Challenge

  • Discontinued Operations was completed using a complex, hybrid HFM/Excel model. This model was cumbersome, error prone and nearly impossible to derive without extensive person hours. Currency and intercompany complicated deriving historic collapsing.
  • The requirement was to automate DiscOps via HFM leveraging metadata and data fields as triggers and completely eliminate the Excel model.

Technical Solution

  • The discontinued operations rules leverage metadata elements that drive the behavior of how discontinued operation entities are treated. As a result, the business rules run under conditions and do not have to be changed as an entity goes to a discontinued status or goes through the phases of discontinued operations.
  • Held for Sale: The “H” Rule, developed to collapse Assets, Liabilities, Revenues, and Expenses and move balances to Assets / Liabilities / Earnings / Taxes of Discontinued Operations Account Lines. This is used if entities are defined as a Discontinued Operation, but not yet sold and ledgers continue to be loaded into HFM. All intercompany accounts are excluded from this business rule calculation.
  • Sold: The “S” Rule is utilized when an entity is officially sold. The period in which the entity is sold, the rule collapses Assets / Liabilities and moves them to specified Retained Earnings Accounts (i.e. RE – Net Assets from Disc Ops & CTA from DiscOps). The P&L is collapsed and moved to Earnings / Taxes of Discontinued Operations accounts.  For History (all periods prior to month of sale), the Assets / Liabilities / Earnings / Taxes follow the logic of the “H” rule defined above.  The rule will carry-forward and collapse all P&L accounts as of the defined period of sale to prevent potential CTA calculations from occurring.
  • “DiscOp”: The first 6 characters of a Discontinued Operations Entities’ UD1 needs to be “DiscOp”. This tells HFM to begin executing discops business rules. If there is no “DiscOp” in the UD1 then the discops business rules are ignored.
  • Year: The second 4 characters of a Discontinued Operations Entities’ UD1 needs to be the year in which the entity is discontinued from operations. There are specific business rules that run if the UD1 Year and the current year are the same.
  • Period: The third 3 characters of a Discontinued Operations Entities’ UD1 needs to be the month in which the entity is discontinued from operations (within the current year, see year above). There are specific business rules that run if the UD1 Period and the current period are the same and if the current month is greater than the UD1 Period.
  • Discontinued Stage: The last character of a Discontinued Operations Entities’ UD1 needs to be the discontinued stage in which that entity is in. This is important, as there are specific rules for each stage of a discontinued operations entity.

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The solution has been running in production since 2014

Benefits

  • Discontinued Operations within HFM are aligned with business requirements
  • Discontinued Operations methodology is scalable and runs leveraging business rules without manual intervention
  • Historic discontinued reporting is seamless and no manual intervention is needed
  • Business rules are stage-based with indicators that are controlled by business

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