Financial KPIs are used to create user defined KPIs for direct analysis and reporting, based on the Income Statement (IS) and/or the Balance Sheet (BS) in IFS Applications General Ledger or in IFS Group Consolidation. The definition and set-up is made in KPI Services based on accounting structures in IFS Financials. The KPIs will appear as individual measures in a selected finance OLAP cube and can be directly used in interactive analysis scenarios or in creating dashboards. The General Ledger and the Group Consolidation OLAP cubes are both supported. The OLAP cubes are a part of the IFS Analysis Models.
With the Financial KPI concept it is possible for an IFS Applications user to configure and define a set of KPIs, with free naming, based on elements in the IS and/or BS. Each KPI is based on an arithmetic expression where one or several Income Statements or Balance Sheet elements can be used to calculate the specific KPI value.
The elements in the IS and BS are represented by nodes in two pre-selected accounting structures. One for the IS and one for the BS. These accounting structures should be the same accounting structures that are used to configure the IS and BS hierarchies in each OLAP Cube respectively. E.g. a KPI for Net Sales can be created by referring directly to a node in the IS accounting structure. Alternatively, Net Sales can be created by adding up individual nodes on a lower level. A KPI for Operating Margin can be created by dividing nodes for Net Profit and Net Sales. A KPI for Return on Equity can be created by dividing the node for Profit/Loss in the IS Structure with the node for Shareholders Equity from the BS structure.
Most available measures in the OLAP cubes can in practice be used as a base for KPI calculations. Both actuals and budget/forecast values can be used. Using the measures in measure group GL Analysis or Consolidation Analysis is extra powerful with the availability of a large number of predefined measures, such as YTD, R12 previous year etc., in combination with that these measures are also based on configurable balance sets. This combination simplifies the access to budget/forecast values and allow dress up of full year values to handle year end targets.
In the General Ledger OLAP cube it is possible to do multi company analysis for companies within a defined company group. Company groups for this purpose are defined in KPI Services. The prerequisite is that all the companies within a specific company group use the same node structure with common node names for both IS and BS. The chart of account can be different however. In a multi company analysis, all the balances from the included companies are added. Intercompany transactions and balances are not eliminated leading to that, depending on how KPIs are defined, there can be an effect of inflated KPI values depending on intercompany transactions. If included companies have different accounting currencies the measures for reporting currency can be used. Note however that both IS and BS amounts are recalculated with the same currency rates. Multi company analysis is in practice only useful for a subset of defined KPIs.
The Group Consolidation OLAP cube is by nature supporting multi company analysis by relating to relevant consolidation nodes in a consolidation structure. For technical reasons a single company group must however be defined and this group should only include the Master Company for Group Consolidation.
OLAP (On-Line-Analytical-Processing) cubes is a way to deliver high performance analytical capabilities using a star schema model with measures and dimensions. The pre-packaged OLAP cubes in IFS offering are available in the Analysis Models component. The OLAP cubes are powered by Microsoft BI in Microsoft SQL Server.
A cube Measure is a measure in the OLAP cube that delivers information. In the General Ledger cube, this will typically be amounts, differences. A cube measure can be used for interactive analysis directly in Excel or be used in dashboards in different BI tools, e.g. Power BI. Cube measures are organized in measure groups.
A Financial KPI is a KPI measure that is calculated based on elements from the IS and/or BS. Calculations can be defined using arithmetic expressions with operators such as "+" (plus), "-" (minus), "*" (multiply) , "/" (divide) and also use fixed factors. A Financial KPI can be published in a selected finance cube (currently the General Ledger cube or the Group Consolidation cube) and will appear as a cube measure in a user defined measure group.
A KPI Element defines an element that can be used in an arithmetic expression for calculating a Financial KPI. The source for the calculation is an existing measure in a measure group in the OLAP cube combined with a structure node or leaf. The measure is sliced by the structure node/leaf in the relevant dimension. In the KPI element definition for the General Ledger OLAP cube it is important to use the structure dimension for Company Group in order to support different structures in different companies or company groups. E.g. ACC STRUCT IS CG were CG stands for Company Group. Measures based on configurable balance sets are particularly powerful to use since there is a large number of calculated measures available, e.g. measures for YTD, Rolling 12 and previous year, which can produce full year values for actuals, targets and forecasts.
KPI Company Groups are used to create groups of companies where you use the same follow-up structure, i.e. the same structure in the Income Statement (IS) and Balance Sheet (BS). This means that the nodes and the names in the IS and BS structures respectively, need to be the same for all companies in the group. There can however be different charts of account in different companies. In the simplest case, all companies have the same structure and thus only one company group is needed. In the most extreme case all companies have different structures and it is necessary to have separate company groups for each individual company. For Group Consolidation only one company group for the Group Consolidation Master Company is required to define the KPI elements and KPIs.
Before creating a set-up in KPI services for Financial KPIs there are some prerequisites that need to be fulfilled:
When creating set-up in KPI Services use the following sequence:
There are a few things to be aware of when setting names to KPIs.
The user defined KPIs will appear as calculated measures in the cube in
parallel with all the pre-defined measures, although they can be organized in
one or several user defined measure group folders.
Each measure in an OLAP
cube needs to have a unique name. This also implies that each KPI name in the
cube needs to be unique. This requirement can become an issue in multi company
scenarios where there are different accounting structures and chart of accounts
in different companies. In this case companies with common definitions need to
be grouped in company groups. KPIs are then defined for each company group. This
means that the "same" KPI, e.g. Net Margin, needs to be defined for each company
group, using the accounting structure relevant for each particular company
group.
The KPI name can be the same in the KPI services definitions. Each
KPI will, when entered in the KPI Definition, automatically get a suggested
measure name based on the KPI identity and the suffix defined on the referenced
Company Group. This ensures that each measure name in the cube will be unique.
The suffix definition, see KPI Company Group, needs however to be defined
and to be unique for each company group. On top of this, KPIs for different
company groups can be organized in different measure groups in the cube.
Values for actuals and targets are represented as separate KPIs with different set-up and reference to different base measures in the cube, normally to actual and budget measures. To simplify use it is recommended to use some kind of naming convention, e.g. NETMAR for the actual value and NETMAR-T or NETMAR-TAR for the target value.
KPI measure values can be viewed using Excel, SSRS (SQL Server Reporting Services), Power BI or IFS Lobby connected to the relevant OLAP cube. It is also possible to use other 3rd party tools. When using base measures in the KPI calculation that use cube time intelligence, it is important to view values using a time dimension hierarchy in the cube dimension Reporting Date. This dimension supports time intelligence. Cube measures using time intelligence are all measures ending with: OB, PY, YTD and R12, i.e. measures for opening balances, previous year, year-to-date and rolling 12. Unless a hierarchy, or elements from a hierarchy, from the above time dimension is used, no values will be displayed.