Beacon Application Services Corporation

EPM Overview

PeopleSoft’s Enterprise Performance Management (EPM) is a suite of analytic applications. The objective of the EPM product suite is to provide business intelligence through the enrichment of data by analytic applications such as Activity Based Costing (ABC), Funds Transfer Pricing (FTP), Risk Weighted Capital (RWC), Workforce Analytics, and Profitability Planning and Simulation (PPS). The business intelligence is intended to address and resolve strategic and analytic business issues.

The foundation of EPM is the Enterprise Warehouse, a data warehouse that can be purchased and implemented as a standalone product. All of the rest of the analytic applications are essentially add on modules in that they rely upon and must be implemented “on top” of the Enterprise Warehouse.

In addition to the warehouse and analytic applications, EPM includes over 400 templates, which involve application and/or industry specific standards for providing information like Balanced Scorecard Reporting, Merchandise Management, Project Analysis, Enrollment Analysis, and Customer Profitability. Other engines including a multidimensional attribution engine, a cash flow generator, a yield curve generator, a financial calculator, and a stratification engine are also built into the product.

EPM incorporates data management tools and techniques such as relational database management systems, multidimensional database management techniques (cube builders), operational data stores (a technique for structuring the way data is stored and managed), and star schema (another technique for structuring the way data is stored and managed) to facilitate the availability and presentation of data. It also permits the use of a variety of reporting tools and techniques to facilitate the reporting process considering factors such as data volumes, presentation format, preparation frequency, and user accessibility.

Processing Flow
The sources of data for EPM include legacy systems, PeopleSoft ERP systems, non-PeopleSoft ERP systems, and other sources of external and/or statistical data. Data is moved to the Enterprise Warehouse using tools known as ETL, or extract, transform, and load. The suggested ETL tool is the product provided by Informatica.

Data fed into EPM using the ETL tools is initially held in a staging area consisting of FACT (like set id control information) and DIMENSION (further descriptions of FACT table data) tables. From here, operational data stores are populated, the data is transformed or enriched through rules based processing, and the operational data stores are repopulated. A posting program is then processed and the data is stored within the warehouse in the form of star schema to facilitate analysis and reporting. Further manipulation of the data into cubes can also be undertaken if desirable, primarily for the purpose of analysis and reporting.

Tables within the warehouse are pre-configured where possible to extend the PeopleSoft solution. Packaged metrics are mapped to PeopleSoft sources and pre-written reports and analysis templates or workbenches are provided. Various reporting tools and templates are available to report against the warehouse data based on user specifications and requirements.

Business Solutions
Collectively, the Enterprise Warehouse, Analytic Applications, and Templates are intended to deal with business principles and issues including the following:

*Business Issue*	*EPM Enabler*
Product Costing	ABC approach to product cost build
Cost Reduction	ABC identification of non value add activities
Pricing and Customer Strategy	Customer Profitability Reporting – using Workbenches and ABC
Product/Service Rationalization	Product Profitability Reporting – using Workbenches and ABC
New Product/Service Analysis	Target Costing/ABC build up of costs
Process Costing	ABC – “stringing” activities together as processes and using cumulative activity costs to determine process costs
Process Improvement	ABC and Process Analysis – simulation of processes using activity based information
Driver Analysis	Identification and measurement of driver data using ABC techniques to understand cost behavior
Forecasting	ABC techniques to develop Activity Based Budgets; Profitability Planning and Simulation analytic application
Risk Management	FTP, RWC – determining the costs associated with interest rate risk and credit rate risks
Management Reporting	Enrichment of data using rules based analytic applications, presentation of data using multidimensional database tools and techniques, and development of reports using a variety of reporting tools
Customer Relationship Management	Customer Profitability Workbenches, ABM (through definition of customer as cost object), Balanced Scorecard Reporting (Customer focus), Enterprise Warehouse (through capture and reporting of revenue data and patterns), Vantive Integration
Business/Industry Process Management	Industry specific workbenches

Balanced Scorecard Reporting
Balanced Scorecard Reporting is one of the more well understood and publicized Workbenches available with the early release version of the product. Its characteristics are as follows:

based on ideas and teachings of Kaplan and Cooper dating back to the 80’s

perspective extends beyond traditional financial measures; focus on four “equally weighted” (hence balanced) areas

- Customer
- Financial
- Internal
- Learning and Innovation

identification and capture of measures (generally no more than five for each of the four areas) on which to evaluate performance

- Customer (percentage of on time delivery based on customer feedback, number of preferred vendor ratings issued by customer)
- Financial (return on net assets, earnings per share)
- Internal (identification and number of internal processes successfully web enabled, number of days required to close the books)
- Learning and Innovation (number of profitable products in existence two years after their launch, percentage of staff members that know html)

provides the opportunity to view the company strategically (the measures can be defined in terms of successful implementation of new strategies)

ABC is the cost management practice of choice

provides the opportunity to successfully utilize benchmarking and other forms of external information (based on definition and reporting of measures)

effectively permits use of key performance indicators (KPI) through definition and capture of measures

Beacon provides EPM implementation services that enable organizations to achieve their business analytics and strategic goals and objectives. We have been working with the EPM product since its beta version implementation and continue to partner with Oracle to offer value added consulting services surrounding the use of EPM. For more information on Beacon’s EPM service offerings, please contact us at 508-663-4433.