Introduction to Hyperion PCM

Alex Ladd

Senior Partner

MindStream Analytics

aladd@mindstreamanalytics.com

twitter: @

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EPM Connection Point - Seattle

EPM/BI Conference Presented by Oracle Applications Users Group (OAUG), Northwest

Oracle Users Group (NOUG), OAUG Hyperion SIG and the OAUG BI SIG

July 20-21, 2011

Hyatt Regency Bellevue Seattle, WA USA

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Agenda

• What is HPCM

• The HPCM Lingo

• Is HPCM the scariest product ever?

• The components of HPCM

• Using HPCM

• Genealogy

• Things you should know

• Questions

What is HPCM

-Oracle

• Hyperion Profitability & Cost Management

– Accurately assign, measure, and manage costs and revenues

– Use any methodology to transform financial data through

multiple stages

– Compute costs and profitability for business segments

– Use scenarios to evaluate alternate approaches

What is HPCM

-Alex

• Hyperion Profitability & Cost Management

– Software that allows a company to develop a repeatable,

process for assigning costs to products and customers based

on drivers and activities with a common communicated

methodology that is easily documented.

– Profitability Costing Model that can use Activity Based Costing

methodology or other costing methodologies

– Allows for broad dissemination of the methodology being used

for all costs or departments

HPCM Architecture

Essbase BSO

Web Management and Input Forms

Essbase ReportingCube

EssbaseASO

ReportingCube

Web Analysis, Financial Reporting, Excel,Smartview

Hyperion Profitability & Cost Management

Does the Architecture look familiar?

Essbase

BSO

Web Analysis, Financial Reporting, Excel,Smartview

Web Management and Input Forms

Hyperion Planning

Why HPCM?

• Replaces process that is done in Excel in most

companies

– Really? Seriously? They say that for every product!

• Essbase Allocation models can have draw backs

– Essbase Allocation models require constant documentation

updates, calc script updates and sometimes creative dimension

usage

• HPCM stores all the decisions about source and targets for each

Point of View and automatically generates calc scripts

• Planning is really for budgeting and Planning, it is built

to allow visibility and ease of use around the Planning

process

– HPCM is built for the Allocation process

HPCM Quick Facts

• Oracle/Hyperion worked with The Player Group to

develop and implement HPCM at the first client.

• First implementation was led by John Van Puffelen from

Oracle in 2009.

• HPCM uses Block Storage (BSO) to calculate data and

Aggregate Storage (ASO) for reporting and analysis.

• HPCM REQUIRES the use of EPMA

– Needs Dimension Library

– HPCM utilizes EPMA’s data transfer functionality

HPCM Lingo• Models

– A model is the total of a number of stages and allocations that

create the Profitability model. The term model is used as a

synonym for application. Each HPCM application would be a

model.

• Point of View

– A Point of View in HPCM is different than in any other Hyperion

application. The POV in HPCM is not just your current view of

the data. In HPCM POVs are a part of the process flow, they

move from Draft to Published to Archived. In HPCM the POV is

effectively a version.

• Drivers

– The method for calculating the allocation

– Examples: # of applicants, square footage, # of service calls

HPCM Lingo

• Formula Types

– 8 different formula types;

• Simple, Simple Weighted, Variable, Variable Weighted, Fixed and

Variable, Even, Percentage, Custom

• Assignments

– Create relationships between a source and destination for each

member in the model

• The destination for one relationship becomes the source for the next

relationship in the allocation flow

• Example: Facilities costs allocated to HR and then HR is allocated

to operational departments that are allocation to product.

• Which stage/node gets “linked” to a downstream stage/node).

Assignment Rules can be created and used to both “reuse”

common assignments or to capture any changes in the model

outline.

Stages

– Sequence the Allocation Flow

– May contain up to 3 dimensions

– May be as many as 9 Stages

– A “level of transformation”, within a model, that financial values

may pass through

– Stages are a group of allocations that have commonalities

• Not necessarily allocation commonalities but process commonalities

– Example:

• Stage 1: Facilities Dept and HR Dept being allocated to other

departments within the company. Both are allocated to all other

departments by hard values; square footage and headcount

• Stage 2: Customer Service and Accounts Receivable allocated

based on activities; service call and outstanding receivables

respectfully

Stages – Another example

Departments / Accounts

Departments / Activities

Products

Customers

Customer / Product /Regions

General Ledger

BusinessOperations

Products

Customers

Markets

Is HPCM the scariest Hyperion Product Ever

• Why is HPCM scary?

– Besides coming up with a new definition and use of a

commonly used term like Point of View

– Besides all the new terminology like stages and genealogy

– That’s right, I haven’t mentioned genealogy yet. Didn’t want to scare

you off.

– Besides using a web application server, a relational repository

and not one but TWO flavors of Essbase

• Put all of those things aside and it’s still just a meta

data outline that goes into Essbase and then runs some

allocations, right?

This…

Becomes this!

Actually not that bad

• REMEMBER

– Stages can utilize multiple dimensions and different stages can

reuse the same dimension.

• So, when HPCM creates it’s Essbase outline it needs to create

multiple dimensions that are really the same dimension. Have a

look:

The dimensions for the OPS stage

The dimensions for the MKT stage

The components of HPCM

• Stages

• Drivers

• Assignments

• Calculations

• Genealogies

• Meta Data

• EPMA

• Calculation Cube

• Reporting Cube

• Web Forms

Process Application

Using HPCM

Metadata Management

AllocationModel Definition

Cost & RevenueAllocation Calculations

Profitability & Cost Analysis

• Create & Manage Dimensional Hierarchies

• Deploy the Application

Create & Manage Business Model:• Stages of

Allocations• Drivers• Allocation Rules• Automated

CalcScript Generation

• Store Cost, Revenue & Driver Data

• Calculate Model & Store Results

• Validate the Model• Generate the

Reporting Cube

Reporting Cube with Allocation Genealogy• Profitability

Analysis• Cost & Revenue

Contribution Analysis

Create & Deploy

• Create Dimensions in EPMA

• Create Profitability Application in EPMA– Required System Dimensions:

• Measures

• Must be tagged as Dimension Type “Measures”

• System will automatically insert system members

• Measure defaults to dense dimension and dynamic for ASO

• Allocation Type

– Required User Dimensions:

• At least 1 POV Dim – No more than 4

• At least 1 Business Dim – Organization Modeling Hierarchies

Setup Model

• Set Model Preferences

– Is this Allocation Model for Costs? Yes or No

– Is this Allocation Model for Revenues? Yes or No

– Will IntraStage Assignments be allowed? Yes or No

– Are Stages allowed to be multidimensional? Yes or No

• Create the stages of allocations

– These are the groups of allocations

– You may assign pre and/or post calculation scripts to each

stage

• Enable your POVs

• Load Data

Define Drivers

• Are the methods of calculation at the allocation points

• Are attached to source member intersections in

allocations

• Drivers have formula types:

– A formula can be made up of any combination of numeric

values and functions

– Pre-defined driver types provide a template

– Custom drivers use Essbase CalcScript formulas

• Drivers must be assigned to any intersection that

contains cost or revenue in order for the value to be

allocated

• Driver selections may change from POV to POV

Driver Selection Notes

• Apply the driver to the entire dimension by selecting the

top level.

– The driver is inherited by every member within that dimension

• Apply the driver to a portion of the hierarchy.

– Descendents of the selected member inherit the driver

• Apply the driver specifically to a single member

• Apply the driver to a single intersection within a

member

Create Assignments

• Assignments are unique for every POV

• Assignments can be explicit

– Source A is assigned to Destination B and C

• Assignments can be based on a rule

– Can follow standard Hyperion hierarchy relationships

Calculate

• Validate Model

• Generate Calc Scripts

• Execute Calc Scripts

• Validate Calc Scripts Execution

• Generate Genealogy

• Transfer Data to Reporting Cube

Genealogy

The Genealogy is the tracing of costs through the model

– How much of Resource 1 supports Customer 2?

Customer 1

Customer 2

Activity 1

Resource 1

Resource 2

$6000

$4000

$2000$3000

$1000

$2800

$4200

$4000

$2100

$900Activity 2

$7000

$3000

$4900

$5100

Some Information on Genealogy

• Genealogy can be created based on three different

options:

– Full Matrix

• Checks every possible path

• Longest Calc Script generation

• Fastest Calculation Execution time

– Source Based

• Only checks paths from Stage one sources with $$

• Faster Calc Script generation

• Longer Calc execution time

– Allocation Based

• Only checks paths from Stage one sources with assignments

• Fastest Calc Script generation

• Longest Calc execution time

Essbase Considerations

• Since Dimensions are reused Essbase is set to allow

duplicate names

– So what?

• This becomes important when loading data

• This is also important when writing custom allocation scripts

• "[MKTProducts]@[High Bar]“ or "[GLAccounts].[NoMember]"

• Calc Script names

– The names of the calc scripts generated by HPCM are

significant so that validation and error checking is easy

Calc Script Names

d Driver

j Driver Intrastage

a Allocation

i Allocation

Intrastage

g Genealogy

r Revenue

Allocation

S Revenue Driver

•{CalcType}

d{nn}2_1

{POV}

{Stage}

HPCM Pros/Cons

• Prepackaged (No

development)

• Any Cost Allocation

Methodology

• Model Validation

• Traceability

• Genealogy

• Non-Unique Names

causes data loading to

be cumbersome

• Scary at first glance

Pros Cons

32

QuestionsQuestions

Contact Information

Email: aladd@mindstreamanalytics.com

Telephone: 917-579-0926

For a copy of this presentation with detailed notes, please go to

http://www.mindstreamanalytics.com/presentations.html