How to successfully separate and set-up HFM for a new company

Transcription

1 How to successfully separate and set-up HFM for a new company Ray Chontos Finit Kathleen Marschak Adient

2 Finit Culture PRIVATELY OWNED TAILORS OF OUR CRAFT QUALITY MINDSET CLIENT SATISFACTION Nodebt or external ownership means completealignment & focus on our client s needs and vision We bring a quality of craftsmanship to our designs and execution that lead to solutions that are functional, usable and efficient We actively seek feedback and invest in training and professional growth in our consultants We use employees, not contractors. Compensation based on CLIENT SATISFACTION

3 Leader in Oracle Hyperion Solutions

4 About the Presenters Ray Chontos 19+ years of Hyperion Experience HFM, FDM, FCM, Financial Reporting, Smart View, DRM, Hyperion Enterprise Project Manager and HFM Design Architect Kathleen Marschak 14+ years of Hyperion Experience HFM Products, Hyperion Enterprise, COE Operations, Release Management & Compliance Adient HFM COE Manager

5 Agenda Review the process and methods to support the dismantling of one of the largest HFM environments in the world Untangle Johnson Controls Environment / HFM Apps Creation of Adient HFM Infrastructure Application Design/Build Data Reconciliation Approach/Challenges Integration Parallels /Go-Live Adaptation of business requirements to Become Adient Adient Today Questions

6 JCI / Adient History Johnson Controls (JCI), a Global multi-industrial company, had core business in the automotive, building and energy storage industries Founded in ,000 Employees 150+ Countries $37B in Sales Automotive Experience Building Efficiency Power Solutions. A global leader in automotive seating, overhead systems, floor consoles, door panels and instrument panels. Delivering technologies and services that increase efficiency and lower operational and energy costs in buildings. The world s largest manufacturer of automotive batteries, powering nearly every type of vehicle.

7 Adient Birth In July of 2015, JCI Executive Leadership announced that the Automotive BU was not a future core business, and the Business Unit was going to be spun-off to a stand alone company Automotive Experience 75,000 Employees 33 Countries $16B in Sales A global leader in automotive seating, overhead systems, floor consoles, door panels and instrument panels..

8 JCI s Total HFM Footprint 2015 One of the largest HFM environments in the world Five Integrated & Two Stand-alone Applications 3,600 Users World-wide 60,000 + Unique entities 16 Entity structures 6,300 + Accounts 40 + Scenarios G/Ls loaded / FDM locations 150 changes per month in average releases 60 + Servers in the infrastructure

9 JCI s Automotive HFM Application One of the largest HFM applications in the world AEHFM Automotive Experience HFM 1,600 Users from 33 countries 20,000 + Unique entities 4 Entity structures 2,500 + Accounts 10 + Scenarios 60 + G/Ls loaded / FDM locations 40 + changes per month in average releases FDM, FR, DRM, EPM Maestro

10 Separation Considerations & Timeline Project timeline December 2015 December 2016 Separation project could not impact current JCI Operations and Tyco Merger Approach was to Clone and Go existing JCI Automotive app to support following key dates: Operational day 1 (July 1 st, 2016) Adient operating separately from JCI; Adient leadership and employees identified Legal day 1 (October 31 st, 2016) Company is legally separated and begins trading on NYSE

11 Automotive Separation Impact HFM System: A new Adient HFM to be designed and built JCI s AEHFM application to be retired HFM Users/Licenses: Adient HFM users had to be identified and licenses distributed according to account for the creation of central functions (Tax, Treasury, Consolidation etc.) which had never been part of the Automotive Business Unit before HFM COE Team: JCI HFM CoE employees had to join the Adient team, resulting in a re-alignment of JCI CoE Adient employees had to support JCI as needed through separation AND be invested in the separation project HFM Process & Procedures: SOX policies and operational procedure had to be adapted: Interim Period (July November): project was audited prior to separation Post Go-Live: Adient HFM was audited one month post go-live

12 Established Project Team Towers FINIT Partner Adient Steering Committee JCI HFM CoE Director Matched Pairs Throughout Adient and Finit Program Director Team Members Adient and Finit Carve Out Leads Adient and Finit Application Leads Adient and Finit Platform Leads Adient and Finit Integration Leads Adient and Finit Process Leads JCI AE Carve Out Adient STAND-UP Role SME Alignment & Support -Legal Entity Separation HFM Changes -AE App preparation for separation -Account Reconciliation (ARM) separation - JCI AE HFM/FDM application JCI RemainCo - JCI AE HFM/FDM retirement APPLICATION -Adient App design/build/test -Historical data conversion -Performance /UAT testing -Parallel planning and execution PLATFORM -Infrastructure design & hardware procurement requirements - Software installation - System Testing - Load Testing - DR/Back-up Plan/Test - Load INTEGRATION -Integration Inventory, approach & disposition (Adient vs JCI RemainCo) -Inbound (SAP Genesis, Non Genesis) - FDM App design /build/test (HFM/ARM) -Outbound (BPC, BBP, Tax) -Integration Testing JCI/Adient Key Resources / Subject Matter Experts PROCESS/TOOLS - Internal Controls/Audit - End User Support (Remedy/Portal) -User Provisioning(ITARIS) - Change Mgmt/ Governance (Sharepoint) -Communication/ Portal

13 Refocused Project Team Towers After HFM Applications were built and Platform fully tested the team re-aligned on critical path activities Adient and Finit Tower Leads SIT/UAT Parallel Cutover/ Hyper-care COE Standup/ Ops Joint Venture - UAT Scope - Application Readiness - UAT Task Plan - SIT - Connectivity Testing - Tracking/Issu e Resolution - Parallel Scope and Approach - Parallel Communication Support - Parallel Support - Status, Issue and Resolution Tracking - Execute CoE Parallel - Parallel Cutover Activities - Cutover checklist - Cutover communications - Full user review and sign-off for Adient - Turn off integrations to JCI - ARM Historical Data Solution - Adient go-live support - Adient CoE tools and process transition - Organization establishment - Define Adient CoE Processes - Set-up CoE Tools - CoE Introduction and Communications with Adient - CoE Go-Live - EPM Maestro - Copy Falcon to Adient environment - Application Testing - SIT / Integration - Connectivity Testing - Cutover and Go- Live Activities JCI/Adient Key Resources / Subject Matter Experts

14 High-Level Approach & Timing

15 Infrastructure Considerations New Data Center Milwaukee, WI to Suwanee, GA 2 dedicated VMs for Admin tasks (Release activity) Equipment Order/Build 40 Servers : PROD (21), QA (13), DEV (6) and 10 Servers for DR ~ 600 GB of Applications (400 GB for the historical application) Physical Servers for PROD, private network setup, all in 2 enclosures Environment Readiness Order : PROD > QA > DEV Testing 2 rounds of testing, small/medium/large dataset, user concurrency of Components : SmartView, Data Grids, FR, FDM Loads, HFM Consolidations Network separation 4 rounds of separation tests (firewall rules implemented for TSA applications)

16 Infrastructure Adient Current

17 Performance Monitoring Server Stat collection CPUs, Disc Space, RAM, Memory Stress Testing add users WebLogic Service Monitoring Deeper than the Services Control Panel Log File Consolidation Central location for details on network and overall performance monitoring Alerts CPU, Memory Disc Space Financial Reports Tracking Consolidation Performance Monitoring How has it changed?

18 Finit Performance Monitoring Tool Real Time (and Historical) system-wide performance monitoring Proactive notification; stress testing Tests/Response Time Tests run with 750 users LOAD TEST ON PROD FROM MILWAUKEE For the round 2 full-scale load test we looked to simulate the estimated number of concurrent users in the system. The user count we used is based on the concurrent users that might be logged in for that activity. With this test we are looking to ensure that the performance is consistent and the servers show no signs of stress. At the peak of the test we had 750 and 1500 users in the system performing their work. The activity for this test was users logging in, open app, open a small grid, generating a small SV, and running small consol. The two charts highlight the fact that the response times did degrade as the number of users in the system increased, but the response time showed was a linear degradation: Tests/Response Time Tests with 1500 users CPU usage for the 2 HFM app servers

19 Performance Testing Results Major mile stone achieved with the amount of performance testing with notable results

20 Finit Performance Rules Profiling Program that analyzes an HFM Rules file and inserts timers. Results show rule execution timings by Sub Routine, Entity, Value, Period, and Scenario Profiler reveals the processing cost of each sub routine in your rules file, and pinpoints where to spend time on rules cleanup.

21 Finit Performance Rules Profiling Shows how long each rules takes to process

22 Application Design & Build Recon Recon Data ADHIST FY2016 Historica l New ADHFM App = AEHFM Shell New Corp Entities Corp Accounts Segment changes Legal Entity Updates Design Requirements: Central reporting entities had to be split from JCI corporate application AE Legal entities had to be classified as Share or Asset sales and set-up in Adient Corporate accounts and Adient Segments identified to support external reporting Challenges: Creation and tie-out FY 2017 beginning balances with no consolidated source system to tie-back to Provide platform for FY16 year-over-year comparison including JCI entities that no longer exist in Adient per LES New CTHFM App = JCHFM Shell Segment changes BU COA JCI, BE, PS Entities JCI, BE, PS Accounts JCI, BE, PS Segments

23 Through Review of Key Design Items ID Key Decision Alternatives Considerations / Implications Recommendation and Decision KD-001 Legacy JCI Entities 1. Delete TOT entities 2. Keep TOT entities Keeping TOT entities will allow for easier reporting between Adient HFM and Historical copy of AEHFM for FY17. Keeping TOT entities may have slight impact to Adient HFM performance/consolidations. Team Recommendation& Rationale: Analysis performed showed minimal impact to consolidations. The benefit of easier reporting between the two HFM applications outweighs the minimal performance impact. Decision Taken: Keep TOT Entities KD-002 Delete GCOA from Adient HFM 1. DeleteBUAccount hierarchy and only keep GCOA 2. Keep both GCOA and BUAccount hierarchies in Adient HFM Each account hierarchy was designed for different reporting reasons. BUAccount Has detail to support manufacturing reporting in COS and SGA. Has distinct rollups to separate Admin vs Engineering expenses. GCOA Designed to support external reporting with distinct rollup of accounts. Team Recommendation& Rationale: Both account hierarchies are needed to support management and external reporting the way they are currently designed. Decision Taken: Keep Both GCOA and BUAccount CoA Hierarchies in Adient HFM. BUAccount and GCOA tie at higher levels (Seginc, Sales, COS, SGA for example). Having both account rollups has no impact to HFM consolidation performance.

24 Corporatizing Adient HFM Functional Area Security Corporate Entities Corporate Accounts Corporate Allocations ICP Changes Description of Change Add security to separate access from Adient Operations, Adient Corporate and Adient Total Add entity hierarchy to support Corporate functions Examples: Tax, Treasury, HR, IT, Finance, Legal Add additional Accounts to support Corporate/External reporting Examples Goodwill Impairment, Medical Clearing, Savings Investment Plan, Common Stock External, Tax Receivables, Deferred Compensation Allocate Corporate functions to External Segments Non-Adient IC partners will be removed from Adient HFM (JCI RemainCo, PS, BE, Corp)

25 Beginning Balance & Data Recon Beginning Balance Requirements: FY16 Sep YTD to naturally populate FY2017 Adient opening balance sheet Parallel data must be fully validated; required finance sign-off Adjustment entries done using outside consulting system (KART) had to be reflected in Adient HFM Finance moved Retained Earning to Additional Paid in Capital (APIC) as required October 2017 had to be accurate in ADHFM to support Quarterly filings Data Reconciliation Approach: Process was to tie back to source systems for legal entities/profit centers Many to one profit centers had to be accounted Asset sale entities had to be accounted for where not all the balances moved

26 Data Recon Challenges Spin-off was based on Asset and Share Sales of Legal Entities Adient didn t receive everything it once had There was no Total to tie back to Data recon highlighted additional transactions between Adient and JCI Approximately 50 Entities were added back to Adient as result of data recon Entries needed to complete the sale/purchase

27 Integration Overview 48 ERPs, 95 FDM Locations 198 Auto-loading entities (flat files bypassing FDM mapping) Network changes Source ERP database moves and domain changes Processes to support 2 environments Had to send data to both JCI and Adient until legal split final

28 Integration Flow &Timeline Co- Existence model to support data integration between JCI and Adient Integration Testing Round 1 - IT Personnel - Only ERPs w/ Auto- Transfer or Auto-Load - Technical and Connectivity Tests Final Updates: Adient & JCI HFM & FDM Integration Testing Round 2 - BU/Local Finance Teams - All ERPs / Sources (including manual loaders) - Full End-to-End: Extract, Load & Validate Data Mappings July Oct: Parallel Month- Ends Close Books in Both Adient & JCI

29 Critical Path Key Business Readiness Gates Project Team Readiness Gates Critical Path Parallel data is real will be used at go-live Go/No-Go not an option, the legal separation was happening Application changes to support growing requirements

30 Parallel Success Criteria

31 Parallels HFM Team had to support 4 parallel closes between July 1 (Operational Day 1) and October 31 (Legal Day 1) AE BU had to close as-is with current processes/hfm systems through October FY17 Adient began parallel closes on Day 8-12 for July October month ends

32 Communication Strategy Purpose Content Stakeholder (Audience) Delivery Method Schedule/Timin g Developer Owner Steering Committee Make decisions Escalate issues/risks Share program status Status scorecard Key decisions Change Impacts Issue escalations SME requirements Adient Finance Leadership Meeting HFM program team Once a month Kathleen HFM program team & select Finance team members Cyclone IT HFM Program Status AE Ops Parallel Kickoff Meeting Adient HFM Program Overview SIT #2 Testing Overview Parallel Testing AE Ops / BBP Review IT status for program pillars Escalate issues/risks Information sharing Provide guidance and timing on upcoming UAT / Parallel General awareness Expectation Setting Drive engagement Inform & engage data loaders for Integration Round #2 testing Provide timing, expectations and success criteria of Parallel Parallel Testing Corp HQ / Provide timing, expectations and Consolidations/Tax success criteria of Parallel Parallel Report Out Go-live Cutover/Transition Report of issues, process changes and lessons learned to support the next parallel. Notify users of system downtime and activities that are leading up to final cut-over and ADHFM system availability. Select key areas to test prior to system availability for all users. Pillar scorecards Topical material Parallel Overview to AE finance leaders IT HFM Program Team Expectations and Timing All Adient HFM of Parallel Close activities users Expectations and Timing of SIT#2 testing Meeting All HFM Users - General HFM Detail Task list and timing Month end User - of completion. Task List BBP Users All Corp Adient Detail Task list and timing Users/Consolidatio of completion. n team and Tax All Corp Adient Parallel Report Card Users/Consolidatio n team and Tax Adient HFM COE portal presence introduction. Twice a week Pillar leads Sudhir Nambiar Finance Leaders Meeting May 23rd Todd Todd June 30th Todd/Greg Mark Skonieczny Data Loaders July 1st Chris Todd / Manuel All HFM Users / Steering Committee July 22nd July 22nd After each parallel Chris/Ray& Todd Chris/Ray & Manuel Robert/Tod d November 11th Kathleen / Amit Todd Manuel/Greg Todd/Greg Kathleen

33 Process Model to Support Adient

34 Becoming Adient Reporting Requirements Adient s Executive leadership required the following changes prior to go-live: CoA updates and new management hierarchy Separate QA application developed and built in parallel New reporting changes were released prior to last parallel Month- End Close Standard Smart View reporting package based on new CoA and Management reporting structure

35 Adient Today Dashboard Reporting Adient has implemented CXO Cockpit to meet Executive business requirement of creating a standardized reporting deck and mobile dashboards Project was executed in January with positive feedback; initial user pilot was higher-level leadership CXO Tool has been extended to additional 200 users based on successful pilot

36 Adient Today Local GAAP Repository / German Consolidation Adient HFM currently stores only US GAAP data Project allowed the load local statutory balances into HFM for all Legal Entities Benefits Improves efficiency; allows a consolidated tax return for Germany (30+ legal entities) Centralizes data into HFM instead of multiple ERP s Allows easy comparison to US GAAP data Application went live in September support FY2016 and FY2017 reporting

37 Adient Today Futuris acquisition Completed in September 2017 Integrated 15 operational facilities into Adient HFM reporting Data loaded from Futuris HFM application Long term vision is to add to Adient s G/L system and load directly to Adient HFM and decommission Futuris HFM

38 Lessons Learned / Success Factors Business Partnership Strategic alignment with key IT and senior Finance Leadership Standard cadence of meetings and status reporting Effective Steering Committee participation which provided key support and fostered quick decision making Exceptional change management Finit consulting partners had previous exposure to JCI HFM footprint and agile attitude Excellent JCI/Adient Team

39 Questions and Answers Ray Chontos Kathleen Marschak