Income Statement may be sliced by multiple dimensions

Description

In Corporate Performance Management (CPM) software, slicing an income statement by multiple dimensions involves the ability to view and analyze financial data from varied perspectives or business elements. These dimensions may include geographic regions, product lines, sales channels, customer segments or any other parameter relevant to the business. This functional requirement provides a deeper, multi-faceted understanding of a company's financial performance.

Example Use Case

Scenario: An international retail corporation uses CPM software to generate detailed reports, including income statements. To understand the various factors contributing to their income, they want the statement to provide insights not just on the total revenue or profit, but also on how it's distributed across different dimensions.

Solution: With the functionality to slice income statements by multiple dimensions, the retailer can segregate and analyze income data by regions (e.g., Europe, North America, Asia), product lines (e.g., menswear, womenswear, accessories), sales channels (e.g., online, flagship stores, resellers), and customer segments (e.g., loyal customers, new customers, one-time buyers). This practice enables them to pinpoint specific areas of strength or concern, aiding strategic decision-making.

Considerations

This requirement only refers to the Income Statement because most businesses plan exclusively at that level. Many do not plan for a Balance Sheet whatsoever.

When we say “slice”, we're referring to pulling in a specific dimension and showing the Income Statement broken down by the amount of values in the dimension. For example, Product may include “Shirts, Pants, Hats, Sunglasses”. The product should allow those all to appear as their own Income Statement. When I then bring in Location including “Denver, San Jose, Colorado Springs” it should explode it out even further.

Some products will do this natively thanks to a highly-dimensionalized architecture. Others will struggle when slicing and layering dimensions like this, becoming frustratingly slow. Big sets of data will bog down many systems on the market. We recommend, if you have a large data set, asking the vendor to use it. Most demo data sets are small in order to improve system performance on the demo.

Questions to Ask a Vendor

• Slice and Dice: How many simultaneous dimensions can we put to work against an Income Statement?
• Scalability: How many members of a dimension can we include? We have 10,000 SKUs. Can each of those be shown as an independent Income Statement?
• Re-Using Views: If we slice up an Income Statement, can we save the work we did for re-use and for sharing with others?