Can model changes to the organization structure without impacting past reporting

Description

Organizational structure changes, like department mergers, divestments, name changes, or hierarchal shifts, need to be updated in corporate performance management (CPM) software without impacting historical reports. This feature is crucial because it maintains data and reporting integrity through alternate hierarchy and point in time features, even in the face of organizational changes.

Example Use Case

Scenario: A large corporation with different departments and product lines decides to merge two of its product lines due to overlaps. The company has been using CPM software to track the performance of each product line.

Solution: The CPM's capacity to model changes to the org structure comes into play. The software is updated to reflect the merged product lines, but the historical reporting for each individual line (before the merger) is preserved. As a result, the organization's restructuring does not impact the ability to look back and analyze past performances.

Considerations

This is an important feature if your business is growing and may change its hierarchies in the future. When thinking about this, consider what your business might look like in 5 years. Will the roll-ups of accounts, products, locations all look the same? If so, nothing to worry about. However, if there are re-orgs on the horizon that will impact planning, reporting, and consolidation, this feature is worth considering.

In these re-org situations, most vendors will offer two options:

1. Move the dimensions around in the product, thereby changing all the historical data as well. Users don't always care, as this makes it very easy to run historical comparisons because the hierarchy is the same.
2. Leave the old instance in place with the legacy hierarchy. Re-implement a new instance.

A subset of vendors will allow the creation of the new hierarchy with a retention of the old hierarchy as well, giving you the best of both worlds. This is often called an “alternate hierarchy” as mentioned at the beginning of this page.

Questions to Ask a Vendor

• Legacy Hierarchies: Can we create new hierarchies while retaining historical information as it was? Is this something we can do, or will it require a consulting engagement?
• Comparisons: If we have a legacy hierarchy, how do we compare it to our current hierarchy?