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8/9/2019 Hyperion Profitibility and Cost Allocation Introduction
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Introduction
toHyperion Profitability and Cost Management
Presented By :Amit Sharma
8/9/2019 Hyperion Profitibility and Cost Allocation Introduction
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Oracle Hyperion Profitability and Cost Management, Fusion Edition is ananalytic application that manages the cost and revenue allocations that arenecessary to compute profitability for a business segment, such as a product,customer, region, or branch.
About Profitability and Cost Management
1. It allows profitability or cost measurement of business segments.
2. It is designed to cost decomposition, consumption-based costing andscenario-playing to measure profitability.
3. It play an important role in cost analysis and cost bench marking.
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Hyperion Profitability and Cost Management
Architecture
As given in below diagram, HPCM uses two kinds of cubes, Oracle Essbase BSOfor calculation and ASO for aggregation and reporting. However, the interfaceremain same "Workspace" and all metadata is continue to be managed usingD
imension library and application library.
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The below architecture shows workspace is used as common user interface. EPMAto main model using Dimension Library and Application Library. HPCM takes inputfrom EPMA/DRM and workspace. All calculation take places in BSO cube and datatransfer to ASO cube where reporting take place.
Hyperion Profitability and Cost Management
Architecture
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Steps to Build HPCM Application
Define the dimensions andmembers using EPMA to buildthe database outline.
Build a customized model in
HPCM that represents thenetwork of allocations requiredfor your products or services.
Assigned drivers specify how datais calculated, using standard orcustomized formulas.
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About Models and ScenariosA model is a representation of part or all of an organization, and contains costs andrevenue categories that are similar to the organization's chart of accounts.
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A model is comprised of the following elements:
Which organize the steps inthe allocation process withinyour organization.
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Stages
Which describe the objectswithin each stage in the model,such as products, customers,regions.
Business dimensions
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Which contains the measures forcost, revenue, driver selections,and driver data
Measure dimension
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A model is comprised of the following elements:
Point of View (POV) dimensions,which contain time periods andscenarios.
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Point of View (POV) dimensions
Which determine how cost orrevenue source values arecalculated and allocated.
Drivers
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which map source data todestinations, directly or by usingdefined assignment Rules.
Assignments
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Allocation Example
Stages Product,Shipping
Business Dimension New York
Measure dimension Initial Setup, Machine MaintenancePoint 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/SetupMaintenance 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
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Define your requirements, the allocationmethods, and the number and type of
stages required
Define business dimensions usingPerformance Management Architect tobuild the database outline
Create model stages to define thecalculation order from the beginning ofthe process to the delivery of the finalproduct or service.
Create drivers to specify how to calculate
cost and revenue data. One dimension mustbe selected as the driver for each stage.
Assign drivers to selected dimensionsand members. You can assign a driverto the entire dimension.
Steps to Create Models
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Create assignments for stageintersections using assignment rules or
explicit assignments to select dimensions.
Validate model structure for each stage toensure the model structure conforms tovalidation rules, such as completedassignments and no unused drivers
Create the Essbase database, andpopulate the database with cost, revenueand driver data, through Profitability andCost Management.
Load data into the model, either through
Profitability and Cost Management ordirectly into the Essbase database.
Calculate the Calculation Database toobtain the results of direct assignmentsfor source and destination intersections
Steps to Create Models
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Run the calculation scripts required tocalculate each stage. Monitor the
progress of long running jobs,.
Transfer data from the Calculation databasewhich uses Block Storage Option (BSO) to theReporting database(ASO).
Calculate the genealogy data. Genealogycalculations use the reporting database toobtain data for calculation as it is fasterthan using the calculation database.
Run the Stage Balancing, Driver Data and Trace
Allocation reports. Make any edits or correctionsto the model or data, and then rerun thecalculations, as required.
Report on the calculated results, usingOracle Hyperion FinancialReporting, Oracle Hyperion Smart View .
Steps to Create Models
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Stage wise Model
In Profitability and Cost Management, you create model stages to reflect each majorprocess 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 Profitabilityand Cost Management and are not recognized in Performance ManagementArchitect or in Essbase.
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