HFM/FDMEE have been successfully replacing spreadsheets to achieve efficiency and accuracy during month end close. It is rarely discussed that HFM/FDMEE have also successfully replaced other systems used for consolidation and reporting.
In one of our recent implementations, our client previously acquired a large group of companies based in Asia Pacific which had been using TM1 as consolidation and reporting tool. Our client have previously implemented HFM and would like to incorporate its APAC operations into its HFM application.
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The APAC operations was reluctant to “replace” TM1 with HFM since TM1 have been serving their statutorial and managerial reporting needs. They have been submitting their consolidated financial statements by Business Units which our client load into their HFM application the past 12 months. In addition, TM1 had more detailed breakdown of their revenue and expenses compared with the dimensions defined in the HFM application. At major entity hierarchies, TM1 had adjustment entities where they posted their eliminations, purchase accounting journals, GAAP, and corporate adjustments.
Our client decided that APAC should load the unconsolidated financial statements by Entity and by Business Units. This would give visibility of detailed financial statements of all APAC Entities replacing the summarized consolidated data they have been loading into HFM. Appropriate changes would also include:
- Eliminations would occur at the first common parent.
- Purchase accounting, GAAP and corporate adjustments would be posted on the actual entity instead of an adjustment entity designated for each major group of companies. The HFM application has a dimension that segregates results of financial operations from various adjustments.
- Users are able to create financial reports without the assistance of the BI team.
The APAC group warmed up to the HFM application during data validation. They easily learned how to use SmartView for data validation where they smoothly traced data from TM1 to HFM. They also quickly adapted to the dimensions in HFM application where they came up with ideas on how to use HFM dimensions to simplify their reporting needs. For example, they created sub division groupings within the Division custom dimension where they could efficiently create reports at various divisional levels. Business Unit hierarchy was also expanded to allow more detailed visibility of Business Unit groupings.
APAC’s financial reporting needs were met by simulating consolidation functions in TM1. But the appropriate tool for consolidation and management reporting is HFM. As always, using the appropriate tool will yield better results.