Profitability and Risk Analysis with Essbase Alain Floch Senior Sales Consulting Manager, BI, Oracle Systems Hong Kong & Taiwan

Agenda Analytic Challenges Introduction to Essbase Demonstration Value of Essbase for Profitability and Risk Analysis

Analytic Challenges

“Not all Questions are Created Equal” BI Experts Say….

Questions Can be Worlds Apart What is our performance? What are the top 10 markets? What is the gap to forecast? What customers are most profitable? What are revenues by product compared to last year? What are sales by product, store and quarter? What is the trend for employee-related costs? What is our open headcount? How can we improve performance? How can we increase promotional lift by 10% in our major markets? What happens to our forecast if the dollar declines by 5% to the Euro? What happens to gross margin if our materials costs increase by 20%? Which customers drive 80% of our overall profitability? What happens to same store sales if inventory turns increase by 5%? Situational Forward-looking

Distinct BI Solutions Have Addressed What Should be a Seamless Continuum Ad-Hoc Query & Reporting Standardized Reporting Advanced Analytics Modeling Future Oriented Operational Static Strategic Dynamic Past Oriented

The Business Intelligence Continuum Which customers spend the most? What did this customer buy? Which customers are most profitable? What if demand falls short of forecast? What if we rolled out this product nationwide? Will our cash balances take us through this crisis? What is the Q4 revenue forecast? Future Oriented Past Oriented Operational Static Strategic Dynamic

Modeling Standardized Reporting Dashboards Publishing Pixel-perfect What-if Scenarios Allocations Diverse Needs in the “BI Pyramid” Advanced Analytics Ad-hoc Query & Reporting Predictive Analytics Allocations / Aggregations Set-based Analysis Slice and Dice Parameter-driven Self-service Business Insight Gap

Oracle’s Unified BI Foundation Meeting All BI Pyramid Needs Oracle BI Suite EE Plus Common Enterprise Information Model Consistent definitions Role-based views Model-driven Interactive Dashboards Ad-hoc query Report Publishing Oracle BI Applications Essbase What-if Advanced Analysis Predictive Analytics Essbase

Introduction to Essbase

Highly Scalable BI Foundation BUSINESS INTELLIGENCE FOUNDATION Essbase BI ServerReal Time Decisions Common Enterprise Information Model EPM Workspace OLTP & ODS Systems Data Warehouse Data Mart SAP, Oracle, Siebel, PeopleSoft, Custom Business Process OLAP Fusion Middleware BI Applications Performance Management Applications EPM Workspace Excel XML

Essbase? 1 Richest Business User Experience

SmartView: Microsoft Office Integration

plus a range of superior reporting tools…. Visual Explorer is not just a slick way to visualize, it’s a slick way to visually analyze. Wayne Eckerson, Industry Analyst, TDWI

Broadest Analytic functionality – Drill, pivot, select, compare, rank, sort, filter, group stack, calculate, annotate, write back…….. – Reporting tools enabled by the “Outline” – “Maps” to the business

Essbase? 1 Richest Business User Experience 2 Highly Advanced Calculation Engine

Superior Calculation Power Widest range of functionality: – Simple aggregations to complex cross dimensional allocations – Results stored or calculated upon retrieval – Relationship aware – Application wide or subset specific – Conditional and procedural logic

Comprehensive Library of Functions 350+ functions Simple syntax Extensible Single point of maintenance

Essbase? 1 Richest Business User Experience 2 Highly Advanced Calculation Engine 3 Best Custom Analytic Environment

Optimized Storage Block Aggregate Hybrid Advanced Relational Access

Forward Looking Applications “Predictive Analytics … is where Business Intelligence is going.” A spectrum of analyses – Trending – Forecasting – Scenario modeling – What if testing – Goal seeking – OLAP mining

Demonstration

The Value of Essbase for Profitability and Risk Analysis

Belk Department Stores Inventory Analysis and Store Profitability Needs  Centrally manage financial data throughout the organization  Expand reporting and analysis to complement Lawson Financials  Eliminate paper based reporting with Web based access  Analysis of merchandizing plans  Analysis of inventory levels and sales opportunities Headquartered in Charlotte, NC Largest privately held department store chain in the US 275 stores in 16 states After  Create monthly and year-to-date financial statements used to drive performance  Take action on key drivers - sales, margins, markdowns, and inventory levels and receipts  Calculate fully loaded store profitability  Turned store managers into expense champions

Belk Department Stores Innovative Retailing for Maximum Performance “We are able to isolate all of the fixed costs that affect store profitability—the amount of square footage, capital invested, inventory levels, and other fixed costs. That way, we can rank stores appropriately,” “Without Hyperion Essbase, we just couldn’t have performed the analysis we are doing today” David Palmer Vice President, Financial Services

Essbase – Speed of Thought Analytics Superior tools for the business user Broadest analytic functionality “Speed of thought” response Superior calculation power Comprehensive library of functions Extensive financial and time intelligence Optimized storage Enterprise scale forward looking applications Premium performance Most Highly Advanced Calculation Engine Richest Business User Experience Best Custom Analytic Environment

A Q &

Customer Profitability in Health Care Previous attempt  Three day calculation times  Additional week to produce reports  IT required to maintain rate changes and calculations  Limited insight into customer profitability Leading distributor of name-brand medical and surgical supplies – 51 distribution centers in the US $5.5 billion in revenue (2006) 200,00 SKUs / 20,000 customer accounts After  Identified top 10 low profit customers in each geography  Profile of each customer now shows operational characteristics as well as programs and services purchased  Developed what-if scenarios providing a roadmap to increased profitability for targeted accounts