Hyperion Higher Ed User GroupA Comprehensive Planning and Reporting Model for Higher Education: Hype

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Hyperion Higher Ed User GroupA Comprehensive
Planning and Reporting Model for Higher
Education Hyperion Strategic Finance

• Andrew Harker, Ed. D Director of Budget
  Management, Stanford University

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Higher Ed Financial Management

• What are the challenges we are facing?
• An increasing desire to have continuous,
  comprehensive planning and reporting
• The challenges/struggles of making (external)
  GAAP-based financial reporting mesh with
  (internal) fund accounting-based reporting
• The systems we have/are putting in are not all
  that conducive to this type of reporting (for
  fund accounting, for higher education)
• Board/Senior management expectations sometimes
  dont align with our reality
• Yahoo! and Cisco close their books and report in
  days, every month
• Dashboarding/KPI is easy and helpful in
  Corporate America
• Reports they are used to are simple all money
  is green
• Reports should be straightforward and easy to
  comprehend

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3 Broad Components

• Actual Revenues, Transfers, Expenditures, Assets,
  Liabilities
• Coming from the General Ledger (legacy, Oracle,
  SAP, Banner, etc.)
• Detailed Budget
• Coming from Hyperion Planning, Hyperion Pillar,
  Excel, etc.
• Most often only for Income Statement items
  (Revenue Expense)
• Long-Range Forecasting
• Multiple year, what-if scenarios, aggregated
  data
• Done most often in Excel
• Usually not integrated into other systems
• If multiple units are doing modeling, other units
  tend to be in the dark

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What have we been working with at Stanford?

• Hodge-podge of financial information systems
• Controllers Office responsible for preparing the
  external GAAP-basis financial statements using a
  third-party consolidation tool
• University Budget Office coordinates preparation
  of detailed fund accounting basis budgets in
  Hyperion
• Long-Range modeling done in Excel
• By multiple units (Central, Med School, Business
  School)
• Totally disaggregated and disconnected
• Variance Analysis and Reporting done as a
  separate process, in separate systems
• If tied together at all, nominally tied to
  detailed budgets only

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University Financial Structure
Stanford Consolidated Financials
University
Non-formula Units (Provost GF Allocations)
Hospitals
LLCs
Auxiliary Enterprises
Continuing Studies/ Summer Session
Graduate School of Business
School of Medicine
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Consolidated Budget by Fund Type
in millions
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Statement of Activities to Consolidated Budget
Crosswalk
(in millions of dollars)
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Bridging the GAAP
Financial data has to be manipulated (moved),
aggregated, or disaggregated for different
purposes

• Student Financial Aidmoves geographically from
  expenditure to reduction from revenue (but only
  for tuition grants, not other types of Aid)
• Capital Asset Acquisition is a use of funds, but
  the Depreciation Charge is what hits the external
  Income Statement
• Fringe Benefit Burden expenditure vs. external
  Benefits pool payments
• Internal Revenue/Expense and interfund transfers
  vs. the transfer that show in GAAP reporting
• Debt Service
• Internal allocation of principal amortization as
  expenditure
• Retirement of debt principal as Balance Sheet
  transaction
• GAAP Fund Types vs. Fund Accounting Fund Types

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Whats so funny about Peace, Love, Fund
Accounting?
FASB Reporting (GAAP)
PR
TR
UR
End Princ
Gifts End Inc
GC
UR
Fund Accounting
With apologies to Elvis Costello and the
Attractions
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The Frustration
We have a disaggregated, discontinuous,
disorganized overall process.

• Different units maintain their own models
  separately
• No common thread no continuous feedback or
  updating
• Manual reconciliations between different views
• How many times do we reinvent the wheel?
• What were we thinking? (What were we thinking!)
• With our hands full with Income Statement
  modeling, who has time for Balance Sheet
  modeling?
• The ERP systems we have do not facilitate this
  (no matter what the sales team says)

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The Disconnect
Unrestricted Funds Modeling
Endowment Principal Growth Modeling
Tuition/Fees Enrollment Forecasting
Detailed Budgets entered by Units
Sponsored Activity Forecasting
Financial Actuals Consolidations
Capital Planning/Budgeting
Debt Service Planning
School submodels
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Whats so funny about Peace, Love, Fund
Accounting?
FASB Reporting (GAAP)
PR
TR
UR
How do you plan, model, and report on both views
consistently, coherently, and meaningfully? And
do it without building your own system?
End Princ
Gifts End Inc
GC
UR
Fund Accounting
With apologies to Elvis Costello and the
Attractions
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What is the vision?
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3 Broad Components

• Actual Revenues, Transfers, Expenditures, Assets,
  Liabilities
• Coming from the General Ledger (legacy, Oracle,
  SAP, Banner, etc.)
• Detailed Budget
• Coming from Hyperion Planning, Hyperion Pillar,
  Excel, etc.
• Most often only for Income Statement items
  (Revenue Expense)
• Long-Range Forecasting
• Multiple year, what-if scenarios, aggregated
  data
• Done most often in Excel
• Usually not integrated into other systems
• If multiple units are doing modeling, other units
  tend to be in the dark

Consolidation Hyperion Financial Management
Budgeting Hyperion Planning
Modeling Hyperion Strategic Finance
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Using Hyperion Tools to Integrate
Hyperion Planning
Detailed Budgeting
Different Levels of Data Detail as Relevant to
the Different Needs
Financial Reporting
Strategic Modeling
Distributed and Customizable Modeling Real-time
Access
Hyperion Strategic Finance
Hyperion Financial Management
Automated Data Integration Between the Systems
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A Continuous, Integrated Process
As You Move Through the Fiscal Year, Your
Comprehensive Model Gets Updated
FALL
WINTER
Consolidated Budget
External Financial Statements
Each Offices Model Gets Data From and Pushes
Data To the Other Models
SPRING
SUMMER
The Crosswalk
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HSF in Higher Education

• Scenario Comparison
• Early Forecast, Late Forecast, Budget,
  Projection, Actuals
• What-If Modeling
• Side-by-side comparisons
• Sensitivity analysis
• Models within models
• Endowment Principal growth model?Feeds Endowment
  Income Projection
• Capital Asset growth model?Feeds Debt
  Service/Depreciation
• Net Changes in Assets?Feed back to Balance Sheet
• Using the same framework, each school/unit can
  set up their own models, drivers, elements

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Hyperion Strategic Finance
Create financial models for each school or
division in Hyperion Strategic Finance and
consolidate them to a total for the university.
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Hyperion Strategic Finance
Modules can be created within each financial
model to forecast financial statement items in
detail. The user can choose from a menu of
standard forecasting methods or create customized
drivers.
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Hyperion Strategic Finance
Reports can be created at varying levels of
detail in each model. Reports can pull Actuals,
Budgets, and Different Forecast data together for
side-by-side comparison.
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Hyperion Strategic Finance
Each double-click unveils an additional layer of
detail.
Report across multiple schools or divisions and
analyze individual drivers for each.
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Hyperion Strategic Finance
Balance Sheet items, such as Endowments, can be
forecast as well. HSF will automatically
generate a Cash Flow Statement based on the
Income Statement and Balance Sheet forecasts.
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Hyperion Strategic Finance
Model components flow back and forth between the
Balance Sheet and Income Statement.
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Hyperion Strategic Finance
The Scenario Manager provides the flexibility to
store multiple sets of assumptions for analysis.
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Hyperion Strategic Finance
Report the results or the financial impact of
each scenario, or any combination of scenarios.
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Whats In It For Us?

• Higher Education strategic planning needs and
  demands are becoming more complex
• But the tools we relied on previously dont
  always adapt well
• FASB and GASB reporting requirements are very
  different from the way institutions really are
  managed
• Buy vs. Build has often times turned into Buy
  and Build
• ERP system implementations like Oracle and SAP
  have to be customized up the wazoo, making
  day-to-day maintenance and upgrades a royal pain
• This model involves configuration only for
  higher education, rather than code rewriting or
  front-end plug-ins
• Hyperions focus is on Business Intelligence
  analysis, modeling, and reporting

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Questions, Discussion, Jokes