Key Performance Indicators (KPIs) in PowerPivot
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A Key Performance Indicator (KPI) is based on a specific measure and is designed to help the end user evaluate the current value and status of a metric against a defined target. The KPI gauges the performance of the value, defined by a Base measure, against a Target value, also defined by a measure or by an absolute value. In business terminology, a KPI is a quantifiable measurement for gauging business objectives. For example, the sales department of an organization might use a KPI to measure monthly gross profit against projected gross profit. The accounting department might measure monthly expenditures against revenue to evaluate costs, and a human resources department might measure quarterly employee turnover. Each is an example of a KPI. Business professionals frequently consume KPIs that are grouped together in a business scorecard to obtain a quick and accurate historical summary of business success or to identify trends.
A KPI includes:
- Base Value
A Base value is defined by a measure that resolves to a value. This value, for example, can be a measure created as an aggregate of sales or a measure created to define profit for a given period.
- Target value
A Target value is defined by a measure that resolves to a value, or by an absolute value. For example, a measure could be used as a target value where the business managers of an organization want to compare how the sales department is tracking toward a given quota, where the budget measure would represent the target value. An example where an absolute value would be used as a target value could be where the HR manager would like to evaluate each employee’s number of sick-leave days compared to the average, where the average number of sick-leave days represents the absolute value.
- Status thresholds
A Status threshold is defined by the range between a low and high threshold. The Status threshold displays with a graphic to help users easily determine the status of the Base value compared to the Target value.
The sales manager at Adventure Works wants to create a PivotTable that she can use to quickly display whether or not sales employees are meeting their sales quota for a given period (year). For each sales employee, she wants the PivotTable to display the actual sales amount in dollars, the sales quota amount in dollars, and a simple graphic display showing the status of whether or not each sales employee is below, at, or above their sales quota. She wants to be able to slice the data by year.
To do this, the sales manager chooses to add a Sales KPI to the AdventureWorks workbook. The sales manager will then create a PivotTable with the fields (measures and KPI) and slicers to analyze whether or not the sales force is meeting their quotas.
In the PowerPivot workbook, a measure on the SalesAmount column in the FactResellerSales table, which gives the actual sales amount in dollars for each sales employee is created. This measure will define the Base value of the KPI. The sales manager can select a column and click Autosum on the Home tab or type a formula in the formula bar.
The Sales measure is created with the following formula:
The SalesAmountQuota column in the FactSalesQuota table has a sales amount quota defined for each employee. The values in this column will serve as the Target measure (value) in the KPI.
The SalesAmountQuota measure is created with the following formula:
There is a relationship between the EmployeeKey column in the FactSalesQuota table and the EmployeeKey in the DimEmployees table. This relationship is necessary so that each sales employee in the DimEmployee table is represented in the FactSalesQuota table.
Now that measures have been created to serve as the Base value and Target value of the KPI, the Sales measure is extended to a new Sales KPI. In the Sales KPI, the Target SalesAmountQuota measure is defined as the Target value. The Status threshold is defined as a range by percentage, the target of which is 100% meaning actual sales defined by the Sales measure met the quota amount defined in the Target SalesAmoutnQuota measure. Low and High percentages are defined on the status bar, and a graphic type is selected.
The sales manager can now create a PivotTable adding the KPI’s Base value, Target value, and Status to the Values field. The Employees column is added to the RowLabel field, and the CalendarYear column is added as a Slicer.
The sales manager can now slice by year the actual sales amount, sales quota amount, and status for each sales employee. She can analyze sales trends over years to determine whether or not she needs to adjust the sales quota for a sales employee.
Before creating a KPI, you must first create a Base measure that evaluates to value. You will then extend the Base measure to a KPI. How to create measures are described in another topic, Measures in PowerPivot. A KPI also requires a target value. This value can be from another pre-defined measure or an absolute value. Once you have extended a Base measure to a KPI, you can then select the target value and define status thresholds in the Key Performance Indicator dialog box. For more information, see Key Performance Indicator Dialog Box
To create a KPI
In Data View, click the table that has the measure that will serve as the Base measure. If you have not already created a Base measure, see Measures in PowerPivot.
Make sure the Calculation Area is displayed. If it is not showing, in the View area of the PowerPivot window’s Home tab, click Calculation Area to show the Calculation Area.
The Calculation Area appears beneath the table in which you are currently in.
In the Calculation Area, right-click the measure that will serve as the base measure (value), and then click Create KPI in the context menu.
In Define target value, select from one of the following:
Select Measure, and then select a target measure from the listbox.
Select Absolute value, and then type a numerical value.
In Define status thresholds, click and slide the low and high threshold values.
In Select icon style, click an image type.
Click Descriptions, and then type descriptions for KPI, Value, Status, and Target.
To edit a KPI
- In the Calculation Area, right-click the measure that serves as the Base measure (value) of the KPI, and then click Edit KPI Settings.
To delete a KPI
In the Calculation Area, right-click the measure that serves as the Base measure (value) of the KPI, and then click Delete KPI.
Deleting a KPI does not delete the Base measure or Target measure (if one was defined).