Oracle EPM: Oracle EPM Planning Cloud (EPBCS) - Design Considerations

Namaste!

Let's continue with the discussion on "Oracle EPM Planning Cloud (EPBCS) - Design Considerations" that we have started a week back.

Before we jump into the topic, I would like to show you a quick poll on "Oracle EPM Planning Cloud (EPBCS) out of box modules usability", I have conducted on LinkedIn.

The sample size is small, so it may not reflect the larger population opinion. But it certainly give a glance of what folks are thinking about the Product from their experience stand point.

If you are wondering., this poll has been conducted in "Hyperion" centric group, so I would think., this reflects credible view of the ground reality.

Overall, close to 60% of respondents prefer to use all out of box modules., at least Financials, Workforce and Capex. That's a good sign.

However, 30% of them chose not to use the out of box functionality at all. They certainly have their fair share of agony not to go with the out of box., I could totally understand that., been there, done that!!

Only 13% of them chose only Workforce and Capex., but not Financials. Sure, you might be wondering why that option was there in the first place to be able to select. Biased., may be yes! Will reveal the surprise at the end!!

Now I am going to analyze the above responses with my experience and background on this tool suite.

Again., it would be just my thought process., for sure., you might have different story to tell and I respect that and keen to learn if you are willing to share.

I will start with "No out of box modules" which won 30% votes., I was under the same impression about "Out of box modules", 4 years back when I did my first EPBCS Implementation., mainly due to:

Lack of documentation
Unexplained Bugs
Client specific customization requirements
Overall Integration Issues among all the out of box modules

Then, in later years, EPBCS gotten better by addressing many of the above challenges, but one thing remained open and that is:

Client specific customization requirements

I am sure., above challenge would be there forever., In fact that kept most of us in Jobs. LOL!! 😊

Anyway., I would be happy to assist and advise on projects where one would think., it would be impossible to replace current Hyperion Planning Application with EPBCS out of box functionality.

It may not accommodate 100% of flexibility that you would get with on-premise Application., but you could consider other design alternatives!!

Design Consideration 1: Easy to use EPM Planning Cloud (EPBCS) out-of-box module "FINANCIALS"

It all depends on how complex the business model., For example., Hospitality or Hotel Industry uses fairly simple revenue and expense planning processes.,

Below are sample list of Revenue lines of the Hotel Industry:

Rooms
Food
Beverage
Telephone
Parking
Retail Store
Food Court
Recreation

and here is the sample list of cost center budgets:

IT
Sales & Marketing
Property Operations and Maintenance
Utilities
Tax
Managements Fees
Laundry
Cafeteria
Payroll

Here are few formulas how it would derive the revenue:

Total Rooms Revenue = Number of rooms * Average daily rate (ADR)

Total Rooms Cost = Number of rooms * Cost per occupied room (COPR)

Food-Breakfast-Capture Ratio = Number of Food covers / Available Guests

Food-Breakfast-Average Check = Total Food Sales / Total Guests

The above calculations could very well achieved by driver and trend based based formulas of FINANCIALS out of box functionality. It is just matter of adding more driver members and write your own formula.

Still, you may be wondering., why I may have to use the out of box module? Anyhow I was supposed to create my own drivers and write custom formulas.. What is the fun of using the out of box "FINANCIALS" module., I am with you. Please hang in there with me till end.,

As I said this is just brain-storming session., so my perspective would be influenced by my experiences!!

So, above functionality is fairly easy to achieve with out of box FINANCIALS module for the above type of Industries.,

Design Consideration 2: Difficult to use EPM Planning Cloud (EPBCS) out-of-box module "FINANCIALS"

Now, let's talk about where we have hard time when we enable the out of box "FINANCIALS" module.,

For example., planning models of Insurance and Banking Industries are complex in nature and they have many moving parts.

Let's take Insurance industry., it may have many lines of businesses., some of them are.,

Financial Lines Insurance
Group Medical Insurance
Group Life Insurance
Corporate Liability Insurance
Property Insurance
Corporate Travel Insurance

For example., to calculate the Gross premium written (GPW) and Acquisition Cost., below components need to be calculated and fed into the forms:

Renewal%
Renewal Business GPW
New Business GPW
Renewal Acquisition Cost %
Renewal Business Acquisition Cost
New Business Acquisition Cost %
New Business Acquisition Cost

For example "Renewal%" driver which is crucial to calculate many KPI's, sometimes available at lowest levels. such as "branch" and if it is not available ., these drivers would have to automatically to be taken from "region" level etc. If nothing available., system should be able to get the value from "corporate" level.

In nutshell., you would end up writing your own custom business rule and achieve the functionality.

This can't be achieved simply by modifying or creating a custom formulae since it has many conditions (Technically it would be possible but not efficient)

Similarly.,

Calculating the UPR, DAC and Unearned Commissions by using regulatory percentages for different line of businesses is another scenario., where you end up writing your own business rules since it has complex logic.

**Unearned Premium reserve (UPR)

**Deferred acquisition costs (DAC)

Same thing with the Allocation of Shared Services Cost across different entities and departments with crazy customization requirements demands from clients would absolutely blow your mind away., if you want to squeeze-in everything in out-of-box FINANCIAL's module.

(Again, technically it would be possible but be cautious about what features you enable., since you may end up with all unnecessary built-in metadata, forms, rules etc., which you wouldn't be using)

In this case., I would be glad, not to enable the FINANCIAL's module., instead., create custom cube within EPBCS application and design the functionality.

So, In this case., What I am going to loose by not enabling the out-of-box module., but create a custom cube?

The major disadvantage are:

No out-of-box Maps for data push functionality from other modules (Workforce, Capital and Projects)
No out-of-box balance sheet and cash flow functionality
No out-of-box dashboards with built in forms, Graphs and KPI's

The work around for the built-in data push functionality is., we could define our own maps between Workforce, Capital and Projects to custom cube., and write the data push business rules in each of those modules using XREF and XWRITE functionality.

Alright, that's it for today!

We will continue discussing other ideas in future blogs..

Happy Learning!

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