Pervasive EPM in Oracle products can help planners in volatile times.
by Aaron Lazenby, November 2011
When Gaurav Rewari joined Oracle in 2008, the company was just beginning to integrate the enterprise performance management (EPM) products and expertise acquired through the purchase of Hyperion Solutions. As vice president of EPM product strategy, Rewari witnessed the transition firsthand. “It was very interesting, deciding how to continue to invest in and maintain the truly unique Hyperion products, while at the same time picking up the core infrastructure and middleware benefits gained from being part of Oracle,” says Rewari. Ultimately, the goal was to balance the functional innovation of the EPM applications with making them more scalable and enterprise-ready by leveraging Oracle’s technology stack and through integration with Oracle Applications. Profit spoke to Rewari, now vice president, product strategy and management for business intelligence (BI) and EPM, about the future of Oracle’s EPM product lines and their importance in today’s economy.
Profit: How have Hyperion products benefited from Oracle’s acquisition?
Rewari: I think it has translated into real benefits for customers. They will now find a product line that has seen significant investments in enterprise readiness. The critical factors a customer must rely on from an EPM platform—in terms of scalability, system management, installation, setup, security, lifecycle management—all of these functions rely on core middleware and technology assets that Oracle has.
In the past, Hyperion developers had to build and maintain all of this technology on their own. But since they are now part of Oracle, we can divert our energy and investments into functional innovations. That’s been proven, since we’ve been able to maintain a rapid pace of Oracle Hyperion product releases. We’ve introduced a whole new range of solutions to the marketplace, running the gamut from industry-specific solutions like public sector planning and budgeting to horizontal solutions such as disclosure management and financial close management.
That’s a whole new set of functional innovations, largely made possible because we’ve been able to free up a bunch of our engineering and R&D resources. Oracle is so very strong at infrastructure, and we have been able to leverage that.
Profit: How does the process of integrating Hyperion with other complementary Oracle products work?
Rewari: The process here at Oracle for integrating a given suite of products with other relevant Oracle products is tried and tested. It really comes down to picking the winners among the many products we have in our stack and then investing in them heavily to make sure customers get a consistent experience. We have very regular planning cycles, and we continue to drive that integration deeper.
This could mean integration between, for instance, EPM and Oracle’s ERP [enterprise resource planning] applications, or EPM and BI. So for example, we worked on the integration with Oracle Business Intelligence Enterprise Edition, and now users can access all Oracle Hyperion EPM assets through the same BI interface they use for data warehouse or line-of-business data mart, or even the packaged BI applications we have on top of our ERP and CRM [customer relationship management] systems.
This really allows users to gain additional functionality at a much lower cost, because the total cost of ownership of a combination of these products is much less than if you were to buy them piecemeal or from a range of different vendors.
Profit: What role do the EPM and BI products play in Oracle Fusion Applications?
Rewari: For each key Oracle Fusion Applications module, we have a corresponding BI application that we’ve developed as well as a set of transactional BI capabilities that users can report directly against Oracle Fusion Applications’ transactional data. This kind of reporting is made available as separate dashboards, but also integrated as part and parcel of the Oracle Fusion Applications ERP or CRM experience.
Similarly, Oracle Fusion Applications embed and leverage key EPM technologies. Oracle Essbase is core to the Oracle Fusion Financials solution and many other applications. Oracle Hyperion Financial Reporting is part of Oracle Fusion Applications, along with functionality from Oracle Hyperion Smart View for Office and the Calculation Manager feature of Oracle’s Hyperion Foundation Services. These are all foundational EPM technologies that have been built into Oracle Fusion Applications. Furthermore, our EPM applications complement Oracle Fusion Financials to deliver a really comprehensive suite of solutions for the office of finance.
Also, the ability for Oracle EPM to coexist with existing Oracle applications—PeopleSoft, Oracle E-Business Suite, Siebel, JD Edwards—allows customers to deploy EPM applications and continue to leverage their EPM skills as they move into the world of Oracle Fusion Applications.
Profit: What role do you think the EPM products, and in particular Oracle Hyperion products, play in helping managers deal with a volatile economy?
Rewari: Oracle Hyperion products in particular have a very key role to play in the face of such uncertainty and volatility, because of their ability to allow finance professionals, planners, and line-of-business executives to reduce risk and limit their exposure. On the flip side, they also enable them to seize opportunities these uncertain times might present. And so in both ways, I think the Oracle Hyperion EPM product line allows for this.
If you look for instance on the planning side, there is much to be gained by having the ability to plan, replan, and forecast very quickly. Plans from a month ago might be rendered completely obsolete based on current events. Tools like Oracle Hyperion Strategic Finance allow users to model the impacts of major events and scenarios. We have as part of our EPM product line a product called Oracle Crystal Ball, which allows you to run Monte Carlo simulations. So you subject your plans to several scenario runs, and then you come up with something in which you have a much higher level of confidence. And furthermore, we have tools like Oracle Essbase—the underpinnings of the Oracle Hyperion Planning solution—which allow you to very rapidly do “what if?” analysis and scenario modeling.
At the same time, whatever plans you do develop, you want to have a higher level of confidence in them. You want to do that using a range of sophisticated planning techniques that allow for things like driver-based planning, risk-adjusted planning, and event-driven replanning—ways to model macroeconomic volatility. So we enable all these through our core planning product line.
Profit: What about capturing opportunities, even in the face of economic uncertainty?
Rewari: I briefly alluded to the fact that managers may see opportunities to pursue paths that might be very beneficial for a company—so for instance, we have a product called Oracle Hyperion Profitability and Cost Management. It allows managers to systematically identify profitable products among a large set of products, to focus on profitable customer segments, and to even dive into individual customer details. And so if you need to run a loyalty promotion for a certain class of customers or pursue a new market demographic, you can identify those segments with Oracle EPM.
Profit: How has the EPM market changed, given the competitive landscape and what the demands are from customers and businesses for this kind of analytical ability?
Rewari: I already mentioned one: the increasing unification of BI and EPM. In many cases, the technologies used for finance-oriented analytics can and should be the same as those used for line-of-business analytics.
We’ve also seen planning and budgeting regarded as part of a larger enterprise proposition. Increasingly, it’s not just about developing your annual plan and budget, but developing operational plans for different departments in your company. These operational plans have to integrate, where it makes sense, into your core financial plan. This is something we’ve seen our customers embarking on, using the Oracle Hyperion Planning product at the core and some of our other planning assets alongside.
There’s been a broadening of the consolidation area beyond just financial consolidation to include, for instance, reporting for external statutory purposes—for which we developed a product for disclosure management.
There’s been increasing demand for the orchestration of the end-to-end financial close process, which needs a high level of process control, auditing, and governance support built in. We’ve seen an expansion of the role finance plays in providing periodic reports to lines of business that combine numbers with analysis and commentary—something we in the trade call management reporting.
So we think the EPM area has really blossomed to include all these new components.
Profit: Given these trends, where do the Oracle Hyperion EPM products go from here?
Rewari: Pervasive EPM is where we’re heading, by supporting mobility in our solutions, by making products increasingly easy to use, and through integration of Oracle BI with Oracle EPM solutions. We’re working to develop combined solutions where the value of the data and the insights in the EPM applications are made available to a much larger community through integration with our BI product line.
So for instance, you might have 10 analysts or cost accountants constructing very advanced cost and profitability models. But in principle, hundreds and thousands of business users can benefit from that data, if it is made available in their reports and dashboards. That kind of deep integration really changes the game.
We’re always looking for ways to lower total cost of ownership for our customers through integration, through accelerated implementation, and through cloud-based deployment where it makes sense. These are some key focus areas for our future R&D investments.