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Eskom keeps its future secure with Hyperion Strategic Finance

“With HSF, many business units can now run various future scenarios, altering specific variables in their models (such as the value of the rand, interest or CPI rates, or return on assets) to determine optimal strategies over a number of years," says Calib Cassim, senior analyst in Eskom's RFP department.

Eskom has used Hyperion Strategic Finance (HSF) as its modelling and financial planning tool in its Regulation and Financial Planning department (RFP) for the past four years. HSF is a financial modelling and forecasting package supplied and implemented by local Hyperion distributor, Futuresense. The product is a critical aspect of Eskom's drive to mitigate risk in its RFP function.

Eskom was established as the official electricity supplier to South Africa almost 100 years ago. Today, keeping the country supplied with electricity on a 24x7 basis, as well as servicing some neighbouring states while trying to meet a social mandate of rolling out electricity to millions of people who have never before enjoyed the service, keeps Eskom on its toes. Moreover, its responsibilities over the next few years will increase as it continues its rollout and begins the mammoth task of upgrading and replacing existing power stations.

The work we have planned for the next few years will cost Eskom tens of billions of rand every year," says Calib Cassim, senior analyst in Eskom's RFP department.

Xhead = Spreadsheets do not make the grade

Eskom initially made use of spreadsheets for planning processes - these carried their own risks. As can be expected from a company the size of Eskom, these spreadsheets quickly grew so large, cumbersome and complex that relying on the results produced was itself a risk.

The company then turned to HSF. Together with Futuresense, Eskom built the HSF models the electricity provider needs to assist it in its financial planning process.

"Eskom's business units therefore need to be able to see into the future. With HSF, many business units can now run various future scenarios, altering specific variables in their interest or CPI rates, or return on assets to determine optimal strategies over a number of years."

Cassim says each business unit is a building block; all blocks need to fit together in the complete corporate model and collectively achieve the holding company's objectives.

"Executives need to view the consolidated picture and have the ability to drill down into areas of concern. HSF provides the functionality to drill down on any figure or finding in a report and find out where it comes from. If necessary, the application allows users to follow the audit trail down to the raw data."

Xhead = Simplified data management

HSF also puts Eskom in charge of its own data. Once the models have been created, it is a fairly simple matter to find and analyse any information. When using a spreadsheet for planning, there were multiple sheets that needed to be taken into consideration when analysing specific criteria. HSF presents users with a single interface from where they can manage everything.

The data, formulae and models used are all the same to ensure consistency throughout the vast Eskom organisation.

Xhead = Clinching the deal

When Eskom reports its financial plans to the company's governance structures, HSF provides it with the confidence it needs to support its arguments. Should someone be opposed to a certain pricing increase, for example, the team can simply present future scenarios modelled on various price increases in comparison with the CPI index. The HSF reports will show in detail what the probable results will be.

Xhead = Expanding use

HSF makes importing information from various applications, in various formats, a simple and accurate process, speeding the consolidation and reporting process considerably.

In summing up the main benefits HSF has delivered, Cassim says the fact that the system uses one data source for everyone, as well as the same formulae, makes it more reliable than any other solution he has used in the past. In addition, reports can be customised to include any information required without requiring the user to have a technical degree. And the analytical process models, such as the value of the rand, is also simple.

Finally, the power of HSF comes to the fore in two other areas as well. First is its ability to consolidate data accurately and faster than any other system; and second is the facility to drill down to the raw data (if necessary) to determine how a number was derived, with only a few clicks of the mouse.

With HSF, Eskom can present its financial planning with much more confidence.

Futuresense

Futuresense

Futuresense is an Oracle partner in South Africa that specialises in Oracle Hyperion and BI performance management solutions to enable faster reporting and better decision-making within a company. With the combination of specialised software from Oracle, a vast range of highly valued skills and years of experience in the South African business environment, Futuresense delivers an effective and efficient enterprise financial planning and modelling solution, sets up controlled budgeting and planning environments, and efficiently implements group reporting functions, including consolidations. Web site: www.futuresensesolutions.co.za