&L impacts Depreciation & Amortization calculations Cash flow planning and funding for investments Lease Assets Planning with "Buy vs. Lease" comparisons Existing Assets Planning for asset related expenses (e.g. repairs, insurance, etc) Retirements, transfers and improvements planning Managing existing leased assets Intangibles New & existing intangibles planning Amortization and cash flow planning Intangible impairments Analysis Overall capital expenses spends and detailed analysis Plan vs. actual variances Balance sheet, income statement, and cash flow impacts

44 EPBCS project planning Project Summary Total Project View Both Internal and External Projects + Approvals Simplified way to manage Project details and enable continuous planning Additional extensions with vendor, program, stage flavors Expense Best practice driver based models for labor, material, equipment planning Time & Material, Cost Plus or Direct Revenue configurable for each industry Capitalized expenses for Capital Project, with Integration to Capital Revenue Comprehensive revenue modeling for Contract Projects Project Benefits for Internal Projects: Financial/Non Financials measures Analysis Out of box analysis and reports to review Project performance Project Revenue, Expenses and Cash flows Real time metrics: NPV, Payback, IRR, ROI, to cover project performance EVM measures to track Project Variances and performance

45 The case for EPBCS Case study HCM Independent investment and wealth management firm with $33B in assets under management Core need was to replace aging Microsoft ERP system with a solution that could grow with them Immediate priority was to implement ERP Cloud and HCM Cloud Grant Thornton extended the to solution to include PBCS to support: Budgeting Quarterly forecasting Five year forecast Profitability reporting Integrated actual data from Oracle ERP Cloud Automated both single and multi-layer allocations Incorporated the ability to capture upside vs. downside projections Extended the use of Financial Reporting Studio Actuals Cloud ERP PBCS Budget Financial Reporting Studio

46 The case for EPBCS Company Overview & Situation Privately-held manufacturer and distributor of replacement parts to the vehicle aftermarket in North America; Founded in 1987 and headquartered in Daphne, Alabama Products include alternators, starters, steering pumps, rack and pinion products, and brake calipers Implemented a leading ERP system but budgeting and forecasting remained in Excel Reporting of consolidated data required extensive mapping and Excel manipulation Project Focus and Outcomes Created a new CoA specifically designed to provide the required reporting view Implemented data management to map data from the source systems to PBCS Built input templates to support target planning, budgeting and forecasting Enabled trend-based budget seeding and currency conversion Developed a custom sales budgeting module enabling planning by product and sales rep Deployed an automated Cash Flow statement Loaded and validated multi-year history Moving Budgeting from Excel: Case Study Benefits & Value Achieved Streamlined mapping and loading of Actual data to a reporting-friendly structure Enabled a central repository for actual, budget and forecast data Integrated Sales and financial planning Deployed SmartView as the primary reporting tool for FP&A

47 Which solution best fits your needs?

48 Q&A

49 Thank you for attending our session! If you have any follow-up questions please don t hesitate to contact me directly with my contact information below: Brad Kwiatek T: E: Brad.Kwiatek@us.gt.com

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51 Upcoming events Find Grant Thornton at these upcoming events: April 11-13: Modern Finance Experience and HCM World in Boston, MA April 18 webcast: Finishing strong in the ASC 606 marathon: An in-depth look at designing for success April 19 webcast: Including Taleo in your Oracle ERP investment April 24-27: SuiteWorld in Las Vegas, NV May 17 webcast: Oracle Cloud HCM releases, patches and enhancements, oh my! June 6-9: OHUG global conference in Orlando, FL June 8 webcast: Project management for HCM Cloud implementations June 14 webcast: Getting to know all about you "Profile Management" June 18-21: HIUG Interact in Orlando, FL July 13 webcast: Oh the places you will go be a Maestro, with composer in the clouds Find your silver lining in the cloud: grantthornton.com/silverlining

52 Please look for those wearing Education Committee ribbons to share feedback on this week s sessions!