Strategize. Plan. Execute.
By Marta Bright
Oracle’s enterprise performance management solution provides analytics for success.
Managing county business is a complex process. The many rules—from various sources—that are involved in accounting for resources and expenditures make public sector accounting complex. Planning, budgeting, and providing management reporting for the provision of county services can be just as challenging.
“The governing bodies—such as the Governmental Accounting Standards Board (GASB) and local budget law—require us to account and budget for government expenditures by separate funds,” says Jeff White, chief financial officer of Marion County, Oregon. His office oversees the accounting and budgeting processes for 38 separate funds for the county. “It’s almost like having your own set of books for each different fund—but the rules of defining each type of fund can be different.”
For example, governments always have a general fund, which monies such as property taxes typically flow into and then out again to pay for services such as public safety and portions of public health and offices such as county clerks, the county treasurer, and the tax and assessment functions of the county. “If you happen to be a government that is running a business-type service such as water and sewer services, those are classified more like businesses, which are enterprise funds, and they have to be accounted for in a certain way,” says White.
The complexity of planning, budgeting, and management reporting for so many types of services that are provided to the public, and the use of various funds to account for all those services, has stressed Marion County’s internally developed budget module capabilities. “Our current budgeting system really isn’t adequate for all of those varying needs,” White says. “The ability to forecast expenditures into future budget periods, keep our budget module updated due to various supplemental budgets adopted throughout the year, and produce more-useful reporting information from our module are all areas that we know could be improved.”
White expects that moving to Oracle’s enterprise performance management (EPM) system release 11.1.2 would provide solutions to many of his current system needs. He participated in a customer validation workshop for Oracle Hyperion Public Sector Planning and Budgeting, one of three new performance management applications—the other two are Oracle Hyperion Disclosure Management and Oracle Hyperion Financial Close Management—that are part of the release.
These applications accelerate data collection and aggregation, providing an environment for streamlining the planning, forecasting, and reporting processes. Together with Oracle Essbase, the online analytical processing (OLAP) server that supports data extraction from Oracle Database 11g and other relational databases, they are part of Oracle’s expanding range of enterprise performance management solutions.
Bala Subramanian, director of EPM product management at Oracle, says that the new Oracle Hyperion Public Sector Planning and Budgeting product helps agencies and departments plan more flexibly and improve user productivity, thus enhancing the overall planning and budgeting process.
“Oracle Hyperion Public Sector Planning and Budgeting helps organizations represent their complex planning rules accurately within the budgeting system,” Subramanian says. “One example of this is the allocation rules that govern how funds are allocated across several programs and positions within an agency or department. It also helps them meet reporting and budget publication requirements as mandated by law. For example, where previously an agency might have taken several months to put together a budget, with software like Oracle Hyperion Public Sector Planning and Budgeting, that time requirement could be reduced anywhere from 20 to 50 percent.”
Marion County’s White says that Oracle Hyperion Public Sector Planning and Budgeting would help him and his office provide better information and improve the efficiency of the budget process. “Starting from where I am now to where the new Hyperion release is would take us leaps and bounds ahead,” he says. “It is a great product.”
Like government agencies, companies providing insurance and financial services have their own set of complex rules and regulations. “Just for the insurance industry, there are statutory requirements versus U.S. GAAP [Generally Accepted Accounting Principles],” says Lynn Murphy, senior director, systems analysis at CNO Financial Group (formerly Conseco Services). “So we maintain two closing processes—one close process for GAAP with certain deadlines, and our statutory closings, which are a little bit different.”
Murphy and Susan Billman, senior director, finance close process at CNO, also participated in the customer validation workshop for Oracle’s enterprise performance management system release 11.1.2, testing the Oracle Hyperion Financial Close Management and Oracle Hyperion Disclosure Management modules. “It gave us an opportunity to test-drive the product, so we knew exactly what features we were getting,” Murphy says. “The close management feature we saw while testing Hyperion will allow us to track those two reporting bases—the GAAP and our statutory closings—more easily.”
The new release will leverage CNO’s existing EPM investment and strengthen its overall integration. “We like Oracle’s direction on the integration of the various tools and components,” says Murphy. “That helps us from a strategic standpoint. In addition, our integration costs will be lower by leveraging the tools that Oracle is offering. That saves time from an IT standpoint, but it also saves time for our finance organization, because otherwise we would have to put data in two places for them to look at.”
Murphy also appreciates that the Oracle Hyperion modules will work well in the company’s entire IT stack. “They will integrate with other products, so we can track tasks that are business process tasks, not just financial management tasks,” she says.
Integration is also important for Billman—as well as the short learning curve she anticipates with the Oracle Hyperion modules. “I like that the Oracle products talk to Microsoft Outlook, which is what we use here at CNO,” she says. “And I think the Hyperion modules will be easy for people to pick up.”
Billman says that strong integration means simplicity of use for CNO users. “Employees won’t have to log on to another product to see what their tasks are for the day,” she says. “That’s important, because people are accustomed to looking at Microsoft Outlook for their daily tasks. The integration with Oracle Hyperion modules mitigates the risk of people forgetting to sign into another product, or learning another login.”
Planning Now Saves Time Later
These organizations, and others like them, are saving time and money—and gaining more flexibility, leveraging their investments, and better managing risk—by planning and forecasting more accurately. And as regulatory demands increase, doing so is more important than ever.
“The standards of what we measure and how we measure it have been evolving and getting more detailed and are more demanding,” says Robert Kugel, senior vice president and research director at Ventana Research, a benchmark research and advisory services firm that helps organizations manage and optimize performance. “Having a system to put together plans and budgets increases accuracy, because the processes are supported by analysis rather than people taking their best guesses on what the numbers should be,” he says.
CNO’s Murphy doesn’t expect to rely on guesswork. “We’re looking at this tool [Oracle Hyperion Financial Close Management] to define the close process, understand all the components that go into it, and then try to shorten the close process over time,” she says.
Marta Bright ( firstname.lastname@example.org ) is a senior editor with Oracle Publishing.