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    Hyperion Financial Management

    Uploaded by

    Senthilkumar
    Hyperion Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd

    Hyperion Financial Management

    Uploaded by

    Senthilkumar
    83 views8 pages
    Hyperion Financial Management

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF, TXT or read online from Scribd

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    Hyperion Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    83 views8 pages

    Hyperion Financial Management

    Uploaded by

    Senthilkumar
    Hyperion Financial Management

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 8

    White Paper

    How to optimize close cycle using Hyperion


    Financial Management

    - Navpreet Singh, Principal Consultant

    Not long ago, the advent of sophisticated computing and advancements in


    communications led companies to aspire to a virtual close. Recent studies
    conducted by the Hackett Group suggest that the top 10% of companies close
    their financial books in less than five days and want to reduce this further.1 The
    introduction of the SarbanesOxley Act (SOX) and eXtensible Business Reporting
    Language (XBRL) has moderated these perceptions resulting in a clear shift of
    companies preference from speed to accuracy. However, the need of the hour is
    a judicious mix of speed and efficiency in the financial reporting process without
    undermining accuracy.
    Financial consolidation solutions centered on Hyperion Financial Management
    (HFM) are highly effective in helping businesses streamline their close process. It is
    possible to significantly enhance efficiency and performance through HFM solutions,
    especially when the company has accumulated a number of discrete financial
    systems.

    The Hackett Group Benchmarking - Solutions Book of Numbers

    External Document 2014 Infosys Limited

    Stages of Automation in HFM


    Improvements in computation methodologies, closeintegration and standardization of Hyperion Enterprise
    Project Management (EPM) systems like Strategic Planning,
    Budgeting and Financial Consolidation are facilitating the
    dissemination of management analysis. However, many
    times, internal processes leave little scope for organizations
    to condense their reporting timetable or to allow major
    advances in the depth of management information.

    External Document 2014 Infosys Limited

    Before rolling out any improvement initiative it is important to establish the nature of bottlenecks and determine whether these are processoriented or technology-oriented.

    1. Process Changes
    It is observed that a longer close cycle is associated with inaccuracies and a need for rework thus, getting it right the first time must
    be the key principle for finance and accounts staff. Organisations often view the internal deadlines as moving targets. Such a view
    need to be avoided at all costs. In such a situation, the operational changes necessary can range from a full-fledged process revamp
    to minor tweaks for quick wins.

    a. Elimination of non-value-add
    activities

    It is critical to conduct a well thoughtout analysis to ascertain whether such


    extensions in reporting objectives could
    lead to a longer close cycle.

    b. Common chart of accounts

    Often the capabilities of consolidation


    systems are extended to leverage financial
    data for internal management reporting.
    At times, data related to key performance
    indicators (KPIs) is fed into systems that are
    no longer relevant in light of the evolving
    business scenario.

    External Document 2014 Infosys Limited

    One of the common pitfalls of inorganic


    growth is the plethora of discrete
    information sources.

    Harmonization of the chart of accounts


    becomes a vital requirement to break these
    resultant silos. The importance of a unified
    reporting layer built over the common
    chart of accounts cannot be undermined.
    In many organizations, roll-outs of an
    HFM solution are often seen as a first step
    towards the long-term vision of unifying
    management information systems. HFM,
    along with its arsenal of data integration
    tools like Hyperion Financial Data Quality
    Management (FDM) and Oracle Data
    Integrator, can offer quite a few tactical
    solutions to meet the organizations
    requirements for management and
    statutory reporting during such transition.

    c. Process of soft close at monthend

    d. Integrated solution for statutory


    filings

    e. Dedicated team for financial


    reporting

    The saying, the more you sweat in peace


    the less you bleed in war holds true in the
    corporate context. Typically, controllers
    conduct multiple reviews before the
    monthly financial statements are finalized.
    In the long run, a soft close can continue
    to reduce variability in the estimates and
    accruals.

    In most organizations, the task of XBRL


    tagging is either outsourced or performed
    internally after finalizing financial
    statements. Either of these situations
    stretches the overall duration of the close
    cycle. Tools like Hyperion Disclosure
    Management offer the opportunity to fully
    integrate and thus automate the record-toreport cycle.

    Where economies of scale permit,


    organizations must use a managed
    services or a factory approach. This can
    bring a sharper focus to operations and
    lead to a substantial reduction in the
    close cycle. Besides, these approaches can
    provide an added advantage of greater
    standardization and predictability to the
    reporting function.

    Most organisations are able to integrate


    their trial-balance loads with HFM which
    provides them a head-start. By instituting
    a soft close many reconciliation activities
    can be shelved. Introducing the soft close
    process can also reduce the top-side
    adjustments being applied directly in HFM.

    Likewise, the newly introduced Hyperion


    Tax Provision solutions offer a single
    version of data for both financial reporting
    and tax requirements. This integrated
    solution reduces the data collection effort
    and provides a better audit-trail through
    easy traceability of information.

    Technology Initiatives

    Process Change

    Eliminate Non- value-add activities

    IT Systems Consolidation

    Common Chart of Accounts

    Master Data Management

    Introduce Soft Close

    Automate Administration tasks

    Integrated Reporting Solutions


    Dedicated Teams for Financial Reporting

    ycle
    ize close c

    im
    ors to opt
    ncing fact

    Bala

    External Document 2014 Infosys Limited

    2. Technology Initiative
    HFM is often described as a finance-owned
    and IT-supported system. On most occasions,
    the organizational challenge is not concerning
    the lack of information, but to have a reporting
    tool that works the way business thinks. Thus,
    in order to realize the true value of HFM, it is
    crucial that business users are able to assume
    greater self-sufficiency.
    Technology plays the role of an enabler
    during the implementation of HFM systems
    as addressing the business and regulatory
    complexities often becomes a priority. It is
    incorrect to assume that technology alone can
    solve major problems surrounding the financial
    close. Nonetheless, some key factors related to
    technology can make the journey easy.

    a. Consolidate IT systems for


    smooth operations

    b. Streamline metadata
    management

    c. Automate admin routines

    Apart from operational glitches,


    maintaining a wide range of products can
    introduce an additional challenge in the
    timely compilation of monthly results. It
    always helps to unify the IT backbone on
    a common platform. This standardization
    can provide an edge to the companys
    endeavour to improve their IT service and
    shorten the close cycle.

    Absence of a proper master data


    management strategy often results in
    information mismatch across different
    sources. Essentially, master data updates
    need to be completed in a narrow window
    prior to the start of the monthly close
    cycle. With the passage of time, ongoing
    maintenance of master data across EPM
    applications like HFM or Hyperion Planning
    can become challenging. Automation
    of this process using Hyperion Data
    Relationship Management (DRM) or
    custom integration tools can improve the
    data quality.

    For the financial close process, substantial


    information is required from General
    Ledger (GL), Human Resource (HR), Tax and
    other sources. Oracle Data Integrator or
    other integration tools can be extensively
    leveraged to automate some intensive and
    recurring tasks such as:
    Data load process
    Balance roll forward
    Routine calculations or KPIs
    Automating these tasks greatly reduces the
    administrators involvement and provides
    self-sufficiency to end users. This can set
    the platform for optimizing the month-end
    cycle.

    External Document 2014 Infosys Limited

    References
    With the objective of addressing growing aspirations, implementation programs need to be sufficiently
    flexible and balance the priorities of different stakeholders. Increasing advancements in technology
    make it imminent that a multi-prong strategy be deployed to make the entire process a success. A
    smooth transition requires all-round synergy that can overcome the challenges involved at different
    levels technology, process and human resource.

    External Document 2014 Infosys Limited

    About Infosys
    Infosys is a global leader in consulting, technology and outsourcing solutions. We enable clients, in
    more than 30 countries, to stay a step ahead of emerging business trends and outperform the
    competition. We help them transform and thrive in a changing world by co-creating breakthrough
    solutions that combine strategic insights and execution excellence.
    Visit www.infosys.com to see how Infosys (NYSE: INFY), with US$8.25 billion in annual revenues and
    160,000+ employees, is Building Tomorrow's Enterprise today.

    For more information, contact askus@infosys.com

    www.infosys.com

    2014 Infosys Limited, Bangalore, India. All Rights Reserved. Infosys believes the information in this document is accurate as of its publication date; such information is subject to change without notice.
    Infosys acknowledges the proprietary rights of other companies to the trademarks, product names and such other intellectual property rights mentioned in this document. Except as expressly permitted,
    neither this documentation nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, printing, photocopying, recording or
    otherwise, without the prior permission of Infosys Limited and/ or any named intellectual property rights holders under this document.

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