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Finit - Creative Solutions for FX Analysis in HFM

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Finit - Creative Solutions for FX Analysis in HFM

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Finit is honored to host this upcoming joint webinar with our client, YUM! Brands, Inc. Yum! Brands, Inc., based in Louisville, Kentucky, has over 44,000 restaurants in more than 135 countries and territories, Yum! Brands was named to the Dow Jones Sustainability North America Index and among the top 100 Best Corporate Citizens by Corporate Responsibility Magazine. The company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development. Jill Baker from Yum! Brands and Mary Chan from Finit will be presenting Creative Solutions for FX Analysis in HFM.

For companies that have local, functional currencies different from the corporate reporting currency FX impact analysis or Constant Rate Analysis may be a simple translation. But many companies today have more complex needs when it comes to FX Analysis. What if your entities submit financial data in the company's reporting currency but operate in a different local currency? For example, an entity in the Czech Republic may have a functional currency in EUR even though the local currency is in CZK. How do you perform FX impact analysis or Constant Rate Analysis for this entity easily in HFM? Yum! Brands has tackled the solution for this in various ways, from the mundane manual calculation in Excel to two different automated creative ways in HFM. In this webinar we will share with you the creative solutions our team and the Yum! Brands team collaborated on to automate translations in HFM.


The webinar will include:

Specific Business Requirements
Application Design Considerations
Setting up the HFM metadata and rules to solve the problem
Execution and end user experience and benefits
Pros and cons of the different options


Presenter: Mary Chan & Jill Baker (Yum! Brands)
Date: 02/23/2018


Finit is honored to host this upcoming joint webinar with our client, YUM! Brands, Inc. Yum! Brands, Inc., based in Louisville, Kentucky, has over 44,000 restaurants in more than 135 countries and territories, Yum! Brands was named to the Dow Jones Sustainability North America Index and among the top 100 Best Corporate Citizens by Corporate Responsibility Magazine. The company's restaurant brands - KFC, Pizza Hut and Taco Bell - are the global leaders of the chicken, pizza and Mexican style food categories. Worldwide, the Yum! Brands system opens over six new restaurants per day on average, making it a leader in global retail development. Jill Baker from Yum! Brands and Mary Chan from Finit will be presenting Creative Solutions for FX Analysis in HFM.

For companies that have local, functional currencies different from the corporate reporting currency FX impact analysis or Constant Rate Analysis may be a simple translation. But many companies today have more complex needs when it comes to FX Analysis. What if your entities submit financial data in the company's reporting currency but operate in a different local currency? For example, an entity in the Czech Republic may have a functional currency in EUR even though the local currency is in CZK. How do you perform FX impact analysis or Constant Rate Analysis for this entity easily in HFM? Yum! Brands has tackled the solution for this in various ways, from the mundane manual calculation in Excel to two different automated creative ways in HFM. In this webinar we will share with you the creative solutions our team and the Yum! Brands team collaborated on to automate translations in HFM.


The webinar will include:

Specific Business Requirements
Application Design Considerations
Setting up the HFM metadata and rules to solve the problem
Execution and end user experience and benefits
Pros and cons of the different options


Presenter: Mary Chan & Jill Baker (Yum! Brands)
Date: 02/23/2018

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Finit - Creative Solutions for FX Analysis in HFM

  1. 1. Creative Solutions for FX Analysis in HFM February 23, 2018 Jill Baker, Yum Brands Mary Chan , Finit Solutions
  2. 2. Finit Overview • 150+ HFM projects • Managed largest roll-out of HFM in North America • 175+ FDM projects • World Leader in FDM implementations and custom solutions • 100+ Planning / Essbase projects • 40+ OneStream Clients (Market Leader) • #1 Implementer of OneStream • Platinum Partner • Founded in 2002 • 90+ employees in 20+ states • Mostly CPAs, MBAs • Gold Level Oracle Partner • 300+ Clients – all CPM / EPM Focused • 1,000+ CPM / EPM projects
  3. 3. The Finit Family Fully aligned with our clients, not just bottom line $ No debt or external ownership Work with Finit employees, no subcontractors Compensation based on CLIENT SATISFACTION PRIVATELY OWNED CLIENT SATISFACTION NO SUBCONTRACTORS DEBT FREE
  4. 4. Finit Customer Success Our values, culture, and approach to becoming a trusted advisor to our customers has led to 100% customer success for every Finit client (300+) and for every Finit project (1,000+)
  5. 5. Some Finit Clients
  6. 6. Questions
  7. 7. Upcoming Cloud Webinars • Friday, March 9 – Breaking Through the Cloud: Closing in on Full Parity with Oracle FCCS • Presented by Geordan Drummond • Friday, March 23 – Breaking Through the Cloud: Intro to Planning in the Cloud • Presented by Chuck Usher
  8. 8. About The Presenters • Jill Baker • (Jill.Baker@Yum.com) • Manager, Corporate IT • 29 years at Yum! Brands • 20 years working with HyperionEnterprise, HFM, FDM, Smart View, and JD Edwards • Responsible for working with Finance team to ensure HFM is working as designed, improving processes, and adding functionality as needed • Mary Chan • (mchan@finit.com) • Implementation Manager • 11 years at Finit • 11+ years working with HFM, FDM, BI+ Financial Reporting, Smart View, FCM and Hyperion Enterprise • Oracle Hyperion Financial Management 11 Certified Implementation Specialist
  9. 9. Agenda • Introduction on Yum! Brands • FX Analysis Definition • Business Requirements • Solutions Evolution • HFM Metadata and Rules Setup • Execution • Users’ Experience • Design Considerations • Benefits • Q&A
  10. 10. About Yum! Brands, Inc. • Based in Louisville, Kentucky • One of the world’s largest restaurant companies with over 44,000 restaurants in more than 135 countries and territories; open over 6 new restaurants worldwide per day on average • Ranked #422 on the FORTUNE 500 list in 2017 with revenues of more than $6 billion • Three Global, Iconic Brands that people trust and champion – KFC®, Pizza Hut® and Taco Bell® • 90,000 global employees
  11. 11. FX Analysis Definition
  12. 12. FX Analysis Definition • a.k.a. Constant Rate Analysis or Constant Currency Analysis • Translate different data (Actual, Budget, Forecast, Prior Year Actual, etc.) using the same exchange rate to enable financial analysis without effect of fluctuation due to changes in exchange rates • Used for comparative and variance reporting on performance measures • Usually for P&L accounts • Occasionally include Balance sheet accounts
  13. 13. Business Requirements at Yum • For companies that have functional currencies different from the reporting currency, FX impact analysis or Constant Rate Analysis may be a simple translation; especially with HFM’s inherent translation function • Yum’s franchisees submit financial data to Corporate in USD, but their business transactions are in their local currencies • Yum requires FX impact analysis for each financial close every period on P&L accounts
  14. 14. FX Analysis in Excel
  15. 15. Manual Approach using Excel • Hyperion Enterprise was the consolidation tool • To compare current year Actual data to prior year Actual using prior year exchange rates, multiple tabs in Excel are required with entities in rows and P&L accounts in columns: • USD – retrieved current year current period data in USD • LC Rate – exchange rates to translate USD back to LC in current year current period • LC – formulas in Excel to divide USD by LC Rate • PY Rate – exchange rates to translate LC to USD in prior year current period • USD at PY Rate – formulas in Excel to multiply LC by PY Rate • FX Impact – USD minus USD at PY Rate • To compare Actual data at Plan rate, another set of spreadsheets are required to perform the multiple translations
  16. 16. FX Analysis in HFM – Round 1
  17. 17. Migration from Enterprise to HFM • When Yum decided to upgrade from Hyperion Enterprise to HFM v11.1.2.0, one of the requirements was to put Constant Rate Analysis in HFM to make it easier to compare P&L data at various FX rates such as prior year Actual, Plan, Forecast, etc. • Only the HFM app for the international division requires FX analysis • HFM performs translation when a child consolidates to a parent in different default currency • No automatic translation if parent and child entities share the same default currency • What to do?
  18. 18. Constant Rate Analysis in HFM Round 1 • Add intermediate parent entities in local currencies to let HFM translate the children entities in USD to local currency such as BHD, EGP, JOD, LBP, etc.
  19. 19. Constant Rate Analysis in HFM Round 1 (cont’d) • Set up various FX rates analysis in Custom3 instead of Scenario because constant rate analysis is part of financial close rather than at the end of close • ScenarioRate is the natural translation for each scenario that aggregates to TopC3, e.g. Actual at Actual Rate, Q1 Forecast at Q1 Forecast rate, etc.
  20. 20. Execution • Administrators to enter the FX rates for the various scenarios for the reporting period – Actual, prior year Actual, Q0F, Q1F, Q2F, Q3F, QXFSpot and AOP • Users to run consolidation at the parent entities in the desired scenario, e.g. Actual • Upon completion of the consolidation, P&L data in Actual scenario is translated into 9 different rates and stored in the Custom3 members
  21. 21. Users Experience • To compare current year Actual data using prior year Actual and Plan (AOP) rates, in a data grid or Smart View, users would retrieve data from Custom3 members TopC3 (or ScenarioRate), PYRate and AOPRate and do the comparison
  22. 22. Round 1 Design Considerations • Pros • Reduce the amount of scenarios needed by setting the FX rates in a Custom as opposed to setting the FX Rates in Scenario • Eliminate the need to copy data from Actual scenario to other FX scenarios • Easy FX impact analysis and reporting from same scenario • Simple Sub Translate rules to get FX rates from other scenarios to translate and store in corresponding Custom members • Cons • Increased number of entities by about 100 • Use of a Custom dimension when only 4 Customs were available • Performance impact depending on the amount of data, overall not bad for Yum
  23. 23. Benefits comparing to Excel Method • Data is available within a scenario upon completion of consolidation in HFM • Sub Translate rules cannot be modified by users without administrator right, whereas Excel file calculations can be altered by users unless cell protection is enforced • Users can easily pull data from HFM to perform any FX analysis as they wish
  24. 24. FX Analysis in HFM – Round 2
  25. 25. HFM Upgrade and Redesign • Five years later, as part of the Brand Realignment initiative, entities were realigned by brand rather than geographically • 7 existing HFM applications were redesigned into 5 new HFM applications – one for Yum consolidation and reporting, and four for divisional analysis • FX impact analysis is set up in all applications since there are international entities in all 5 apps • More entities in the divisional apps as they include store level entities • Round 1 approach is not practical as too many intermediary parents would need to be added which would impact performance to great extent • What to do?
  26. 26. Constant Rate Analysis in HFM Round 2 • Entities are set up with default currencies of USD and no natural translation occurs in HFM • UD1 code – “FACTS” to indicate translation using FACTS rate instead of Average rate • UD3 code – local currency code for the entity such as CAD, EUR, GBP, etc., for looking up the exchange rate • System Translation replaced by Rules referencing the codes in UD1 and UD3 • Sub Calculate Rules to translate from USD to LC, then from LC to USD at the various scenario rates
  27. 27. Constant Rate Analysis in HFM Round 2 (cont’d) • Similar to Round 1, various FX rates analysis is set up in Custom2 instead of Scenario because constant rate analysis is part of financial close rather than at the end of close • May share a Custom with other use • All constant rate members have AggWeight=0
  28. 28. Constant Rate Analysis in HFM Round 2 (cont’d) • Entity
  29. 29. Constant Rate Analysis in HFM Round 2 (cont’d) • Calculation
  30. 30. Execution • Administrators to enter the FX rates for the various scenarios for the reporting period – Actual, prior year Actual, Q0F, Q1F, Q2F, Q3F, QXFSpot and AOP • Users to run consolidation at the parent entities in the desired scenario, e.g. Actual • Upon completion of the consolidation, P&L data in Actual scenario is translated into Local Currency and 7 different rates and stored in the Custom2 members
  31. 31. Users Experience • To compare current year Actual data to prior year Actual, Plan (AOP) and Q1 Forecast (Q1F) rates, in a data grid or Smart View, users would retrieve the data by selecting the constant rate members in Custom2 :
  32. 32. Considerations • Pros • Eliminate users confusion over the use of the created “SCENARIO_CURRENCY” entities • Similar to Round 1 method for end users • Easier metadata maintenance for administrators • Fewer entities required • Cons • Longer development time as Sub Calculate rules need to be written and tested to perform the manual translation
  33. 33. Benefits comparing to HFM Round 1 Method • Easier for users to understand and see the data with the Custom2 LC (local currency) member if translation takes place for an entity
  34. 34. Questions?
  35. 35. Upcoming Cloud Webinars • Friday, March 9 – Breaking Through the Cloud: Closing in on Full Parity with Oracle FCCS • Presented by Geordan Drummond • Friday, March 23 – Breaking Through the Cloud: Intro to Planning in the Cloud • Presented by Chuck Usher
  36. 36. Thank you for Attending! Today’s Presenters: Jill Baker Jill.Baker@Yum.com Mary Chan mchan@finit.com Copy of the slides or Recording: Email us for a copy of the slides or a link to the recording insights@finit.com Past webinars: www.finit.com/webinars Follow us on Twitter for updates: @Finit_Solutions

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