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Introduction

to

Hyperion Profitability and Cost Management

Presented By :Amit Sharma

About Profitability and Cost Management

Oracle Hyperion Profitability and Cost Management, Fusion Edition is an analytic application that manages the cost and revenue allocations that are necessary to compute profitability for a business segment, such as a product, customer, region, or branch.

  • 1. It allows profitability or cost measurement of business segments.

  • 2. It is designed to cost decomposition, consumption-based costing and scenario-playing to measure profitability.

  • 3. It play an important role in cost analysis and cost bench marking.

Hyperion Profitability and Cost Management

Architecture

As given in below diagram, HPCM uses two kinds of cubes, Oracle Essbase BSO for calculation and ASO for aggregation and reporting. However, the interface remain same "Workspace" and all metadata is continue to be managed using Dimension library and application library.

Hyperion Profitability and Cost Management Architecture As given in below diagram, HPCM uses two kinds ofwww.bispsolutions.com " id="pdf-obj-2-8" src="pdf-obj-2-8.jpg">
Hyperion Profitability and Cost Management Architecture As given in below diagram, HPCM uses two kinds ofwww.bispsolutions.com " id="pdf-obj-2-10" src="pdf-obj-2-10.jpg">
Hyperion Profitability and Cost Management Architecture As given in below diagram, HPCM uses two kinds ofwww.bispsolutions.com " id="pdf-obj-2-12" src="pdf-obj-2-12.jpg">

Hyperion Profitability and Cost Management

Architecture

The below architecture shows workspace is used as common user interface. EPMA to main model using Dimension Library and Application Library. HPCM takes input from EPMA/DRM and workspace. All calculation take places in BSO cube and data transfer to ASO cube where reporting take place.

Steps to Build HPCM Application

Define the dimensions and members using EPMA to build the database outline.

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2 Build a customized model in HPCM that represents the network of allocations required for your
2
Build a customized model in
HPCM that represents the
network of allocations required
for your products or services.
3
Assigned drivers specify how data
is calculated, using standard or
customized formulas.
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About Models and Scenarios

A model is a representation of part or all of an organization, and contains costs and revenue categories that are similar to the organization's chart of accounts.

About Models and Scenarios A model is a representation of part or all of an organization,www.bispsolutions.com " id="pdf-obj-5-6" src="pdf-obj-5-6.jpg">

A model is comprised of the following elements:

Stages Which organize the steps in the allocation process within your organization. 1 Business dimensions Which
Stages
Which organize the steps in
the allocation process within
your organization.
1
Business dimensions
Which describe the objects
within each stage in the model,
such as products, customers,
2
regions.
Measure dimension
Which contains the measures for
cost, revenue, driver selections,
and driver data
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3
A model is comprised of the following elements: Point of View (POV) dimensions Point of View
A model is comprised of the following elements:
Point of View (POV) dimensions
Point of View (POV) dimensions,
which contain time periods and
scenarios.
4
Drivers
Which determine how cost or
revenue source values are
calculated and allocated.
5
Assignments
which map source data to
destinations, directly or by using
6
defined assignment Rules.
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Allocation Example

 

Stages

Product,Shipping

 

Business Dimension

New York

Measure dimension

Initial Setup, Machine Maintenance

Point of View (POV) dimensions:

Actual, 2015-Qtr1

Drivers

Number of Setups, Machine Hours

 

S.No

Activities

Cost

Cost Driver

 

1

Initial Setup

107,000

Number of Setups

2

Machine Maintenance

50,000

Machine Hours

 

Total Indirect Manufacturing Costs

157,000

 
 

Product A

Product B

Total

1

Direct Labor Hours

7000

3000

10,000

2

Number of Setups

30

70

100

3

Number of machine Hours

1200

3800

5000

Company Plan to Produce 350 Units of Product A and 225 Units of Product B

We need to compute the indirect manufacturing cost per unit for each product

Setups

107,000/100 Setups

1070/Setup

Maintenance

50000/5000

10/Machine Hours

 

Product A

 

Product B

Setup

1070X30=32,100

1070X70=74900

Maintenance

10X1200=12,000

10X3800=38000

Total

44,000

112900

Product A Per Unit Cost 44,000/350 =>125/Units

 

Product B Per Unit Cost 112,900/225 =>501/Units

Steps to Create Models

Define your requirements, the allocation methods, and the number and type of stages required

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Steps to Create Models Define your requirements, the allocation methods, and the number and type ofwww.bispsolutions.com " id="pdf-obj-9-9" src="pdf-obj-9-9.jpg">
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Define business dimensions using

Performance Management Architect to

build the database outline

Steps to Create Models Define your requirements, the allocation methods, and the number and type ofwww.bispsolutions.com " id="pdf-obj-9-20" src="pdf-obj-9-20.jpg">
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Create model stages to define the calculation order from the beginning of the process to the delivery of the final product or service.

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Create drivers to specify how to calculate cost and revenue data. One dimension must be selected as the driver for each stage.

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Assign drivers to selected dimensions and members. You can assign a driver to the entire dimension.

Steps to Create Models

Create assignments for stage intersections using assignment rules or explicit assignments to select dimensions.

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Steps to Create Models Create assignments for stage intersections using assignment rules or explicit assignments towww.bispsolutions.com " id="pdf-obj-10-9" src="pdf-obj-10-9.jpg">

Validate model structure for each stage to

ensure the model structure conforms to

validation rules, such as completed assignments and no unused drivers

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Steps to Create Models Create assignments for stage intersections using assignment rules or explicit assignments towww.bispsolutions.com " id="pdf-obj-10-20" src="pdf-obj-10-20.jpg">

Create the Essbase database, and populate the database with cost, revenue and driver data, through Profitability and Cost Management.

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Load data into the model, either through Profitability and Cost Management or directly into the Essbase database.

Calculate the Calculation Database to obtain the results of direct assignments for source and destination intersections

Steps to Create Models

Run the calculation scripts required to calculate each stage. Monitor the progress of long running jobs,.

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Steps to Create Models Run the calculation scripts required to calculate each stage. Monitor the progresswww.bispsolutions.com " id="pdf-obj-11-9" src="pdf-obj-11-9.jpg">

Transfer data from the Calculation database

which uses Block Storage Option (BSO) to the

Reporting database(ASO).

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Calculate the genealogy data. Genealogy calculations use the reporting database to obtain data for calculation as it is faster than using the calculation database.

Run the Stage Balancing, Driver Data and Trace Allocation reports. Make any edits or corrections to the model or data, and then rerun the

calculations, as required.

Report on the calculated results, using Oracle Hyperion Financial Reporting, Oracle Hyperion Smart View .

Stage wise Model

In Profitability and Cost Management, you create model stages to reflect each major process or activity in your business. You assign dimensions to each stage to define the intersections where data for the stage is stored. Stages exist only in Profitability and Cost Management and are not recognized in Performance Management Architect or in Essbase.

Any Question?