Oracle Hyperion Profitability and Cost Management (HPCM) has accurately been depicted as a hidden gem within the Oracle EPM (Hyperion) suite. The product has been a part of the suite for a number of years, but has not gotten a lot of attention until recently.
Part of the reason for this lack of traction is that the business community was not fully prepared to take advantage of the powerful analytical capabilities contained within HPCM. As finance departments and entire organizations have grown in their abilities to harvest and manage data, a great opportunity has emerged for boosting the bottom line by focusing on deeper and more detailed contribution and profitability analyses, all made much more simple, transparent, and traceable through the use of HPCM.
In addition, Oracle has also made some solid improvements to the product in recent releases, which we’ll look at more closely below:
Detailed Profitability Capabilities Introduction
HPCM originally allowed only for “Standard Profitability” modeling, which focused on contribution analysis and allocating direct and indirect costs or revenue to a destination through a hierarchical set of stages using drivers and direct assignments. Standard Profitability uses an architecture that includes two Essbase databases (BSO for calculations, ASO for reporting) and a relational database that stores artifacts and definitions of the model, including driver calculations, assignment definitions, etc. While the Standard Profitability architecture allows for handling large volumes of data, there are still practical considerations that can create limitations on dimension sizes because of the multidimensional architecture.
“Detailed Profitability” offers a whole new set of capabilities that can act as a compliment to Standard Profitability based on the needs of the organization. Detailed Profitability can be used for many analytical purposes, such as applying customer support and product activity costs to a large number of invoice lines. The architecture is completely different and only uses relational database technology. This provides great flexibility because tables can be mapped from a user-defined relational schema to corresponding tables in HPCM. Detailed Profitability also only processes flows and allocations for a single source-destination combination. The relational, non-hierarchical nature of the architecture allows for processing enormous volumes of data (hundreds of millions of rows, possibly) because the destination row is not defined by a unique intersection of dimensions.
After the initial introduction of Detailed Profitability, several key enhancements have helped to make the product even stronger. Detailed Profitability now handles allocations through Calculation Rules, a large set of calculation artifacts aimed at making allocation assignments much less tedious through using a top-down approach. Calculation Rules control flows and allocations through a broad application of rules, and exceptions to these rules are managed by way of individual assignments.
Another key feature enhancement is providing for the ability to transfer relational data to an OLAP model. There is new support for deploying three separate Essbase databases that correspond to source stage, contribution, and destination stage data. With this enhancement, users now have the ability to perform multidimensional analysis through the various reporting tools, including Oracle Hyperion Financial Reporting, Oracle Hyperion Web Analysis, Oracle Smart View for Office, or Oracle Business Intelligence Enterprise Edition (OBIEE).
Smart View integrations and Query Customization Capabilities
HPCM used to allow for a default set of views/queries out-of-the-box, where users could view or input data within the application. Newer releases allow for modifying views or creating new ones based on user needs or preferences in retrieving or viewing data.
Oracle recently added new integrations with Smart View. The product comes with a default set of queries, which can be modified, expanded and defined within the application, then run in Smart View. These queries can be saved for future use among all users and are available for migration in Lifecycle Management.
In addition, Standard Profitability expands integration capabilities by providing aggregated totals in the Stage Balancing tab of the application with hyperlinks to Smart View, where a user can drill down on data, and pivot or maneuver data for deeper analysis.
Model Statistics Query Capabilities
In recent releases, Oracle has included a pre-built SQL query as part of the installation called “modelstats.sql.” This can be very beneficial for providing insight into the number and usage of certain statistics. The query is database-neutral and can be executed on a SQL Server or Oracle database backend.
This query can be beneficial for understanding the implications of making a big change. A baseline query can be run then compared after a change is made. For example, an assignment rule could be changed that is used thousands of times. In this case, the query can provide some insight as to the impact of making such a change.
Greater Automation Capabilities via Oracle Web Services Manager (OWSM)
Many data management tasks are handled through automated processes. New support was provided for automation of many common HPCM functions through Oracle Web Services Manager (OWSM). Through a Java API, developers can create custom scripts to automate tasks that a user might perform in HPCM. This enhancement is very significant for organizations looking to layer HPCM on to an existing EPM (Hyperion) environment, most of which is probably already automated (to some extent).
These new features and enhancements are just a few of the many improvements that Oracle has made to HPCM in recent releases, seeming to indicate a new or renewed focus on this very powerful product that – until now – really hasn’t received the attention it deserves. This, combined with growing business focus on producing more detailed and granular analysis of profitability and contribution, makes HPCM poised to be a break-out star in the EPM space going forward.
Author: Shane Hetzel, Performance Architects