When evaluating the impacts of ideas pipeline, the user may want to view the program through the lense of recurring (annualised) improvements, or cash flow impacts. To accommodate this, the cumulative benefit report can toggle between run-rate targets and cash benefit targets. These simply provide different management accounting views of the pipeline:
- Run rate benefits - annual improvements, therefore how is the income statement impacted?
- Cash benefits - one-time benefits/expenses, how is the cash flow statement impacted?
The two reports are calculated as follows:
- Run Rate Benefits – uses pipeline target data to calculate annualised improvement, by comparing target to baseline, the target is shown as a line, while actuals and forecasts are shown as bars.
- Actual = calculated actual run rate benefit (based on actual - baseline KPI performance)
- Forecast = projected run rate benefits
- Cash Benefits – uses cash benefit targets data
- Actual = Actual IdeaBenefit + Benefit Investment(s) - CAPEX/OPEX investment(s)
- Forecast = projects benefit for the Idea + Benefit Investment(s) - CAPEX/OPEX investment(s)
Idea investment and benefit data is NOT used for Run Rate caluclations, but IS used for Cash Benefit calculations
Configuring Target Report
Based on the Benefit Target Setting highlighted below, the Target line on the Cumulative Benefit Report will be affected accordingly to use either Benefit Targets or Pipeline Targets.
|Select run rate or cash benefit targets|
|Allows selection of specific ideas to graph|
|Selector for specific departments are to be evaluated (level 1 filter)|
|Selector for specific KPI types to be evaluated (only ideas that impact the selected KPI type will be displayed)|
|Sets the number of time periods to evaluate - typically months|
|Selector for specific sub-departments to be evaluated (level 2 filter)|
|Selector for idea definitions to be evaluated (only ideas of the selected type will be evaluated)|
|Selector for team (level 3 filter)|
|Annualised benefit - shows benefit graphs for a full financial year, as opposed to only current (partial) year|
|Show EBIT - shows earnings before income tax target line on graph|
|Show cash flow - shows cash flow target line on graph|
|Calculate current month - will calculate current month as actual, instead of using a forecast value|
Cash investments - such as Capex expenditure and once-off benefits are captured in each idea These Investment categories are defined in Administration -> Investment Categories.
|Monthly benefits shows only the benefits within that month|
|Cumulative benefits shows the total benefits accrued up to that month|
|Actual benefits delivered to date|
|Forecast benefits (selecting the calculate current month will change this to an actual)|