For companies, financial consolidation and reporting can become a very rigorous and time-consuming process due to the ever-changing financial environment and difficulties managing intra-company operations. Financial consolidation applications, such as HCM and FCCS, offer managers a bird’s-eye view of the organization's financial disposition as a whole.
Q: Can you give me an overview of FCCS and HFM? What are they used for and when should my business consider using either?
A: Oracle’s Financial Consolidation and Close Cloud (FCCS) and Hyperion Financial Management (HFM) are both financial consolidation and reporting solutions. HFM, included in Oracle’s Financial Close and Reporting EPM suite, provides rapid consolidation and reporting to meet global regulatory requirements and reduces the cost of compliance. FCCS includes standardized dimensions that provide significant functionality with limited need for configuration or customization, ultimately enabling built-in task orchestration for management of overall processes.
Built ideally for small to mid-sized companies, FCCS was intended to standardize and streamline the consolidation process based upon pre-defined industry best practices. Compared with HFM, which is tailored to larger midsized and enterprise-level organizations, FCCS can seem more limited in functionality as it is not as customizable or complex in the reporting drilldown it offers.
Q: What framework is each product built on and what would make for the easiest transition for PBCS users?
A: HFM uses a relational database structure while FCCS is built on Essbase, a multi dimensional database structure. For example, if you currently use Oracle Planning and Budgeting Cloud Services (PBCS) the two applications share the same database and calculation engine and a very familiar interface.
HFM customers migrating to FCCS should expect a higher price tag for training and database/app conversion.
Q: FCCS dimensions consist of 11 predefined standard dimensions and two custom dimensions. How does this compare to HFM’s “unlimited” custom dimension? And what does it offer in terms of flexibility?
A: The intended purpose of FCCS is to standardize the consolidation process without the need for heavy technical support. The 11 predefined dimensions in FCCS compared to 8 in HFM include dimensions that many companies that use HFM needed to use a custom dimension. One example is the “Movement” dimension in FCCS that is used for tracking balance sheet account changes from period to period. In HFM a custom dimension is typically created and rules written to calculate balance changes. This minimizes the impact of FCCS by only allowing for the creation of 2 custom dimensions instead of the “unlimited” custom dimensions of HFM.
Q: What are some of the "out of the box" functionalities of FCCS? And how do they differ from the customized offerings within HFM?
A: “Movement”, one of FCCS’ predefined dimensions, helps automate cash flow reporting using hierarchies and system calculations. In HFM, one of the custom dimensions is typically used to capture the movement in account balances and requires building custom calculations (rules) for cash flow reporting.
FCCS provides system calculations for calculating changes in balance sheet accounts due to foreign currency translations and for calculating the Currency Translation Adjustment (CTA) value. In HFM, rules are specifically written to calculate CTA and the movement in balance sheet accounts due to foreign currency.
FCCS has integrated a Financial Close Manager which greatly improves the ability to track and monitor the status of the multiple processes involved during a typical monthly close cycle. Users of HFM had to implement a separate financial close module which provided similar functionality but required additional time and money to implement compared to the integrated close manager functionality in FCCS.
FCCS also offers pre-built functionality for multi-GAAP (Generally Accepted Accounting Principles) financial reporting. You can select this option during the initial implementation and it automatically provides the ability to report on a GAAP basis as well as non-GAAP basis such as IFRS (International Financial Reporting Standards). GAAP is primarily used in the US and IFRS is used by a majority of foreign entities. Enabling the Multi-GAAP option will reduce the number of custom dimensions available from two to one as the function operates under one of the two custom dimensions available.
Q: FCCS offers pre-configured rules while with HFM, clients can script custom calculations such as management reporting. Is this true?
A: Yes, FCCS contains many “pre-fab” system calculations that need to be customized within HFM. The pro for FCCS: Some of these system calculations help facilitate cash flow reporting as well as foreign currency translations. This is especially true if these are done through the use of additional standard dimensions such as the “Movement” dimension. The pro for HFM: customizing the rules per client allows for flexibility as well as user preference scalability, as in many cases these rules can be easily duplicated and modified from one case to another.
Q: Who benefits from using FCCS rather than HFM?
A: The prebuilt dimensionality and functionality of FCCS provides a shorter application implementation timeline compared to HFM. Designed to be administered by a finance team, FCCS has a simpler user interface that is shared among other Oracle Cloud EPMs. In general the standardized functionality is more adequate for small to mid-sized companies that can benefit from pre-defined consolidation and reporting solutions with a short implementation process.
Q: Who benefits from using HFM rather than FCCS?
A: HFM offers complicated consolidations as one may customize rule scripts as they please based on user needs. FCCS, in its current version, is not ideal for large-sized companies that require customizable and more detailed reporting. HFM is included amongst other applications such as Oracle Hyperion Financial Close Management (FCM) and Oracle Hyperion Financial Data Quality Management Enterprise Edition (FDMEE). If you’re looking for an application that can be hosted on premise or on a Hybrid Cloud model, HFM is the better choice as FCCS is only offered as SaaS by Oracle Cloud.
Q: Does Velocity have a library of scripts for rules to add to HFM?
A: Velocity tailors every solution to the needs of our customer. As such, our delivery team will work with you to understand your pains and develop scripts that solve -- and anticipate -- the requirements you currently have. Rely on our expertise, with more than 20 years of industry knowledge, serving 50 customers, to help you realize the maximum benefit of your investment.
Q: We know that FCCS is delivered exclusively as SaaS. How is HFM delivered?
A: At Velocity, we believe in finding the right solution for the right workloads. If it makes the most sense to host your Hyperion, or HFM, applications on premise, we can support your management of those applications. If you are looking to lift and shift your applications to the cloud, we are there to migrate, manage and host. If you’d like project support, we can help there too. Wherever you are on your cloud journey, we’ll meet you there.
Michael Piloto - Senior Director, EPM and BI Lines of Business at Velocity Technology Solutions. In his role as Senior Director, Enterprise Performance Management (EPM) & Business Intelligence (BI) Lines of Business, Michael leads the global sales and delivery of outsourcing, managed services, consulting and program/project management for Hyperion, Oracle BI, Qlik and Tableau.