Financial KPIs

Financial KPIs is an integrated part of IFS Applications BI offering. 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. Currently the General Ledger OLAP Cube is supported. The OLAP cubes are a part of the BI Analysis Package.

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 Income Statement (IS) and/or Balance Sheet (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 the General Ledger OLAP Cube. 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 diving 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 General Ledger OLAP cube 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 is extra powerful with the availability of a large number of predefined measures, such as YTD, R12 previous year etc. These measures are also based on configurable balance sets, which simplifies the access to budget/forecast values and allow dress up of full year values to handle year end targets.

With the definitions in KPI Services it is possible to create company groups. This makes it possible to do multi company analysis within a selected company group. The prerequisite is that all the companies within the 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.

Terminology and General Definitions

OLAP Cube

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 BI offering are available in the BI Analysis Package and are powered by Microsoft BI in Microsoft SQL Server.

Cube Measure

A Cube Measure is a measure in the OLAP Cube that delivers information. In the General Ledger cube this will typically be amounts, difference % or quantity. A cube measure can be used for interactive analysis directly in Excel or be used in dashboards in different BI tools. Cube measures are organized in measure groups.

Financial KPI

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) and will appear as a cube measure in a user defined measure group.

KPI Element

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 the OLAP cube. This source measure can be a balance directly from GL Balance or a Budget Version. The measure can also be a measure based on configurable balance sets. There are a number of calculated measures in the General Ledger cube for opening balances, YTD, Rolling 12 and previous year that can be used.

KPI Company Group

KPI Company Groups can be 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 need to be the same. 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.

General Set-Up

Before creating 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:

  1. Define server connection to the MS SQL Server installation in Connection Settings
  2. Some forms have connections directly to the OLAP cube for list of values and validation and publication of KPIs. This requires an installation on the local client machine of two separate feature packs for SQL Server access, AMOMD and AMO. These can be found by clicking "Add-ons" on the home page of current IFS Applications instance.
  3. Define company groups in KPI Company Groups for the companies that have the same follow-up structure
  4. OLAP Cube Set-up: Define available measures and company groups in the OLAP Cube.
  5. Define the KPI Elements to be used in the KPI calculations
  6. Define the KPIs and KPI calculations in KPI Definition.
  7. Validate KPIs to make sure all definitions are correct
  8. Publish KPIs to the OLAP Cube
  9. Measures are now available in OLAP Cube for use.

KPI Naming

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 unique name. This also implies that each KPI name in the cube needs to be unique. This fact 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.

Viewing KPI Values

KPI measure values can be viewed using Excel 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. If the above time dimension is not used no values will be displayed.