• RJ Linehan

Order Out of Chaos in Oracle EPM Cloud

Updated: Jul 27



Management & Regulatory Reporting with Narrative Reporting in Oracle EPM Cloud


Introduction


Today’s Finance Organizations are confronted with significant change in today’s Information Age. This is no more evident than the expectations of senior management to communicate organizational performance in terms of both quantitative and qualitative information. Once it was sufficient for organizations to report value in terms of measurable performance, now it is essential to go beyond the numbers and justify value with commentary and narrative.

Although the need for increased narrative disclosure is apparent, Finance Organizations are challenged with delivering a scalable, efficient solution due to the manual, ad hoc nature of the performance reporting process. The inability to validate numerical results aligned with narrative information for accuracy and continuity stems from the lack of a connected process that fosters analytic capabilities. Eventually, this shortcoming leads to inefficient processes vulnerable to errors in reporting.

Turning the tide necessitates the adoption of a purpose-built solution to support management and regulatory reporting.

Management & Regulatory Reporting Challenges


There are several key challenges organizations face when satisfying today’s management and regulatory reporting needs. These challenges originate from the ongoing evolution of the Information Age. Due to the rapid pace of innovation and change, managing reporting activities using legacy technology or disconnected systems that fragment business processes is not an option. Overcoming such challenges are essential to meet the external demands for reporting transparency and precision from governing bodies and stakeholders.


Information Alignment


Each role in today’s Finance Organization (depicted in Figure 1) requires distinct information to perform its reporting responsibilities. This information is stored and presented to users according to their specific reporting responsibilities. Challenges arise when management and regulatory reporting requires alignment of information across roles. Often, this is a difficult task because a unified platform does not exist to organize and merge the information efficiently. It typically involves a manual exercise to collect, organize, and validate the information. Finally, if time allows, users perform analysis to further validate the alignment of quantitative and qualitative information. Leveraging disparate, legacy systems prevents the Finance Organization from overcoming this challenge.


Figure 1

Inconsistent & Manual Authoring


To deliver an accurate, stylized reporting package normally involves significant effort on the part of the authors: those responsible for creating and publishing reports. These individuals are faced with the challenge of working with disparate tools to produce a unified deliverable. The tools at their disposal often lack the features necessary to perform efficient periodic maintenance, manage version control, and monitor basic access restrictions. They are typically homegrown and require significant manual effort to maintain. Usually, knowledge of how the tools work is concentrated with one or two subject matter experts in finance and/or accounting. This scenario exposes the organization to the risk of losing that knowledge if it is not properly documented or the subject matter experts leave the organization. Without an intuitive, flexible authoring tool, overcoming this challenge is next to impossible.


Regulatory Reporting


With the enactment of such regulations as the Sarbanes- Oxley Act (SOX) in the United States and the International Financial Reporting Standards (IFRS 2005) in Europe, regulatory scrutiny has never been higher. As regulatory authorities demand higher reporting standards and uniform submissions, this challenge is no longer one that can be circumvented. Nowadays, many organizations must adopt a solution that handles output in the following formats to support submissions to the jurisdictions they operate in (i.e. US SEC, IFRS, HMRC, ESMA, EBA, EIOPA, CIPC, and SBR-NL).

  • XBRL

  • iXBRL

  • EDGAR HTML

Collaboration & Workflow


To keep up in the Information Age, Finance Organizations need to collaborate efficiently and modernize their reporting processes with effective workflow that holds users accountable for the role that they play in the reporting cycle. Outdated, siloed methods pose an ongoing challenge to overcome key hurdles such as:

  • Inability of multiple users working towards a common goal to effectively communicate.

  • Absence of a structured review cycle to validate information and report output.

  • Lack of visibility into the progress of the reporting cycle.

Adopting a Unified Reporting Solution


In order for today’s Finance Organizations to confront and overcome their reporting challenges, focus must be placed on easing the user pain points. Authors and reviewers represent the user community responsible for creating, validating, and publishing the reporting output. Consumers are those that access and utilize the reporting output. Both types of users have specific reporting needs and those needs should be recognized when adopting a solution.


Satisfying the Needs of the Reporting Authors and Reviewers


Reporting authors and reviewers require a reporting solution that supports a standardized process and promotes consistent results. It should provide a structured approach to manage the lifecycle of the reporting deliverable, for example:

  • Gathering relevant information for the deliverable.

  • Review the information for accuracy.

  • Present the deliverable to key stakeholders.

The reporting solution should foster collaboration to eliminate duplication of effort and rework while providing visibility into the reporting process. Insights gained from this visibility often can identify opportunities for improvement. Finally, the reporting solution should take advantage of technology to reduce the effort required to align qualitative information with quantitative data.


Satisfying the Needs of the Reporting Consumers


Reporting consumers typically need a reporting tool that delivers concise and correct answers to vital questions now. Contributing feedback and commentary on content in the reporting deliverable is an important feature that is part of the need to align quantitative and qualitative data. A solution that provides reporting output with a consistent look-and-feel is necessary to satisfy today’s dynamic business landscape.

Another key need for the reporting consumer is seamlessly combining a blend of on-premise, cloud, and other data sources and delivered in near real-time. It is a necessity to alter the lifecycle of the reporting deliverable as reporting demands change. The ability to adapt while delivering reliable information is paramount to the reporting consumer.

What is Narrative Reporting?


Oracle Narrative Reporting for Oracle EPM Cloud streamlines the narrative reporting process satisfying the needs of all users: authors, reviewers, and consumers. It provides a secure, collaborative, process-driven approach for defining, authoring, reviewing and publishing financial and management report packages for internal and external stakeholders, as well as a cross-cloud service reporting tool for producing integrated EPM Cloud reporting. [1]


Alignment of Data and Narrative


Oracle Narrative Reporting automates and streamlines management and regulatory reporting by combining data in reusable, user friendly formats and templates. This approach assists with aligning the data with the narrative. Now measurable results are supported by the Who, What, Where, When, Why, and How. In other words, numbers are tied to and supported by key facts, decisions, and results dependent on those numbers. The need to perform manual tasks such as rekeying data entries, formatting reports in Excel, updating the report package for the next reporting cycle is no longer necessary. Alignment brings harmony to the reporting process.


Comprehensive Integration


Oracle Narrative Reporting has the capability to integrate any data source required for the reporting process. Figure 2 illustrates the source options available for integrating with Narrative Reporting. The extensive options for integrating data sources include traditional flat files generated by legacy systems and Oracle On-Premise EPM applications, disparate reporting objects created in Office, and direct integration from Oracle EPM Cloud applications. The simple, business-friendly approach to integration requires no knowledge of coding and easily aligns data from these sources in the format required for reporting deliverables. It also provides a framework for expanding integration and reporting beyond Narrative Reporting. Users can bolt-on reporting elements in phases and introduce incremental adoption across the organization.

Figure 2

Disclosure Management


Disclosure Management in Oracle Narrative Reporting assists with creating and editing the Extensible Business Reporting Language (XBRL) tagged submissions to a regulatory agency (for example, a 10K or 10Q submitted to the SEC). Users can can assemble financial statements, supporting schedules, and commentaries to and deliver the content in XBRL, EDGAR, PDF, or HTML formats. Additionally, Disclosure Management lets customers modify or extend taxonomies before the mapping process, and also use multiple taxonomies. The key purpose of the product is to centralize and manage the critical documents needed in the close cycle to significantly reduce the risk of an inaccurate disclosure. This feature is provided to licensed users of Disclosure Management for Narrative Reporting which is an optional licensed feature for Narrative Reporting.

Disclosure Management offers a complete XBRL creation and management solution with the following functionality:

  • Easy drag-and-drop tagging of XBRL mapping in Microsoft Office using Oracle Smart View for Office.

  • Extensive management of XBRL taxonomies allowing organizations to customize filings for their specific needs. XBRL taxonomies provide the definitions and relationships about business and financial facts reflected in the XBRL documents. Updates to taxonomies can be applied to existing mappings of these facts.

  • Document publication to the following formats: EDGAR HTML, XBRL, Microsoft Word, and PDF.

Reporting Securely and Effectively


Overseeing performance and management reporting processes proves difficult in the Information Age as organizations grow, become more complex, and more people are involved in the process. With numerous individuals across different business units and departments contributing content to varying reports, the ability to manage the process proves difficult. It is critical that reporting tools deliver secure collaboration features which will have a significant impact on the speed and effectiveness of the reporting process.

Oracle Narrative Reporting offers users instant visibility into the progress and status of the reporting cycle. It efficiently navigates knowledge workers through the process ensuring they have the right information at the right time to complete tasks based on the role they are assigned. With security to handle sensitive content at all levels, from network to storage, organizations can be assured that the most important and confidential data is only visible to authorized users.

Conclusion


The goal for organizations looking to improve management and regulatory reporting processes is to bring order to chaos. Organizations need to move away from disconnected solutions that expose it to risk and force necessary customizations that are both expensive and difficult to manage. Organizations require connected, secure, and complete solutions that outpace change. That his never truer when it comes to reporting the true value of an organization it terms of both data and narrative. Adopting a tool like Oracle Narrative Reporting, organizations receive a comprehensive enterprise solution on a common platform that addresses those reporting needs for the user.

About the Authors


RJ Linehan

RJ is a founding partner of Innovus Partners. He is an EPM/BI/Data Warehouse Specialist with over twenty years of consulting experience.


Thomas Simkiss, Jr., J.D., CPA

Thomas has over 22 years’ industry and consulting experience in the areas of Finance and Information Technology dealing with small and medium sized businesses, as well as Fortune 1000.


[1] Narrative Reporting in Oracle EPM Cloud, 2019. https://www.oracle.com/a/ocom/docs/applications/epm/oracle-narrative-reporting-ds.pdf

#oracleepm #epmcloud #narrativereporting #epmreporting #epm

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