Using Trees with Activity-Based Management

This chapter provides an overview of trees in Activity-Based Management and discusses:

• Related documentation.

• Trees and reporting.

• Trees and Activity-Based Management (Activity-Based Management) processing.

Understanding Trees in Activity-Based Management

Trees add a visual layer and hierarchical structure, letting you see where detail items (such as departments and accounts) fit into your organization's structure and letting you navigate to the appropriate level of detail. Use trees to organize and maintain Activity-Based Management objects and dimensions and to simplify reporting needs. Visually establish and change the rules for summarizing detail elements. When the summarization rules change, for example, simply update the tree; the system automatically reflects your revisions everywhere within the tree. You can also use trees to summarize or combine financial results from all segments of your organization.

While you definitely want your financial reporting systems to manage detailed information, their greatest value comes from their ability to consistently summarize huge volumes of information for management reporting. Whether you're an accountant, CFO, tax manager, product manager, or sales manager, chances are that you're only concerned with a portion of your organization's database—a particular level of information. Yet, at the same time, you also have to summarize and look at the big picture. Trees give you the option to easily view information at any level.

There are three main reasons to use PeopleSoft trees with your Activity-Based Management application:

• Reporting.

• Processing.

• Security.

Note. Review the Enterprise Performance Management Fundamentals 9.1 PeopleBook documentation for details about security.

See Also

Setting Up EPM Security

Related Documentation

Consider referring to the documentation in the following table for more information about PeopleSoft Tree Manager including tree terminology, types of trees, and establishing the tree structure as well as information about how trees are used as part of the EPM applications:

Trees and Reporting

Use reporting trees to:

• Map general ledger amounts into Activity-Based Management resource objects.

• Generate reports from the PF Ledger table that summarizes results for a particular dimension or business unit.

Without a tree, you would have to explicitly specify which departments to include every time you create a report. By using trees, the system can consult the trees to determine which departments or account groupings to include in reports. In addition, trees give you the option to view information at any level.

Trees and Activity-Based Management Processing

Activity-Based Management requires PeopleSoft trees to roll up or summarize the values calculated for your Activity-Based Management objects or models. PeopleSoft delivers Activity-Based Management tree structures with the application to help get you started.

Your Activity-Based Management objects, resources, activities, and cost objects have their values calculated by the Activity-Based Management engine. In many cases, you want to summarize lower-level information for inquiry purposes as well as to meet certain reporting needs. The Activity-Based Management engine references these trees to perform this summarization.

PeopleSoft trees enable model roll-up. If you have multiple models for a single business unit, you can set up these models so that they roll up to higher-level models to ensure complete, comprehensive costing for the entire business unit.

Using PeopleSoft trees, Activity-Based Management assesses costs for each model and assigns costs for each resource, activity, and cost object based on where each resides in the tree and whether each is a target or a source. Sources are the resources, activities, and cost objects that are being assigned to the next level. To be a meaningful part of a tree, every branch must contain at least one source or one parent branch that contains a source. Sources must balance for every resource, activity, and cost object; otherwise, the Activity-Based Management engine generates error messages. Every resource, activity, or cost object that you add to a tree beneath a source is informational only and cannot be used for reporting and costing.

In addition to having sources, trees also have targets. A resource, activity, or cost object can be a target and can receive money. The sum of all targets must balance for every resource, activity, and cost object.

To use trees for model roll-up, create a tree that displays how smaller models should be added together into a bigger model. Thus, all you need to create are the smaller models at the end of the trees. PeopleSoft Tree Manager and Activity-Based Management calculate all of the other models.

For example, suppose that your business unit has two production sites and you decide to independently model these production sites. Create a model for Site A and a model for Site B, and then calculate costs for both sites. You then find that you are also interested in creating a model for the entire business unit. Rather than creating a new model, use model roll-up to combine the two existing models into a larger model. By using trees, Activity-Based Management lets you roll up multiple levels. For example, you can roll up Site A and Site B into a Production Center 1 model. You can then roll up Production Center 1 and 2 into the final business unit model.

Note. Because trees use model information derived from the calculation tables (where primary objects are rolled-up and the results are stored), your views may be skewed and occasionally result in totals that appear too high.