Structured Flexibility: The Key to World-Class FP&A Solutions with Acterys & Power BI

Summary

In this edition, we will be covering the following items:

1. The input and output “mechanism” of Acterys

2. How you can structure logic and calculations

3. Using these building blocks to create self-service ecosystem

The Building Blocks of Acterys: Inputs, Outputs, and Calculations

Acterys solutions are built on the foundation of data models with clear inputs, outputs, and calculations.

1. The Data Model: The data model underlying Acterys is simply the set of related data tables that connect to (and integrate) your source systems. This can include data from your ERP (D365, NetSuite, etc.) and other systems like Salesforce.

2. The Inputs: Every planning solution (Revenue, OPEX, etc.) is built on defined inputs entered directly via Power BI. This means that a business user will enter input “drivers”, such as units, costs, or headcount. These will be used by Acterys to perform calculations and display the results in real-time in Power BI.

3. The Calculations: Configured in Acterys (encoded in SQL) is the logic that calculates your “outputs”. This is the resulting revenue, COGS, OPEX, payroll, CAPEX, or any other value that your team needs to produce reporting and planning on. This logic can be configured using SQL or within the Acterys web application.

   1. Note: This step is where the real magic happens. Leveraging SQL or Acterys’ native logic-builder, your team has an intuitive, flexible method to define its own custom business logic. This is where you can create the “structured flexibility” that makes Acterys so powerful.

4. The Outputs: The results of your calculations are displayed in real-time in Power BI. This is extremely powerful for building out forecasts, modeling what-if scenarios, and comparing the impacts of multiple inter-related business assumptions in one model.

Learning More About Calculations in Acterys

The business logic encoded in Acterys is what powers your FP&A solution. This is where you will define how the model should treat the “incoming” inputs to generate planning outputs in real-time. Understanding the pattern behind developing business logic is quite simple and, once mastered, will enable you to create an ecosystem of solutions for your organization. Take a look at the below examples, and then think through what configurations of logic you would like to use:

1. Revenue: Given [Units] and [Price], calculate [Sales]

2. Depreciation: Given [Purchase Price], [Salvage Value], and [Useful Life], calculate [Straight Line Depreciation]

3. Payroll: Given [Salary], [Bonus %], [401K Match %], [Insurance Costs], [Payroll Tax %], calculate [Total Labor Expense]

4. Cost Allocation: Given [Production Cost], [Product List], [Volume by Product], calculate [Allocated Production Costs]

Leveling Up Your FP&A Ecosystem

It will take time until your team has the “rhythm” to systematically work with business partners to deliver great solutions. Your organization can take the time to build these skills independently or work with implementation partners, depending on your goals and timeline. Most importantly, you can chart your organization’s path to success with the following steps:

1. Inventory Your Planning Needs and Priorities: Often buried deep in a web of Excel spreadsheets are the core drivers of your business results. The most challenging step in this stage of the finance transformation journey is “untangling” and understanding the business logic that drives each team, department, and business unit. While the work to unpack this logic can be difficult and time consuming, it will pay for itself generously in the coming steps.

2. Identify Your Frist (Small) Project and Gather Requirements: With your inventory of planning methodologies and logic, your team’s first objective is to get quick win. Identify a relatively small use case your team can deliver in short order. This will help build confidence, momentum, and secure buy-in from more stakeholders. Work with your business partners to precisely define the business logic (remember, inputs, calculations, and outputs) needed to make the project a success.

   1. Important: Keeping the scope small and simple at this stage is critical to reducing risk and building credibility. If your team is experimenting with a small dashboard and has some difficulty, no one will be concerned. However, if you start with a “big bang” solution, your team will be under immense pressure to deliver from the outset.

3. Implement the Solution: This will be your team’s first test and it is the reason we recommend starting with a small project. Your team’s goal is to build a solution the replicates the exact functionality that your business partners need. Successfully delivering this solution will give you the building blocks to build more advanced tooling in the future and will give your team credibility with stakeholders.

4. Identify Next Project and Look for Synergies to Create a Solution Ecosystem: Now that your team has a win under their belt, they are ready for their next challenge. To keep the momentum going, the objective should be to prioritize based on two criteria:

   1. Identifying Synergies: Your team can target an opportunity leveraging the solution that was just delivered and fits together in a logical way. If your team’s first project was OPEX planning at the GL account level, a second project might be adding logic to support sub-accounts.

   2. Incremental Difficulty Increase: Each project should add incremental value to the organization, but your team will also benefit if the projects are sequenced by level of difficulty. This has the benefit of giving your organization time to build experience (repetitions) of delivering solutions (independently or with implementation partners) before tackling more challenging problems.

Action Items & Next Steps

We will learn about a new topic, introduced now.

1. What critical processes are dependent on complex logic, hidden in spreadsheets in your organization?

2. What are some small projects that you can use to practice precisely defining business logic for?

3. Looking across the organization, are there common pain points felt by multiple teams who could benefit from a shared solution?

4. What are the common inputs and calculations that could be simplified and streamlined in your organization’s FP&A processes?

In the Next Newsletter

We will learn about consolidations and intercompany reporting and eliminations in Power BI.