8 Precursor to Analytics

Prerequisite Configuration steps to ensure that Financial Statements available at the Reporting Layer are correctly populated.

At the heart of all the reporting and analytics in PACS, lies Financial Statements – or most importantly the Income Statement. The other financial statement that is part of the Management Reporting dashboard is the Balance Sheet. At the core of Financial Statements defined within PACS are Financial Elements – in short FE’s. A Financial Statement, at its core is nothing but a hierarchical representation of Financial Elements. While PACS has seeded OOTB Financial Statements (Balance Sheet Hierarchy and Income Statement Hierarchy available from Dimension Management UI), it also allows banks/ customers to create their own custom variations of those Financial Statements. It is however recommended to use one version while analyzing at the same time the Income Statement for both Top Down (Management Ledger Reporting) and Bottom Up (Instrument Reporting) purposes.

The Financial Element Hierarchy is the access point for all the Financial Statements. For the Analytics Reports to show up on the respective dashboards, there are some tasks that you need to perform at the Profitability Management Cloud Service (PFTCS) end, which is currently a prerequisite for the Profitability Analytics Cloud Service to be operational.

As soon as you have these hierarchies in place (refer to Dimension Management for more details) you need to perform profitability allocation both top-down and bottom-up so for both Management Ledger and Instruments tables. Ideally the allocation must be performed on the financial elements that are pertaining to that hierarchy - the ones you will be utilizing for the Income Statement. After the allocation has been performed on the Top-Down Income Statement, the runchart must be executed to propagate the data in the results area, for the purposes of Management Reporting.

For Bottom Up – Profitability Insights, Customer Profitability Reports and so on, you will have to execute an additional step from the set-up configuration menu Financial Element Mapping. This functionality allows you to map the FE’s you have allocated to the Instrument Portfolio columns. Note that allocations to the instrument columns can be done during the usual course of defining and executing allocation rules at PFTCS – the Profitability Management Cloud Service. The application also allocates the instrument columns on the lines of the FE’s of the Top-Down Income Statement. Additionally, you can also directly allocate Instrument columns without passing via Management Ledger, by defining those rules separately in the allocation process.

In essence, the FE to Line Item Mapping functionality allows you to define a one-to-one mapping of a FE to a portfolio column - which comes with the capability, via runchart execution, to read the instrument columns you have allocated in the previous step and propagate the data into the results area for PACS and retrieve the hierarchy of the Bottom Up Income Statement that is consistent with the Top-Down Income Statement created using the Financial Element Hierarchy.

This mapping is already available for the seeded Income Statement Hierarchy for the Bottom-Up scenario. However, for a custom Income Statement Hierarchy, if you create new FE’s, then those FE’s will also require a corresponding Instrument Portfolio column that you have allocated. Additionally, that column, which can be an existing column or placeholder, must be mapped via the Financial Element Mapping UI.

After the mapping and hierarchies are in place, the allocations have been run and runcharts are executed, the results area is populated, paving the way for Income Statements at Management Ledger and account levels. Subsequently, these results are consumed by the Reporting Layer, which feeds the reports for – Management Reporting, Profitability Insights, Segmentation, Income Statement at account and customer levels, CLTV Forecast, Customer Group Income Statement and so on.