Analytical Insights for Cost Center Managers

[thomas_meder]

In analytics, release 1811 brought several innovations, that I will use to demonstrate how a cost center manager gets all necessary information to keep control of his budget on one single page.

To read more about new KPIs we have just delivered, please read on here.

How to create a cost center manager dashboard?

Business requirement

Let's assume a cost center manager of the financial department. Most important aspects on budget is about travel and externals like auditors or temporary staff. It receives depreciation for the office building and is distributing this and its services to others.

Let’s assume one screen, a dashboard, where he or she can get an immediate overview on events at his cost center or if everything is on track. I’d like to draft how this can be achieved, covering these aspects:

• Actuals for budget consumption.


• Focus on budget consumption for specific cost types: travel cost and external cost.


• Upcoming cost not yet shown at the cost center, such as purchase orders.

To achieve this, I will also use some new features that have been delivered with the last release. My colleague Stefan explains the 1811 additions to Analytics here.

• A dashboard. This is the pane holding the analytical assets.


• Key Performance Indicators (KPI) and KPI Variants. The latter ones are a perfect fit of what we want to achieve. At first, I’ll define a KPI “budget consumption”, which holds the key figure “Actual + Forecast” from a standard report. But I won’t add this to the dashboard, it’s rather a kind of template which allows me to create more specific insights, called KPI variants. Such is a KPI with an additional filter, e.g. my KPI “budget consumption”, but only applied to G/L Account (Origin) “Travel Expense”, “Audit Cost”, or others. The available filters are defined at the level of the KPI, which changes the type to “KPI (filterable)” and allows to create a KPI of type “KPI variant” on top of it, which is nothing else than an application of the filter with specific values. You’ll see this below.


• I will also add an embedded report.

For those who have a reference system available, I’ve created the dashboard using two user roles:

• ADMINISTRATION01, administrator and key user analytics


• FINANCIAL01, manager accounting and HR department.

Assumptions

The example will use a cost center report with forecast. The forecast is today using encumbrance calculation. This needs to be scoped and set-up to get purchase orders in process as a forecast.

Additionally, it is assumed that the CC manager has access to Work Center Insights, work center view Manage Dashboards. If not already done, an administrator needs to adjust his/her user in work center Application and User Management, work center view Business Users.

Step-by-Step guide

Step 1: Adapt the base report

All these steps are to be executed as Key User Analytics.

Step	What to do
1.1	In this step, we are reducing the size of the report. In work center view Design Reports, open report Cost Centers - Plan/Actual/Forecast to create a new view at first.
1.2	Creation of view 1 – to be used as an embedded report. Execute the selection, to get some data on the screen. Switch to View. [optional] To increase readability, in report settings, change Show Result Row As: to First Row set. Remove fields Manager and G/L Account Group (Origin). For both fields, set display to Description. This helps to decrease the width of the report. Of course, an accountant might want to see G/L account numbers, but the title of an account should be good enough for a cost center manager. Otherwise one should reconsider the chart of accounts… For G/L Account Origin, activate subtotals (Result Row: Show). Adjust the key figures to Actual Selected Period, Actual YTP and Plan YTP. To shorten the report, you can set, for the key figures, setting zero suppression for rows to Suppress When All Results Equal Zero. To reduce width, think about rounding amounts to no decimal places. I didn’t do so, but would be an option to increase usability of a report. Save the view with name Actual and Plan Overview. Result:
1.3	Create a second view which will be used later for the KPI. Change the available key figures to Actual YTP, Actual + Forecast, Forecast, Plan (first period to last period of the fiscal year), Plan – (Actual + Forecast). Optionally, add an exception to key figure Plan – (Actual + Forecast). Save the view with name Actual and Forecast. Result:

Step 2: Create a KPI to be used with variants

At first, we will create a KPI measuring the consumption of the budget, taking into consideration forecasted amounts (if encumbrance is scoped). In a second step, we will apply the KPI to two focus area, external expense and travel budget, by creating KPI Variants.

As a key user analytics, perform the following steps.

Step	What to do
2.1	In work center Business Analytics, work center view Design KPIs, create a new KPI.
2.2	In tab General, enter the fields as shown at the screen shot. Don’t forget to save.
2.3	In tab Values and Thresholds, we define a reference to the planned amounts uploaded in Cost & Revenue – Planning. The key figure used (Plan FINCACU16_ROB_02/PTXT_FULLACCYRPER) is the one holding the budget for the whole year – as we are adding the forecast as well. In case you wan’t to compare to year-to-date plan, this is possible as well (using key figure Plan YTP FINCACU16_ROB_02/PTXT_YTPACCYRPER). Take the time to think about it and take your decision. Please enter values as shown at the screen shot. I did not define a reference value. This could be, for instance, previous year’s budget consumption. To get this, you might need to create an additional selection filtering to previous fiscal year.
2.4	In tab Additional Contexts, you might add additional reports helping to explain the situation. I’ll skip this step here.
2.5	To make our KPI ready for KPI variants, we’ll set up a filter as shown. Clicking on Propose Mapping speeds you up after you have entered the filters in the upper table. What we do here is a preparation of step 4 and 5
2.6	Save the KPI, close it and search it in the list of KPIs. Select it and click on Preview. Depending on your key user analytics assignments, you’ll get some values allowing you to check that the KPI is defined correctly. Close it.

Step 3: Create KPI variant “travel budget”

Step	What to do
3.1	In work center Business Analytics, work center view Design KPIs, select the KPI just created. Click on New – KPI Variant.
3.2	On tab General, change the name to Travel Budget Consumption.
3.3	On tab Filter Values, enter the G/L accounts on which travel expense is being posted. In my example, it’s account 500300. Save and Close.

Step 4: Create KPI variant “external expense”

Repeat the actions of step 4 or copy the KPI variant, but use these data:

• Name: External Expense Budget


• G/L Accounts on which external expense (purchases, auditing) is being posted to. In my example, it’s 450230 and 511400, but this will be a longer list in a real-life situation.

You will now have 3 KPIs:

Step 5: Create a dashboard “my cost centers”

From now, we will work as the business user, which is the CC manager (FINANCIAL01 in a ByD Reference System).

As the cost center manager, add an empty dashboard. How to do it has been explained in a video. Don’t add a report to the dashboard at first, just create it and pin it.

You will end up with an empty dashboard:

Step 6: Adjust the dashboard

Step	What to do
6.1	Open the personalization.
6.2	Click on the “plus” sign. Add elements to the dashboard following the screenshots. Save your changes. As a result, you will get this view.
6.3	Adjust the elements by clicking the gear  symbol  of every element. Recommended settings for KPIs: For the report, change the card width to either medium or large, and change the view to Actual and Plan Overview.
6.4	Save your changes. Leave the adaptation mode.

Further possibilities to extend

You can even extend the dashboards with additional KPIs and reports. I’ve used report Expense Reports by Cost Object. To do so, restrict it to the “My Area” cost centers and to expense reports not send, in approval or audit (i.e. that are still in process, status 1 to 3). Delete the date selection. Create a KPI on top of it, based on key figure Cost Center Postings. Now, the dashboard contains an information on upcoming travel cost as well.

Feedback

I hope this blog post helps you to leverage the full potential of SAP Business ByDesign. In case you are adopting this, please let me know by leaving a comment below this post. Or share your ideas, discuss, what’s missing.