EPM for Improved

Budgeting and Financial

Reporting

Andy Wickham, Controller

AY McDonald Industries, Inc.

Loras College Business Analytics SymposiumMarch 25, 2015

Who is A.Y. McDonald

Founded in 1856 by Andrew Young McDonald

Remains family owned – 5th generation

Has history of acquisitions

Growth will be drive through focus on core businesses

while capitalizing on strategic acquisitions

The mission of A.Y. McDonald Mfg. Co. in the words of our founder is

“To make good products and to sell them honestly.”

We, the stockholders and employees, accomplish this by extending the McDonald family culture

through excellent customer service and by focusing on our customers’ needs.

A.Y. McDonald Industries

Commercial HVAC

Commercial Electrical

Commercial Plumbing

Injection Molding

Water Works Brass

OEM

Stainless Steel

Water Works Brass

Pump

Plumbing

High Pressure Gas

3

About A.Y. McDonald

Who is A.Y. McDonald

Locations

Dubuque, Iowa

Albia, Iowa

Elizabethton, Tennessee

Sparks, Nevada

Our Product Lines

Water Service Lateral

Northern Installation

Southern Installation

Overview

A.Y. McDonald’s initiative to implement EPM

1. Organizational Need

a) Streamline annual budgeting process

b) Develop method to complete mid-year financial forecasts

c) Improve monthly consolidated financial reporting

d) Implement user interface for reporting

2. Selection process, how did we decide on Oracle Hyperion?

3. Implementation process

4. Benefits of EPM

a) Users’ empowerment

b) Creating efficiencies

c) Best in class tools

d) Establishing “go-to” data

5. Lessons learned along the way

Why EPM?

Significant accounting effort didn’t leave time for analysis:

Effort to pull together numbers

Effort to ensure accuracy of the numbers

Method of budgeting created environment where accounting owned

the numbers and department manager disconnection

Errors created skepticism and lack of ownership

Wide assortment of source data with no direct connection to housed

data

Following up on variances is difficult without source data

Common approach to budgeting that allows for leveraging across

existing businesses and future acquisitions

Establish single data set with direct user interface capability

Over-reliance on Spreadsheets

Annual budgeting process

Monthly Financial Reporting

Separate General Ledgers at each business

Different chart of accounts

Getting into and understanding details is difficult

Different financial statement layout

Changes made during consolidation to force consistency

Some inconsistency unknowingly remained

Little consistency in financial statement presentation at subsidiary

level

Multiple currencies, USD and CAD

Significant review of final reports needed to ensure accuracy

Reporting & Analysis

Requests for new reports or

changes to existing reports

requires IT effort

Reports run on ERP server

Transactional work such as order

processing, production reporting,

and picking/shipping shares

system CPU with reporting

Much reporting taken from ERP,

put into Excel, manipulated and

emailed out to decision makers

Selection Process

Review three industry leading solutions along with ERP solution

Oracle Hyperion Planning & EPM

IBM Cognos Express

Infor dEPM

EPICOR EPM

Implementation Cost

Software Solution

Implementation Consultant

Hardware – Existing VM Server

Implementation Effort (Jan – Nov)

RFP & approval – (Jan-April)

5 month integration – (June-Oct)

2015 Budget

Consolidated Financial Reporting – Nov. 2014

Overarching objective

Implementation Deliverables

Development of data cubes

Compensation/Payroll Budget

Capital Spending Budget

Financial Budget & Reporting

Comp AYMRptCapX

DivisionDeptJobEmployeeScenarioVersionYear

DivisionDeptAccountProductCurrencyViewScenarioVersionPeriodYear

DivisionDeptAsset ClassAsset DetailScenarioVersionYear

Implementation Deliverables

Establish dimensional hierarchies

Identified 10 needed dimensions

1. Division

2. Period

3. Year

4. Scenario

5. Version

6. Department

7. Account

8. Product

9. Currency

10. View

Hierarchy aids reporting

Implementation Deliverables

Common chart of accounts

Data connection

Daily system feeds

Monthly file loads

Implementation Deliverables

User security

Report creation

P&L

Balance Sheet

Statement of Cashflows

Capital Spending

Departmental reporting

Employee counts

KPI reporting

Benefits of EPM

Non-financial managers access

Input budgets

Headcount/compensation

Capital projects

Operating expenses, including supporting detail

Ability to access results and run reports

Excel add-in allows for ad-hoc reporting

Benefits of EPM

Delivers efficiencies

Allow for quick entry of data during the planning process

Automated consolidation shortens time to close books

Less time on assembling data = more time to analyze them

Benefits of EPM

Best in class tools

Web based user interface

Built in user task lists and instructions

Houses supporting detail, notes,

attachments

Adhoc analysis via Excel add-in

Cubed data structure allows for

changes to be made at any level

of hierarchy

Drill through to source data

Automated data loading

MS Office integration

Benefits of EPM

Data

Creates single repository for actual, forecast, and plan data

One version of “the truth” for your organization

Data hierarchy creates natural inflection points

Scenario dimension allows for “what-if” analysis

Stepping stone to business intelligence

Financial

Sales

HR

Operations

Logistics

Dashboards

Dashboards

Adhoc Analysis

M.S. Office

Report Books

Mobile

Std Reports

EPM

&

Business

Intelligence

Lessons learned

Spend more time on front end planning/scoping

Force subsidiaries involvement

Drive resolution on hierarchy differences

Statement of Cashflows tend to be unique by organization

Drill through and data loads

Don’t underestimate the technical learning curve Reliance on consultant expertise

Identify key items for knowledge transfer

Need multiple in-house experts

EPM is a truly leveragable investment

Not just a financial reporting tool

Perfect for complex spreadsheets

Detailed reporting

Sales

Operations

In summary

Use EPM to:

Transform accounting staff

Provide users direct access to data and tools

Establish consistent, agreed upon data sets

Leading to better data to improve decision-making

EPM implementation can be the first project in a series of effort to

become a data driven organization

Financial data

Multiple data sets, e.g. Sales, Operations, HR

Precursor to business intelligence

Q&A