Leveraging KPIs in Financials

Before you begin

This 30-minute hands-on tutorial shows you how to leverage KPIs in Financials by using out-of-the-box KPIs or adding your own. The sections build on each other and should be completed sequentially.

Background

Also known as metrics and measures, key performance indicators (KPIs) enable you to collect objective, quantifiable data or data that indicates progress toward a performance or strategy target. High-level KPIs may focus on the overall performance of the organization, while low-level KPIs may focus on processes within departments such as sales, marketing, HR, support and so on.

You can use KPIs to reflect the health of key areas (perspectives), in your organization. For example, a KPI that tracks the return on assets for an organization in the banking industry provides financial data and should be associated with the financial perspective.

With out-of-the-box KPIs, accounts, and drivers, Financials accelerates your planning process. You can also define custom drivers and KPIs, and bring in your own chart of accounts in Financials.

What do you need?

An EPM Cloud Service instance allows you to deploy and use one of the supported business processes. To deploy another business process, you must request another EPM Enterprise Cloud Service instance or remove the current business process.

• Have Service Administrator access to EPM Enterprise Cloud Service. The instance should not have a business process created.
• Upload and import this snapshot into your Planning instance.
  

  For more information on uploading and importing migration snapshots, refer to the Administering Migration for Oracle Enterprise Performance Management Cloud documentation.

• Save this data file locally. You will be importing data using this data file.

Key performance indicators in Financials

Here are the predefined KPIs when you enable parent key members:

Revenue KPIs

Expense KPIs

Income Statement

Balance Sheet

Cash Flow

Setting up the foundation for your plans and forecasts

In this section, you review the enabled features and time frame granularity, set values for user variables, and view data in Financials.

Reviewing enabled features

In Enable Features, you select which parent key members, accounts, and drivers you want to enable for your Financials business process, as well as add and map custom dimensions. Based on your selections, dimensions, drivers, forms, accounts, and KPIs are created.

You must define all custom dimensions the first time you enable features. You can’t define these later.

1. On the Planning home page, click Application then Configure.

   

2. From the Configure drop-down, select Financials.

   

3. Click Enable Features.

   

   Revenue and Expense planning is enabled. Expenses are configured so that you can plan with drivers and related accounts.

   

4. Scroll down.

   Income Statement, Balance Sheet and Cash Flow are configured. Currently, rolling forecast and weekly planning are not configured.

   

5. Scroll down.

   Existing and custom dimensions are displayed. Product dimension is enabled for Revenue and the Services dimension is enabled for Expense. Cost Center is enabled for Expense. Channel is enabled for both Revenue and Expense. Funding Segment is enabled for Balance Sheet and Cash Flow.

   

6. Click Close.

You can’t disable features later.

Reviewing time periods and granularity

In Planning and Forecast Preparation, you select the current fiscal year, period (month), and plan start year to control the beginning and end duration of your scenarios. You also set the period granularity for the Plan, Forecast, and Rolling Forecast (if enabled) scenarios in your business process.

1. In Configure: Financials, click Planning and Forecast Preparation.

   

   Notice that Current Fiscal Year is FY20, the Period is January, and the Plan Start Year is set to Next Fiscal Year.

   

2. Click Forecast.

   

   The Forecast starts in February FY20 and runs through December of FY21. The two year forecast is set on a monthly basis.

   

3. Click Plan.

   

   The four year Plan which runs from January FY21 through December of FY24, and has each year's data planned on a monthly basis.

   

4. Click Close.

   

Selecting values for user variables

User Variables were added when the business process was created. User variables act as filters in forms, enabling planners to focus only on certain members. In this section, you set values for users values.

1. Click (Navigator), and under Tools, click User Preferences.

   

2. Under Preferences, click User Variables.

   

3. For each variable, click its (Member Selector) to select a member as the variable's value:
   • Currency: USD
   • Entity: "1 US"
   • Reporting Currency: USD
   • Scenario: OEP_Plan
   • Version: OEP_Working
   • Years: FY21
   • Expense Account: OFS_Operating Expenses
   • Expense Drivers: OFS_Travel and Entertainment Expense Drivers
4. Verify your selections, and click Save.

   

5. At the information message, click OK.

   

Managing KPIs

In this section, you manage KPIs in the dimension hierarchy and the Configure: Financials page.

Verifying enabled KPIs

Out-of-the-box KPIs are enabled based on the features selected on the Enable Features page of Financials.

1. Click (Navigator), and under Application, click Configure.

   

2. From the Configure drop-down, select Financials.

   Depending on the features you enabled, subcomponent accounts are listed on this page. In this example, Revenue Accounts, Expense Accounts, Balance Sheet Accounts, and Cash Flow Accounts were enabled.

   

3. In Configure: Financials, click Revenue Accounts.
4. From the Category dropdown list, select Revenue KPIs.

   The enabled Revenue KPIs are displayed.

   

   If the KPI has a member formula, you can view it here.
5. For OFS_COS to Revenue%, click (Member Formula).

   You can view, add, edit, and validate the KPI member formula here.

   

6. Click Cancel.


7. From the Category dropdown list, select Income Statement KPIs.

   Income statement-related revenue KPIs are displayed.

   

8. Click Close.
9. Repeat steps 3 to 7 to view KPIs for other subcomponents.

Reviewing KPIs in the hierarchy

KPIs are stored as account members in the dimension hierarchy.

1. Click (Navigator), and under Application, click Overview.

   

2. Click Dimensions.

   

3. From the Cube dropdown list, select OEP_FS.

   

4. Click Account.

   

5. In Edit Member Properties: Account, click (Zoom in All Levels) to expand all levels in the hierarchy.
6. Scroll down and locate the following members:
   • OFS_Revenue KPIs

     

   • OFS_Expense KPIs

     

   • OFS_Income Statement KPIs

     

   • OFS_Balance Sheet KPIs

     

   • OFS_Cash Flow KPIs

     

Adding KPIs to the alternate hierarchy

You can bring in your own KPIs in the same way you load your own chart of accounts. Predefined accounts, drivers, KPIs, and the chart of accounts you bring in can coexist in Financials.

In this section, you review the chart of accounts previously loaded under parent key members. You will add imported accounts as shared members under existing KPI parent members to make sure that the added accounts are included in the Income Statement.

Learn more on how to bring in your own chart of accounts from these tutorials:

• Configuring Financials to Bring In Your Own Chart of Accounts in Planning
• Leveraging Best Practice Planning in Financials using your Chart of Accounts

Learn how to add and edit dimensions and members in the Simplified Dimension Editor by stepping through the Managing Dimensions in Planning hands-on tutorial.

1. In the grid, under OFS_Financials Accounts, then OFS_Revenue Planning, select OFS_Gross Profit.

   The following revenue accounts were previously added to the hierarchy.

   

   

2. In the grid, under OFS_Financials Accounts, then OFS_Expense Planning, select OFS_Total Expenses.

   The following expense accounts were previously added to the hierarchy.

   

3. Add the account members as KPIs. In the grid, under OFS_Financials Accounts, then OFS_Revenue Planning, then OFS_Revenue KPIs, select OFS_Total Revenue.
4. Click Actions and select Add Child.

   

5. In the Add Child dialog box, enter 2 and click Apply.

   

   Yellow colored cells are added under OFS_Total Revenue.

   

6. Edit the Member Name for the added yellow cells under OFS_Total Revenue to:
   • Product Income
   • Other Income
7. For both members, set the Default Data Storage to Shared.
8. Click Save.

   The members are temporarily added to the hierarchy.

   

9. In the grid, under OFS_Financials Accounts, then OFS_Revenue Planning, then OFS_Revenue KPIs, select OFS_Total Cost of Sales.
10. Click Actions and select Add Child.
11. In the Add Child dialog box, accept the default value (1) and click Apply.
12. Edit the Member Name for the added yellow cell under OFS_Total Cost of Sales to COGS.
13. Set the Default Data Storage to Shared.
14. Click Save.

    The member is temporarily added to the hierarchy.

    

    To commit changes, you must refresh the database.

15. Click (Refresh Database).
16. In the Refresh Database dialog box, accept the default selections, and click Refresh Database.

    

    It is recommended that Enable Use of the Application is set to Administrators, before and after refreshing the database, until Financials is completely configured and ready for production.

17. At the Refresh Database prompt, click Refresh.

    

    The Cube Refresh/Create in Progress status is displayed.

    

18. When the status displays as Succeeded and the percent complete is 100%, click Finish.

    

19. Click Close.
20. Click Cancel.

Adding KPIs in Configure: Financials

You add and edit KPIs in the same way you add or edit accounts and drivers.

Check that your KPI member aliases and names don’t conflict with those of the provided KPIs.

1. Click (Navigator), and under Application, click Configure.
2. From the Configure drop-down, select Financials.
3. In Configure: Financials, click Revenue Accounts.
4. From the Category dropdown list, select Revenue KPIs.

   Notice that Product Income, Other Income, and COGS are now displayed, replacing OFS_Total Revenue, and OFS_Total Cost of Sales. In the hierarchy, OFS Total Revenue and OFS_Total Cost of Sales are still under OFS_Revenue KPIs but considered as parents. Level zero (0) KPIs are listed on this page.

   

5. Click Actions and select Add.

   

   To add a small number of KPIs, select Add from the Actions menu. To add a group of KPIs, export the set of predefined KPIs , and then modify the export file in Excel. Then, import the modified file.

6. Enter details in the new row:
   • Name: Repurchased
   • Time Balance: Flow
   • Data Storage: Store
   • Data Type: Non Currency
7. Click Save.
8. Click OK.
9. Click Close.
10. Refresh the database. In Configure: Financials, click Actions and select Refresh Database.
11. In Refresh Database, click Create.

    

12. For both Before Refresh Database and After Refresh Database—Enable Use of the Application for, select Administrators.
13. Click Refresh Database.
14. At the prompt, click Refresh.
15. When the status displays as Succeeded and the percent complete is 100%, click Finish.
16. Click Close.
17. In Refresh Database, click Close.

Viewing KPIs in dashboards and forms

In this section, you load revenue data, plan using trends, run calculations, and view revenue data and KPIs.

Loading revenue data

At the beginning of your planning cycle, you might load data for a given scenario, version, and period. To stay up to date with changes or current data, you can plan for an incremental data load process.

1. Click (Navigator), and under Application, click Overview.
2. Click Actions, and select Import Data.

   

3. In Import Data, click Create.

   

4. Keep all the default selections, and click Choose File to select a file.

   

   Depending on your browser, the button label may display Choose File or Browse.

5. Locate and select Revenue_Data FY19_FY20_FY21.csv, and click Open.

   

6. Click Import.

   

7. At the information dialog, click OK.

   

8. Click Close twice.
9. Click Jobs.

   

10. Verify that the job completed successfully.

    

11. Go to the Planning home page. Click (Home).

Calculating actuals and preparing plans

In this section, you run calculation rules to make sure your data is up to date and aggregated.

1. On the Planning home page, click Rules.

   

   The Rules page lists predefined calculations in Financials.

   

2. Calculate drivers and aggregates data in Actuals. For Calculate Actuals, click (Launch).
3. For each item in the dialog box, click its (Member Selector) to select a member as its value:
   • Entity: "1 US"
   • Periods: ILvl0Descendants(YearTotal)
   • Select Years: FY19,FY20,FY21

   

4. Click Launch.
5. At the prompt, click OK.

   

6. Aggregate data to update reports or analyze data at various levels of the business hierarchy. For Rollup, click (Launch).

   

7. For each item in the dialog box, click its (Member Selector) to select a member as its value:

   Change the value of the Scenario dimension first.

   • Scenario: OEP_Actual
   • Select Years: FY19,FY20
   • Currency: USD

   

8. Click Launch.
9. Click OK.

   

10. Calculate plans based on the trends and drivers set up in Financials. For Prepare Plan, click (Launch).
11. For each item in the dialog box, click its (Member Selector) to select a member as its value:
    • Entity: "1 US"
    • Currency: USD
    • Years: FY19,FY20,FY21

    

12. Click Launch.
13. Click OK.

    

14. Go to the Planning home page. Click (Home).

Entering and viewing plan data

After loading data, you can start preparing plans that can be executed on a calendar based on your organization requirements.

1. Click Financials, then Revenue.

   

2. In the left, click the (Income Statement) tab.

   The Income Statement tab includes data from the Actual and Plan scenarios. The accounts displayed are from the chart of accounts that was previously loaded.

   

3. In the left, click the (Driver and Trend Based) tab.

   The Revenue Trends chart is displayed.

   

4. Click the Trend Based Revenue Planning tab.

   

   When you start planning using the enabled and loaded accounts, KPIs are calculated based on built-in calculations or member formulas you added. You can then analyze data and run reports that include these KPIs.

5. Modify the POV selections based on the following, and click (Go):

   

6. For Product Income Existing Products Key Customers, in Trend Assumptions, select Current Year Actual Average.
7. For Product Income Existing Products Key Customers, in %Increase/(Decrease), enter 8%.
8. For Product Income Existing Products Other Customers, in Trend Assumptions, select Current Year Actual Average, and for Product Income Existing Products Other Customers, in %Increase/(Decrease), enter 10%.
9. For Material Cost, in Trend Assumptions, select Current Year Actual Average, and in %Increase/(Decrease), enter 8%.
10. For Stock Adjustments Net, in Trend Assumptions, select Current Year Actual Average, and for Stock Adjustments Net, in %Increase/(Decrease), enter 4%.

    

11. Click Save.
12. At the Information message, click OK.

    

    Data is calculated and updated on the form. Note that COGS and Product Income were added as KPIs.

    

13. Click the Total Revenue - Plan horizontal tab.

    

14. In the POV, change the selection for Product to All Product, and click (Go).

    

    The form displays no valid rows of data.

    

15. In Total Revenue - Plan, click Actions and select Business Rules.
16. In the Business Rules prompt, click Rollup.

    

17. In the Rollup prompt, verify the default selections for Entity, Scenario, and Version:
    • Entity: "OEP_Total Entity"
    • Scenario: OEP_Plan
    • Version: OEP_Working

    

18. For Years and Currency, click its (Member Selector) to select a member as its value:
    • Select Years: FY21
    • Currency: USD

    

19. Click Launch.
20. Click OK.

    

    Data was rolled up in the hierarchy and is now displayed on the form.

    

21. In the left, click (Overview).

    The Revenue Overview dashboard displays Actual and Plan data. To include updated data, including KPIs, you must run calculations for Forecast.

    

Rolling up forecast data and viewing the updated dashboard

With forecasting, you can budget using past and present data, and analyze trends using assumptions. Forecasts can help your management teams anticipate results based on past information, while allowing to be adjusted when new information is available. You can also prepare forecasts that mimic real, flexible business cycles.

Forecast data was imported when you loaded revenue data. To learn how to prepare forecast data, visit docs.oracle.com, and refer to the Calculating Actuals, and Preparing Plans and Forecasts in Financials hands-on tutorial.

After running calculation rules for the forecast scenario, you view KPIs in the Revenue dashboard.

1. In the left, click the  (Driver and Trend Based) tab.
2. Click the Total Revenue - Forecast horizontal tab.

   

   Total Revenue - Forecast displays data for Actual and Plan scenarios. To include updated Forecast scenario data, run the Rollup business rule..

   

3. Click Actions and select Business Rules.

   

4. In Business Rules, click Rollup.

   

5. For each item in the dialog box, click its (Member Selector) to select a member as its value:

   Change the value of the Scenario dimension first.

   • Scenario: OEP_Forecast
   • Select Years: FY20,FY21
   • Currency: USD

   

6. Click Launch.
7. Click OK.

   Data for Actuals, Plan, and Forecast are now displayed.

   

8. In the left, click (Overview).

   The Revenue Overview dashboard now displays Actual, Plan, and Forecast data. The dashboard also displays key performance indicators for revenue.