Setting Up Activity-Based Management Models and Scenarios

This chapter provides an overview of models and discusses how to:

• Set up Activity-Based Management models.

• Copy Activity-Based Management models.

Understanding Models

A model is a complete set of rules used to define model objects and their relationship to the general ledger. Models let you define how to measure performance within your organization by providing insight to such questions as:

• Which cost object do I want to measure—customers, products, or channels?

• What activities are key to my organization and how do they relate to the cost objects?

You can define, run, and analyze models using Activity-Based Management.

Model Configuration Steps

To configure a Activity-Based Management model:

1. Establish a model under a setID.

   This model is accessible to all business units using that setID for the Activity-Based Management Models record group.

2. Create a scenario ID under the setID, and then assign the model ID to the scenario.

3. Associate the scenario ID with a business unit and calendar.

   Note. The calendar defined here overrides the calendar defined for the PF business unit, letting you associate quarterly models with a monthly PF business unit, for example.

4. Define the Activity-Based Management model properties.

This PeopleBook only discusses the last of these four steps. For the first three steps, refer to information in the Enterprise Performance Management Fundamentals 9.1 PeopleBook for details on setting up a model ID and scenario.

See Defining Models and Scenarios.

The following diagram illustrates the steps to create a Activity-Based Management model:

Model configuration setup procedures

Understanding Object-Oriented Modeling and Scenarios

PeopleSoft Enterprise Performance Management (PeopleSoft EPM) lets you modify a model and view the results of the impact. Employing object-oriented modeling lets you copy the data that must be changed instead of copying an entire model by defining a what-if scenario in the Scenario Manager, a parent model, and a child model.

For example, the parent model could represent your current business operations. This is the model that you want to use as the basis to assess the impact of any changes. The child model could represent these changes.

You can create scenarios for each child and parent combination.

Prerequisites

Before creating your models in Activity-Based Management, you must:

• Complete your EPM Foundation setup.

• Review the Understanding Activity-Based Management Models and Model Types chapter in this PeopleBook.

• Review the Using Trees in Activity-Based Management chapter in this PeopleBook.

• Create a model ID and scenario ID in the EPM Foundation application.

• Assign the model ID to the scenario, and then associate the scenario with a business unit and calendar.

See Also

Using Trees with Activity-Based Management

Setting Up Activity-Based Management Models

Activity-Based Management model properties let you specify calculations for comparative analysis. Once you create a model ID, assign it to a scenario, and associate it with a PF business unit, define Activity-Based Management properties for the model.

To define Activity-Based Management model properties:

1. On the Models page, specify calculation types and model information.

2. On the Run Control Information page, define the run control information for the model.

Pages Used to Define Model Properties

Defining an Activity-Based Management Model

Access the Models page (Activity Based Management, Setup, Model, Models).

To set up the Activity-Based Management model:

1. Select the Model Type:

   Actuals Model	Select to analyze past (historical) data to affect the future. Actual models are typically easy to implement and understand but have limitations to their effectiveness (such as the assumption that entities operate at 100 percent of their capacity which compromises driver information if the capacity of the entities is not fully used and, because the actual data is historical. you cannot forecast based on anticipated costs).
   Budgeted Model	Select to view the future with budgeting expenses and forecast using anticipated costs. While easy to implement and understand, budget models share the same disadvantages as those based on actual data.
   Capacity Model	Select to measure the cost of capacity resources (which is similar to standard costing). The capacity rate is the result of the budgeted amount being divided by the capacity driver quantity. The capacity model lets you assign excess costs to a capacity cost object and balance the actual amounts within the model. You can then track and report on excess capacity.
   Combination Model	Select a model that uses both capacity and frozen rates. This is typically used in manufacturing environments.
   Frozen Rate Model	Select to use a frozen, manually defined rate that enables calculation of variances from actual, budget, or capacity values. You can define the frozen rate on the Drivers page.

2. In the Model Information group box, select the Ledger Mapper Rule ID to apply to this model that identifies the location of the PeopleSoft EPM general ledger tables for this model.

3. Click View Related Links to add a Ledger Mapper rule or update an existing one.

4. If you are setting up several models with costs flowing from one to the next through interunit drivers, use the Sequence Number field to specify the flow sequence between the models.

5. If you are using shared-services models and you want amounts from other models to be distributed into this model through relationships established by interunit drivers, select Accept Inter Unit Cost.

6. In the Model Trees group box, specify the trees that you want to use for this model:

   Resource	Enter the name of the resource tree.
   Activity	Enter the name of the activity tree.
   Costs Object	Enter the name of the cost object tree.
   	You can click Cost Object Trees to access the Roll Up Tree Names page, which rolls up data by dimension in each individual tree to the cost-object level that you define in the Costs Object Tree Name field.
   	Click View Related Links to add or update the Activity-Based Management tree metadata for any of the trees that you specify.

7. Select a Tree Resolve Method to determine the detail of the tree roll-up:

   Target Resolve Only	The tree roll-up saves data for each node.
   Target to Source Resolve	The tree roll-up saves data only for the nodes defined as a source.

See Also

Activity-Based Management Modeling Components

Specifying Roll Up Tree Names

To access the Roll Up Tree Names page, from the Models page — Setup, Model, Models — click Cost Objects Trees.

Specify the Product Tree, Channel Tree, Customer Tree, and Department Tree that you want to roll up to the cost-object level that you define in the Costs Object Tree Name field on the Models page. This lets you pick any tree to serve as your cost-object tree, including trees brought in from your enterprise resource planning system.

Defining Run Control Information

Access the Run Control Information page (Activity Based Management, Setup, Model, Models, Run Control Information tab).

To set up run control information for the model:

1. Specify how the system accesses information in theABM Run Info group box.

   Get Drill Level 2 information	Select only if you are intending to use the Activity-Based Management Drillback engine to drill back on data.
   Use Actual Mapper for Budget	Select to use actual ledger to resource mapping for both actual and budgeted calculations.
   Reciprocal Looping Model	Select if this is a reciprocal looping model for allocating shared-service resource costs to other shared-service resources.
   	After you select the Reciprocal Looping Model check box, click Refresh, and then click the Reciprocal Looping Model button to access the Reciprocal Looping Parameters page and define looping parameters such as Tolerance Percentage, Minimum Iterations, Maximum Iterations, and Residual Target Model.

2. If you are using the Model Generator or the Ledger Mapper Generator for this model, enter the Model Gen ID (Model Generation ID) or the Ledmap Gen ID (Ledger Maps Generation ID).

   You defined these IDs on the Model Generation Definition and Ledger Maps Generation Definition pages.

3. Specify the Activity-Based Management model validation profile that you want performed when you start the Model Validation engine:

   Audit Validation	Verifies your model metadata setup.
   Complete Validation	Completely validates the model including audits, data integrity, and setup.
   Data Integrity Validation	Ensures that the information that you want to model is available and accurate.
   Setup Validation	Searches for errors that cause the Activity-Based Management engine to stop processing (such as no filters being available for the pointers to use, activities not matching the drivers, or invalid cost object dimensions).

4. In the Employee Profile Info group box, select the type of calculations for an employee profile:

   Recreate Source Data	Select to use the Employee Profile engine (described later) to delete existing resource and resource driver data and recreate it.
   Weighted Calculation	Select to include salaries in the employee profile driver calculations.

Planning Info

Use the fields in the Planning Info group box for APBS and display only if you are using a child model. Refer to the ABPS sections of this PeopleBook for more information on these fields.

See Also

Setting Up Planning and Simulation Criteria

Specifying Reciprocal Looping Parameters

To access the Reciprocal Looping Parameters page from the Models page, select the Reciprocal Looping Model check box, click Refresh, and then click the Reciprocal Looping Model button and define looping parameters.

To specify reciprocal looping parameters for a reciprocal looping model:

1. Enter the Tolerance Percentage that the looping object must reach before looping terminates.

   This percentage is the difference between the amount of the cost object before and after a loop.

2. Specify the Minimum Iterations and Maximum Iterations to apply to this model.

3. Select the Residual Target Model ID of the model to which the system should allocate any residual cost after the looping.

Copying Activity-Based Management Models

The Activity-Based Management Model Copy feature creates a duplicate of an existing model that includes the ledger mappings and drivers. You must have an established model from which to copy object information. The new model name must be defined within the system for the model copy function to copy the data from the first model into the second. You can modify the duplicate model to create new models.

Page Used to Copy Models

Copying an Activity-Based Management Model

Access the Model Copy page (Activity Based Management, Setup, Model, Model Copy).

To copy an Activity-Based Management model:

1. Select the New Model ID for your model, and then click Copy to create a copy of the model.

   Note. You must create your model ID and scenario in EPM Foundation before selecting the model in the New Model ID field.

2. Access the Model component, and then make the necessary modifications.

See Also

Setting Up Activity-Based Management Models