ClearLine MOUS Improving Forecasts With Allocations

Improving Forecasts With Allocations In Hyperion Planning / Essbase
Michigan Oracle Users Summit 2012 November 14, 2012
Presentation Outline
Introductions
Steve Light & the ClearLine Group
Allocations
Where allocations fit into forecasting Overview of Hyperion allocation options Allocations in a real rolling forecast
Q&A
2011 ClearLine Group, L.L.C.
INTRODUCTIONS
Steve Light
Director in ClearLines Hyperion Practice 17 years experience with Hyperion Products
Started on Essbase 3 and certified on 4, 5, 6, 7, 9.0, 9.3, & 11 Beta tester for ASO on 7.1 and worked with 7x & 9x Hyperion Planning 2, 4, 9.3, and 11 (Classic & EPMA) Analyzer / Web Analysis, Financial Reports
Worked on 59 different projects at 43 companies Industries

Aviation, Banking, Consumer Products, Financial, Health Care, Insurance, Manufacturing, Retail, Pharmaceutics, Publishing, Telecom, and Transportation
2011 ClearLine Group, L.L.C. 4
Overview of ClearLine Group

Boutique consulting firm of highly experienced Hyperion EPM experts
Core team has a deep history of success working together for over 12 years. Pioneers consulting in the Hyperion technologies
Backgrounds blend industry and consulting experience
Breadth of skills from expert level advisory, executive visioning and project management to hands-on architecture and implementation All full-time employees, focused on the long-term success of the firm ClearLine provides a consistent source of high caliber experts who leverage the collective experience of our group to deliver superior results
Provide customers with end-to-end services

Services range from initial visioning / roadmap process to project oversight and advisory to full implementation and production support services.
WHERE ALLOCATIONS FIT INTO FORECASTING
What is an allocation?
It is a system of dividing expenses and incomes among the various branches and departments of a business.
Business Samples
Allocating costs across
Often used for driver based cost components in rolling forecasts Manufacturing costs (e.g. electricity) could be allocated to lines based on equipment type and volume
Business Samples
Allocating high level forecasts down
High level values being pushed down to detailed plans
Top Down Middle Out
Most of this presentation is focused on this type of allocation

Allocations & Forecasting

Level 4 Level 3 Level 2 Level 1 Level 0 Bottom Up forecasting starts at the 0 level and aggregates up.
Simple system with no allocations Large amount of data entry Not as accurate as people think
User may allocate off line with reduced accuracy Users might enter lump sums can cause calculation and reporting issues. Higher volume of data entry will lead to more user input errors

Level 4 Level 3 Level 2 Level 1 Level 0 Top Down forecasting starts with a single top level number and allocates down to the 0 level A fast and simple process with allocations Very little data entry Good for an assigned goal Detailed levels may be less accurate than desired when poorly designed

Level 4 Level 3 Level 2 Level 1 Level 0 Middle Out forecasting can start at any level in between Flexible real world forecasting with allocations Usually more accurate Often less work for the users than Bottom Up forecasting
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Level 3 Level 2 Level 1 Level 0 Waterfall allocation starting at the level picked by the end user In this example the user decided to start at level 3 Fills in the levels below Adjustments can be made at the current level or lower levels
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Level 0 Complete all 0 level calculation (if any) after the allocation is complete NOTE: some applications may not need any 0 level calculations
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Level 4 Level 3 Level 2 Level 1 Level 0 Aggregate the cube to roll up all of the data for the total. Calc All, Calc Dim, Agg The user can repeat the process at any level with adjustments as many times as necessary
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OVERVIEW OF HYPERION ALLOCATIONS OPTIONS
Numerous Allocation Options

Oracle has provided a lot of different ways to allocate data within the Hyperion products There are also third party options You need to pick the right tool for the job
What is important to your project?
Upper level writes Audit trails Allocating down verses across Calculation complexity verses large data volumes In memory verses directly impacting data in the cube
Do you already own something that can do the job?

Built-in Options for Hyperion Planning

Adjusting & Spreading Data
Hyperion Planning web form feature Adjust either individual or multiple data cell values up or down by a percentage or by a specific amount Security lets users only adjust cells with write access Date and text values are automatically excluded Further flexibility by utilizing cell locking
Temporarily lock cells while Hyperion Planning calculates and spreads the results into the unlocked cells within the range
Users are given the opportunity to evaluation the new values before sending the data to the database

Time Spreading
Hyperion Planning web form feature Allows data to be entered at a high level instantly allocated
Spreading data based on a proportional allocation of existing values Spreading week level based on i.e. 454, 445, 544, or None
Adjusts for Time Balance Security lets users only adjust cells with write access Further flexibility by utilizing cell locking
Temporarily lock cells while Hyperion Planning calculates and spreads the results into the unlocked cells within the range
Users are given the opportunity to evaluation the new values before sending the data to the database

Grid Spread
Grid Spread must be enabled as a data form property Specify an amount or percentage to change values on the data form Selectable spreading patterns (Proportional, Even Split, & Fill) Can see results immediately on the data form Can save the new data or discard it. Ignores read-only, locked cells, and cells having supporting detail. Data integrity is safeguarded by spreading values only to cells that you have access to.

Mass Allocation
Need Mass Allocate role assigned Shared Services and the Mass Allocate data form property must be enabled Spreads data even to cells not displayed on the data form Allocates data to all the source cell's descendants Allocates across multiple dimensions Allocate from either a subtotal cell or total cell Uses dynamically-created calculation scripts Customized spreading patterns Does not require that you have access to the target cells Cannot be undone after you mass allocate values
Oracle Essbase ASO

Oracle Essbase ASO allocations
Added in Oracle Essbase Release 11.1.2 This is GREAT when it fits your needs
Scale up the size of the database Allows simple allocations to run with great speed Allocations any level in the databases dimension hierarchies Spread evenly or as a percent of total Runs within MaxL or in the API Results use ASOs temporary data load buffers
Keep in mind ASO database allocations are not quite as flexible as BSO allocations
Write back only at the level 0 Cannot use relative references to dimension members
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Hyperion Profitability & Cost Management (HPCM)

Provides actionable insights into costs and profitability Drives performance by discovering drivers of cost & profitability Visible maps and audit trails on business drivers to improve resource alignment with allocations Complete complex calculations and still scales Flexibility and visibility to accurately allocate values Allocation engine supports a wide range of methodologies Graphical traceability maps and data lineage User-defined business rules Robust ability to distribute indirect costs and project based allocations
Third Party Tools

PACE
Robust and easy to use 3rd party tool for Essbase BSO In-memory engine built to extend Essbases spreading and allocation functionality Rapid calculation with advanced what-if modeling Data is only written back to the database when the planner decides that it ready to send Pace includes additional features like:
n-Dimensional Locking-and- Spreading Built-in Business Logic Inverse Calculation Logic for multiple targets Multi-Dimensional Web- Enabled Spreadsheet
Calculation Script Definition

Oracle Essbase BSO Calculation Scripts and Hyperion Business Rules
Easier than a lot of people think Allocations let you to distribute values that are at the parent level across child members. Allocations are based on a number of criteria that can be expressed in the following functions. @ALLOCATE a single dimension @MDALLOCATE across multiple dimensions
@ALLOCATE
Oracle Essbase Technical Reference Syntax: @ALLOCATE (amount, allocationRange, basisMbr, [roundMbr],method [, methodParams] [, round [, numDigits][, roundErr]]) Required Parameters: Amount what you want to allocate AllocationRange where you want to allocate to Method how the allocation works BasisMbr provides the Method with a pattern
Optional Parameters: MethodParams addition options on how the Method will work
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@ALLOCATE
Oracle Essbase Technical Reference Syntax: @ALLOCATE (amount, allocationRange, basisMbr, [roundMbr],method [, methodParams] [, round [, numDigits][, roundErr]]) Optional Rounding Parameters: RoundMbr where rounding errors are added Round turns it on and specifies the member NumDigits specifies decimal places to round to RoundErr specifies how you deal with rounding errors
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@ALLOCATE Sample
Allocation the volume from products to its children, based on the current years Final Plan, skipping both zero and #missing values. Amount (what) current member of the products AllocationRange (where) the children of the of that products BasisMbr (pattern) based on the current years final plan Method (how) spread MethodParams skip both zeros and missing values
Plan = @ALLOCATE ((Product),@CHILDREN (Product), Plan->FY12->Final,, SPREAD, SKIPBOTH);
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@MDALLOCATE
Oracle Essbase Technical Reference Syntax: @MDALLOCATE (amount, Ndim, allocationRange1 ... allocationRangeN, basisMbr, [roundMbr], method [, methodParams] [, round [, numDigits] [,roundErr]]) Additional Required Parameters: Ndim the number of dimensions you want to allocate to AllocationRange(s) the dimensions you want to allocate to
30
ALLOCATIONS IN A REAL ROLLING FORECAST
Overview Of A Real System

Major consumer products company
Worlds 6th company in their industry Marketed in more than 100 countries Over $16 billion in net sales Over 30,000 employees Built in Essbase BSO Rolling forecasts for volume Multiple different divisions combined into a single corp view Upper level user adjustments 300 users
Forecasting application
Basic Features
4 years of weekly volume data for 30,000 SKUs Fully automated processing of historical data with built in error checking and email alerts On the fly conversions for Scaling & Currency 0 Level conversions pounds & other units of measure Rapid calculation.
Company wide allocations in minutes All other calculations in seconds!
5 versions for each of the 15 forecast scenarios

Advanced Features
Transparent Partitions
Improve performance Simplifies calculations and security
Waterfall allocations with starting levels controlled by individual end users Allows for multiple types of forecasting allocations
Bottom Up , Top Down, and Middle Out
End user controls forecasts source, level, and percent growth/decline via simple flags End user overrides at any forecast level Iterative what if process quickly restates all products for an entire companys forecast
Forecast Process
Set the run time prompts for the set up and variables with Business Rules and the HBR Launcher
Determine Source For the forecasts BasisMbr Product Level Top Down, Bottom Up, or Middle Out Percent Growth/Decline
NOTE: This can work using flag members and fix statements in calc scripts if you are not using Business Rules with run time prompts
Run the set up business rule

Clears old data in the forecast Rolls current actual data into history forecast periods Populates a starting point for the forecast based on variables
Business Rule & Run Time Prompts
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Forecast Process (cont)

Run the aggregation (Optional Step)
Rolls up data to the top of the cube Can be used for a high level forecast
Run the allocation

Allocates from level defined by the flag to lowest level Automatically switches allocation logic between Percent Of Total and Even Spreading based on data patterns Identifies discontinued SKUs, maintained for history, and ignores them during the allocation Completes stored conversion at the 0 level (if required) Aggregates all unit conversions to the top of the cube
Process Overview
Typical Monthly Forecast Flow
No
Begin Forecast Process
Run Set Up
Accept Starting Point

Yes
1st optional what if area
Run Aggregation
Accept Forecast Data

No
Yes
2nd optional Run what ifAllocation area
Accept Forecast Data

No
Yes
Copy to 3rd optional Appropriate what if area Version
Lock & Send Adjustments
Lock & Send Adjustments
End Forecast Process
38
Intelligent Logic Switching

Determine source, level, and % change for the October Estimate (e.g. 10% growth of Spring Plan at level 1) The allocation starting point is created Members without history can be manually entered and adjustments can be completed Allocation process starts
Identifies discontinued products at all level of the product hierarchy that are being maintained for history Percent of total based on source Even spread when there is no source The unit conversions are completed and the division forecast is aggregated
39 2011 ClearLine Group, L.L.C.
OK What Happened!?!
Hyperion Business Rule Overview
Used the basic @Allocate function Leverages a lot of features
Fixes and Ifs
Control levels Optimization
Substitution Variables and Run Time Prompts

Avoids Hardcoding and remove maintenance Collect user input to drive process
UDAs
Tags discontinued SKUs
OK What Happened!?!
Hyperion Business Rule Overview
Tuning the calculation
Minimized the passes through the cube Reduced the number of blocks called into the cache
Automation
Attached to Web Forms (if using Hyperion Planning) Simple relational database to generate and run MaxL scripts based on the system date for all of the variables Can run on the fly and scheduled
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Break It Down
Allocate the volume from the current member of products to its children based on the Spread member of the current years final spring plan with a spread that skips both zeros and missing values. Amount (what) current member of the products AllocationRange (where) the children of the of that products BasisMbr (pattern) based on the Spread member of the current years final plan Method (how) spread MethodParams skip both zeros and missing values &VarPlan = @ALLOCATE(@CURRMBR ("Product"),@CHILDREN (@CURRMBR ("Product")),"Spread"->"Spring Plan"->"Final"->&CY,, SPREAD, SKIPBOTH);
What does the calc look like?

FIX (&CYPlus1, &VarPlan,"Working",(@LEVMBRS ("Sales Channel", 0) FIX (@LEVMBRS ("Product", 4)) ("EQC" (IF (([Level Flag] == 4) AND ([Source Flag] == 3) AND (@ISMBR(&VarPlan) AND @ISMBR("Spring Plan")) IF (@MDSHIFT(@CURRMBR ("Product"), -4, "Measures" , 0, "Fiscal Year", , 0, "Scenario",)) <> #Missing) IF(NOT (@ISMBR("Jan") AND @ISMBR(&HBOPEN_MTH))) &VarPlan = @ALLOCATE(@CURRMBR ("Product"),@CHILDREN (@CURRMBR ("Product")), "Share"->"Spring Plan"->"Final"->&CYPlus1,,share); ELSE &VarPlan = @ALLOCATE(@CURRMBR ("Product"),@CHILDREN (@CURRMBR ("Product")), "Share"->"Spring Plan"->"Final"->&CY,,share); ENDIF ELSEIF (@MDSHIFT(@CURRMBR ("Product"),-4, "Measures", 0, "Fiscal Year", , 0, "Scenario",)) == #Missing) IF(NOT (@ISMBR("Jan") AND @ISMBR(&HBOPEN_MTH))) &VarPlan = @ALLOCATE(@CURRMBR ("Product"),@CHILDREN (@CURRMBR ("Product")), "Spread"->"Spring Plan"->"Final"->&CYPlus1,, spread, skipboth); ELSE &VarPlan = @ALLOCATE(@CURRMBR ("Product"),@CHILDREN (@CURRMBR ("Product")), "Spread"->"Spring Plan"->"Final"->&CY,, spread, skipboth); ENDIF ENDIF ENDIF)) ENDFIX ENDFIX
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And what does that mean?

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ClearLine Group, L.L.C. 250 Parkway Drive Suite 150 Lincolnshire, IL 60069
Online: slight@clearlinegroup.com www.clearlinegroup.com
Call: 855.ClrLine (855.257.5463)

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Improving Forecasts With Allocations In Hyperion Planning / Essbase

Michigan Oracle Users Summit 2012 November 14, 2012

2011 ClearLine Group, L.L.C.

2011 ClearLine Group, L.L.C.

Worked on 59 different projects at 43 companies Industries

Overview of ClearLine Group

2011 ClearLine Group, L.L.C.

Provide customers with end-to-end services

2011 ClearLine Group, L.L.C.

WHERE ALLOCATIONS FIT INTO FORECASTING

2011 ClearLine Group, L.L.C.

2011 ClearLine Group, L.L.C.

2011 ClearLine Group, L.L.C.

Most of this presentation is focused on this type of allocation

Allocations & Forecasting

Allocations & Forecasting

Allocations & Forecasting

2011 ClearLine Group, L.L.C.

Allocations & Forecasting

2011 ClearLine Group, L.L.C.

Allocations & Forecasting

2011 ClearLine Group, L.L.C.

Allocations & Forecasting

2011 ClearLine Group, L.L.C.

OVERVIEW OF HYPERION ALLOCATIONS OPTIONS

2011 ClearLine Group, L.L.C.

Numerous Allocation Options

Do you already own something that can do the job?

Built-in Options for Hyperion Planning

Built-in Options for Hyperion Planning

Built-in Options for Hyperion Planning

Built-in Options for Hyperion Planning

Oracle Essbase ASO

2011 ClearLine Group, L.L.C.

Hyperion Profitability & Cost Management (HPCM)

Third Party Tools

Calculation Script Definition

2011 ClearLine Group, L.L.C.

2011 ClearLine Group, L.L.C.

Plan = @ALLOCATE ((Product),@CHILDREN (Product), Plan->FY12->Final,, SPREAD, SKIPBOTH);

2011 ClearLine Group, L.L.C.

2011 ClearLine Group, L.L.C.

ALLOCATIONS IN A REAL ROLLING FORECAST

2011 ClearLine Group, L.L.C.

Overview Of A Real System

5 versions for each of the 15 forecast scenarios

Run the set up business rule

Business Rule & Run Time Prompts

2011 ClearLine Group, L.L.C.

Forecast Process (cont)

Run the allocation

Begin Forecast Process

Accept Starting Point

1st optional what if area

Accept Forecast Data

2nd optional Run what ifAllocation area

Accept Forecast Data

Copy to 3rd optional Appropriate what if area Version

Lock & Send Adjustments

Lock & Send Adjustments

End Forecast Process

2011 ClearLine Group, L.L.C.

Intelligent Logic Switching

Substitution Variables and Run Time Prompts