BPC Customer Spotlight: Bell Canada

Mario Barbieri,
Associate Director Finance, Bell Canada

SAP BPC Implementation Project

Planning, Budgeting & Forecasting
May 30, 2013

Agenda

Company description Context of the BPC implementation Our current BPC landscape Transfer process The evolution of our BPC solution Question period

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Who we are
We have one goal: To be recognized by customers as Canadas leading communications company Bell is operating in 4 segments: Bell Wireline Bell Wireless Bell Media Bell Aliant Segments are further broken down in Lines of Business or Units (i.e. TV, Internet, Home Phone, Bell Business Markets, Wholesale, Field Services)

54,000 employees

2012 Operating revenues of $20B

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Context of the BPC implementation

Multiple tools required to document budget, plan, and forecast

Existing tools were built on older technology making them expensive to modify

Process highly manual, decentralized and prone to error

Inability to perform modelling with existing tools

Confirmed the need for a new corporate-wide planning tool

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Project objectives
Objectives
Setup a common platform to document the plan, budget and forecast Decommission corporate legacy systems and all LOB-specific systems Accommodate submission, aggregation and consolidation (intercompany eliminations) processes and BU specific modeling Improve and accelerate month-end reporting and standardize processes across Finance

Results
All corporately reported results are sourced from BPC and new metrics are added monthly 5 systems decommissioned and replaced by 1 corporate-wide planning system: BPC Standard BPC intercompany elimination now used and various submission methods are available. Driver-based models are currently being developed. Leveraging BPC offline distribution and BPC journal entries to accelerate monthend reporting

Daily and intra-day interfaces are in place Leverage prior investment in SAP, by between BW and BPC using delta loads. integrating SAP BusinessObjects into Master data refreshed automatically from the SAP platform (BW data, BWA, ERP) SAP on a regular basis.
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How is BPC used at Bell?

BPC Users
600 users mostly in Finance and growing 5 major subsidiaries 10 line of business spanning: IT, Wholesale, Corporate, Bell TV, Bell Media, etc.

What is documented
Financial Mostly P&L, and Balance sheet for one LOB Headcount End of period employee, full-time equivalent, etc. Metrics - Business unit specific operational drivers (e.g. subscribers, Average Revenue Per Unit, etc.)

Processes
Budget documented in November for the following 12 months Forecast Corporate forecast documented 3 times a year and BU specific on a monthly basis 3-year Plan Documented as part of the Strategic Planning process Outlook Documented just prior to month-end close or at mid-month (as required) Actual For metrics only (each BU obtains this information from various sources and loads it into BPC for month-end)

Reporting
Corporate month-end Management reporting BU Management reporting Planning related reporting CRTC reporting

Support
Managed by the Finance department. Limit the use of BADI where possible to keep flexibility and control within Finance. Key structural items (Dimensions, cubes, etc.) are transported. Scripts , IS and reports are ported.
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BPC applications as of May 2013

BPC (7.5 NetWeaver)
Rate FX rates Metrics Financial metrics

TAFI Financial transfer

TAHR Headcount transfer

BRS Residential P&L

Corporate P&L

Media FI Media P&L and Balance sheet

HR Headcount

SAP Business Warehouse (BW 7.0 with BWA) - Staging area SAP ECC 6.0
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Our landscape - Financials

Corporate Documentation of the official financial plan, budget, forecast Corporate reporting
TAFI

Applications Dimensions CATEGORY ACCOUNT TIME COST CENTER TRADING PARTNER DATA SOURCE POSTING LEVEL REPORTING CURRENCY BIZ TYPE DEPARTMENT VENDOR TAGROUPID TAID TAFROMTO # of members 153 13,587 217 42,848 365 149 7 2 169 105 1135 1404 307 2 # of hierarchies Corporate 4 2 8 1 1 2 2 1 1 1 1 1 BRS MediaFI

BRS Documentation of the financial plan, budget, forecast for the Residential Business unit BU specific reporting MediaFI Documentation of the financial plan, budget, forecast for the Residential Business unit BU specific reporting TAFI Documentation of financial transfers Discussed in more detail later on

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Our landscape HR & others

Applications HR TAHR Applications Dimensions CATEGORY ACCOUNT METRICS TIME BUSINESS UNIT PRODUCT DISTRIBUTION CHANNEL NETWORK TECHNOLOGY CUSTOMER TYPE REGION POSTPAID/PREPAID DATA SOURCE RATE RATE ENTITY INPUT CURRENCY # of members 153 271 217 47 42 28 20 15 15 4 149 2 1 20 # of hierarchies 1 2 2 2 1 2 1 1 1 1 Metrics Rate

Dimensions # of members # of hierarchies CATEGORY 153 ACCOUNT HR 6 1 TIME 217 2 COST CENTER 42,848 8 EMPLOYEE 34,857 1 BARGAINING UNIT 28 1 FORCE STATUS 15 1 TIER 13 1 EMPLOYEE GROUP 9 1 BILLABLE 4 1 FULL TIME/PART TIME 4 1 MANAGEMENT 3 1 DATA SOURCE 149 1 TAGROUPID 1404 1 TAID 307 1 TAFROMTO 2 1

HR Documentation of the official EOP/FTE plan, budget, forecast Corporate and BU reporting

TAHR Documentation of EOP/FTE transfers Discussed in more detail later on

Metrics Documentation of the official operational metrics plan, budget, forecast Corporate and BU reporting

Rate Used to hold the currency conversion exchange rates and other global drivers

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Implementation challenges
Under estimated change management efforts Training was conducted before each planning cycle, and various techniques were used: F2F, tips & tricks, e-learning, clips, desk guide Main planning cycles were conducted in parallel so that users could reconcile results between the two tools Created a monthly forum for BU coordinators to voice their needs and include in project feedback Provided access to the BU coordinators to run specific data manager packages to facilitate their processes

Willingness of users and process owners to let go of the old tools

Incorporating needs from diverse groups

Offering users the same flexibility as the previous manual process

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Lessons learned
Brought in experts for specific development items Built the expertise internally, including training material on scripting

Finding skilled resources to help with development was a challenge

Underestimated the integration efforts with SAP BW

Issue with data stored at parent nodes in BW Many BW dimension members had to be renamed Work-around required since BPC 7.5 does not handle time-dependent hierarchies The administrative effort to maintain the two applications outweighs the benefits of ownership and performance We refined our governance around when a new application needs to be built BW Accelerator available in our BW was a MUST to meet performance expectations Dependency on BW jobs/processes impacts predictability of BPC issue to address as part of our BW/BPC roadmap

Creating two applications with exactly the same dimensions is not a best practice

BW environment impacts the performance on your BPC platform

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Transfer process
For financial reporting purposes Bell aligns budgets, forecasts and historical actuals to current organizational and reporting structures. Transfers eliminate the 'noise' associated with year-over-year variances and allow for better decision-making

Purpose

Triggering events

Organizational changes: people, teams, or functions moving within the organization Transfer of functions to a subsidiary from Bell Company wide re-organizations (budget reduction)

Data

The data that is most often restated via the transfer process are Revenues, Expenses and Headcount

Complexity

Transfers never impact financial results previously reported externally. Headcount transfers need to be processed at the individual employee level to keep HR data in sync Transfers impacting reported LOBs and accounts require approval

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Transfer process
A solution was introduced to track individual transfers and control the approval process. It combines: - Input schedules validations and controls - BPC validation rules - Additional intelligence via SAP BADI (ABAP)

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Whats coming up for Bells BPC platform?

2015 Migration of consolidation functionalities from Hyperion Enterprise to BPC 10*

BW upgrade to 7.3 and BPC upgrade to V10 (on HANA) Compensation, commission and other driverbased models 2013

* Equity Elimination, Cash Flow, Full Balance Sheet, Notes to Financial Statement
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Driver based models

Compensation Model
- Models headcount (FTE and EOP) needs at the individual employee level - Calculates salary expenses based on each employees hourly rate - Calculates other employee related expenses (benefits, taxes, bonus, etc.) and allocates across valid cost centers - Performs variance analysis against actual at the employee level and waterfall reports - Allows planner to add new headcount using master data on the fly

Commission model
- Models commission payment made by our Wireless business unit to the various retailers - Leverages subscriber activation assumptions and contractual commission rates - Determines Cost of Acquisition (COA) and Cost of Maintenance (COM) - Performs variance analysis against actual and Marketing assumptions

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Our rationale for upgrading to BPC 10

Removes dependencies between BW and BPC, improves predictability of the BPC system (by deploying a separate BW 7.3/HANA instance) Improves performance of the BPC system and avoids performance deterioration during peak usage period or during processing of monthend activities (by introducing HANA in-memory database) Introduces a toolset that is simple for users to use and adopt, is easy to administer by the support team and is easy to find an expert to assist with new development activities (by upgrading BPC to version 10) Enables the migration of the Consolidation processes from the obsolete Hyperion Enterprise (by leveraging the advanced consolidation functionalities available in BPC version 10)

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Future landscape BPC upgrade

NEW

EPM Excel Add-in / Web client

BEx Analyzer

PLANNING

CONSOLIDATIONS

SAP BPC V10

SAP BW 7.3

SAP BW 7.0 Corporate BW (Non-Unicode)

BWA

BPC BW (Unicode)
HANA

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HANA proof of concept with SAP

SAP migrated our live application set from 7.5 to 10 using UJBR SAP ran program BPC_HANA_MIGRATE_FROM_10 in TC SE38 to make a standard BPC 10 infocube HANA optimized SAP used a dedicated BPC 10 system to perform this proof of concept A number of issues were uncovered during the proof of concept and subsequently addressed Scenario
Copy Budget from CORPORATE app to BRS * Copy TAFI to Corporate DMP - Calling custom logic (65,000 record generated and submitted) * Intercompany eliminations (consolidation) 3 years of data Lite optimize of Corporate app Input 12,000 records via input schedule Process cost center dimension (43,000 members) Report EVDRE multiple full expansion

BPC 7.5 NW with BWA

17-21 minutes 1 hour 54 minutes (on busy workdays) 7 minutes (100,000 records) 26 minutes 2-3 minutes 18 minutes 20 minutes

BPC 10 SP9 on HANA

26 seconds 46 seconds 6 minutes ** (2,478,082 records) 54 seconds 10 seconds 3 minutes, 10 seconds N/A ***

* Issue with invalid members, required notes 1803288, 1810979, 1815456, 1835293 to solve issue ** Issue identified with hierarchy selection box not working (fixed in SP14 Patch1 of EPM 10 add-in) *** EVDRE report did not complete with memory error - Scheduled to be fixed in EPM 10 Add in SP14
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Questions?