CX Works

CX Works brings the most relevant leading practices to you.
It is a single portal of curated, field-tested and SAP-verified expertise for SAP Customer Experience solutions

Leverage the Value of KPI's in SAP Sales Cloud

16 min read

Guide on how to create a KPI in SAP Sales Cloud

Table of Contents

Introduction

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is performing in line with its target objectives. Organizations use key performance indicators at multiple levels to keep a constant track of their success for achieving the set targets. High-level KPIs (organizational level) can be used to focus on the overall performance of an enterprise, while low-level KPIs (employee or team level) can help to focus on processes or employees in specific departments or functional areas. 

In SAP Sales Cloud KPIs are an efficient way to track the performance within your Organization and a very effective tool to showcase important and relevant information in a simple tile. Navigation from the KPI tile allows you to see detailed information as well as explore further into dashboards or reports to slice and dice. In order to determine what constitutes an improvement a KPI value is often evaluated against a reference or a target value. 


Business Context

Depending on the type of industry and the corresponding departments in an Organization, there could be several KPIs that can be defined to monitor the growth aspects. Each department may want to measure success based on specific goals/targets against a set period or time. For example, below KPIs can be set at department level in an organisation:

  • Sales KPIs – Sales forecast, Pipeline multiple, Product performance, Sales per rep, Quote to close ratio, Monthly sales growth etc.
  • Marketing KPIs – Marketing ROI,  Sales conversion rate, Cost per Lead, Lead-to-customer ratio, Social media traffic etc.
  • Service KPIs – Number of ticket backlog, First response time, Average reply time, Tickets with high priority, Top agents etc.


How to design a KPI

The design of custom KPI's are executed by your project team by leveraging the SAP Sales cloud reporting capabilities. When you create a KPI, you set values and thresholds that are used to evaluate the status of the KPI and determine to what degree the strategic goal of the KPI has been fulfilled. 

In this article, take the creation of a KPI that shows the "Average Length of Sales Cycle of Opportunities in Weeks" for an annual period as an example. Thereby Sales Cycle is defined by the time elapsed between initial prospecting and final closure of a deal. Hence the "sum of time elapsed in weeks for all opportunities that are won or lost" divided by "the total number of all closed deals" for an annual period - preferably rolling 12 months only for the divisions/ geographies included in the scope of survey. Rolling 12 months implies that Opportunities with a close date within the last 1 year/ 12 months/ 365 days – This can be specified in the selection parameters of a report. Only for the divisions/ geographies included in the scope of survey – This could correspond to Sales Organizations/ Sales Units/ Territories which again can be specified in the selection parameters of a report 


To get this KPI from the transactions you record in SAP Sales Cloud, you need to break it down into the following reporting elements and steps:

  1. Key Figures Used for the Calculations
  2. Reports and Report Views using the Key Figures
  3. KPI Design using these Key Figures and Report View
  4. Add KPI to Homepage


Key Figures Used for the Calculations 

Key figures are data items with numeric values and have an associated unit of measure or currency assigned. Some examples are pipeline value, invoice net value, purchase order quantity or tickets in queue.

In the Design Key Figures work center view, administrators have an overview of calculated and restricted key figures and key figure structures available in data sources.


You can also create your own calculated and restricted key figures for use in reports by clicking the "New" button. The specifics for the KPI "Average Length of Sales Cycle in Weeks" calculation involve the creation of the following key figures:

  • (A) Sum of Time Elapsed in Weeks for All Closed Deals
  • (B) Total Number of All Closed Deals
  • (C )Average Length of Sales Cycle (in Weeks) = A/B

(A) Sum of Time Elapsed in Weeks for All Closed Deals 

1. Time Elapsed for Opportunities in Weeks = Close Date – (minus) Start Date / 7 in Weeks 

Step 1



Step 2


Step 3





2. Opportunities in Status Won or Lost

Get the time elapsed only for the closed deals These are the opportunities that have been set as Won(Successful) or Lost(Unsuccessful)

Step 1




Step 2



(B) Total Number of All Closed Deals

To get this key figure you need to get a count of all Opportunities that are set to Won or Lost – This is the denominator of the Average that you are trying to get. Hence you need to create a restricted key figure – Get a "Total Count" of all Opportunities restricted by the Status = Won or Lost

Step 1


Step 2


Step 3



(C) Average Length of Sales Cycle (in Weeks) = A/B

Finally, calculate the Average Length of Sales Cycle in Weeks. Since you have the numerator (A) and denominator (B), you need to create this key figure to calculate the Average (A/B).

Step 1


Step 2


Step 3




Reports and Report Views using the Key Figures

Most reports can serve as a basis for the values used in a KPI. Exceptions are master data reports (reports without key figures) and reports in which the key figures are in a key figure grid. It is fair to say that all KPI's are highly dependent on the correct setup of the report the KPI is based on. Hence it is crucial before simply setting up a KPI, to discuss and define the requirements of a KPI in detail in order to setup the underlying report in a correct and meaningful manner. 

You can create and edit reports custom reports by using the Report Wizard.



(A) Create New Report Using the Report Wizard

For the example of creating a KPI that shows the Average Length of Sales Cycle for Opportunities, the report creation and setup is straight forward. In the Design Reports work center view, you create a new report on basis of the "Opportunity Header" data source. Take care that you to select the custom key figures that you created above, along with the standard key figures "Start Date" and "Close Date". Also select "Opportunity ID, Close Date, Status, Sales Organization" in the characteristics and more as per your requirements. Finally, confirm the report creation. In this example, the custom report is created with name "Opportunity Analysis".


Step 1


Step 2 




(B) Create Report View and Selection 

As a next step, you define the views and selections that bring up the values for the KPI:

  • For the graphical display of the Average Length of Sales Cycle in Weeks

  • For the Details of the Durations in the List View 

For this purpose, firstly open the recently created report. In this example the report "Opportunity Analysis".

Selection

On the report "Selection" tab choose the relative selection "Last 365 days" for "Close Date" and select the values "Won" and "Lost" for "Lifecycle Status". Next, save the selection as "Last 365 Days Won and Lost". 



Views

In a next step you need to define the views to display the Average Length of Sales Cycle in Weeks. At first, deselect all key figures that came as default for this report with exception of the previously created key figure "Average Length of Sales Cycle (in Weeks)".

The selection "Last 365 Days Won and Lost" and key figure will be used later on to create the KPI and to show the value on the homepage tile. 

    • Graphical Display of the Average Length of Sales Cycle in Weeks
      For drilling down from the KPI you create a graphical view for the Average Length of Sales Cycle per Sales Organization. For this add "Sales Organization" as a row field and show the report view  graphically as a column chart. Save this view as "Average Length of Sales Cycle by Sales Org.".


  • Details of the Durations in the List View
    For the List View, you would like to display the characteristics "Opportunity ID", "Sales Organization" and "Lifecycle status". As key figures add "Start Date" and "Close Date". Save this view as "Average Sales Cycles Details".






KPI Design using these Key Figures and Report View

Since the relevant report views and selection are defined now, you can proceed with creating the KPI itself. From the Design KPI's work center view, select the "New" option to create a new KPI.



You create the KPI with the name "Average Length of Sales Cycle (in Weeks)". The current value is the basis for calculating the KPI on the Home Page Tile and represents the key figure value to be improved. It is a key figure from a report that is restricted using a specified selection. These are the same as you created in previous step. On the buttom you can specify either a context dashboard or context report. You can use context reports or context dashboards to provide more insight about the selected KPI. This is used when you drill down from the home page tile. In this example select the previously created graphical report view as a drill down. 


In the tab values and threshold you can determine how the KPI is to be interpreted. Depending on your business requirements, you can set reference and target values as well as warning and alert points for your KPI. Reference and target values are compared to the current KPI value. 

A reference value is a key figure value which serves as a benchmark against which a change to the KPI current value can be interpreted as positive or negative. The reference value is used to determine the delta of the current value to the reference value. If you decide to set a reference value, you can get the value from a report or provide a fixed value. You must also specify to what degree deviation from the reference value is tolerated. The tolerance you specify determines how the change in the KPI current value is to be interpreted. 

The target value represents a goal to be reached and enables you to quantify an improvement of the current value. Target values are used to determine status; the relation of the target value to the current value determines the status. If you decide to set a target value, you can get the value from a report or provide a fixed value.

Thresholds are used to determine the status of the KPI value. There are three statuses: alert, warning, and on track, represented by the colors, red, yellow, and green. The status is used to visualize and monitor the KPI. If you set a threshold, you have to determine the source of the threshold value along with what constitutes an improvement of the KPI. Note that you can determine what constitutes an improvement of a KPI independent of whether you set a threshold value source. The direction of improvement indicates in which direction a change to the KPI value can be interpreted as positive:

  • Maximize: The KPI value should increase.

  • Minimize: The KPI value should decrease.

  • Keep in Range: The KPI value should stay within a specified value range.

In your example, you want to minimize the Average Length of Sales Cycle. in Weeks. First, define the target value as a fixed value of 8 weeks. For sure, you can choose any other fixed value, if needed. Next set the thresholds for alert point at 14 weeks and the warning point at 11 weeks. If the Average Sales Cycle is above 14 weeks, it would be in the red zone and those above 11 weeks would be in the warning zone.


In the "Additional Context" tab you can make additional context reports available when viewing the details of the KPI. You can also select multiple additional context reports for the KPI. In this example you add both the list view "Average Sales Cycles Details" and also the graphical view "Average Length of Sales Cycle by Sales Org." to be used for the additional drill down from the KPI.


After saving the KPI, you can perform a preview to check the correct setup of the KPI.



Add KPI to Homepage

Now that you have created the KPI, you can include this as a Home Page Tile. Navigate to the Homepage. Click on the pen icon to switch to the Adapt mode and select a role for which you would like to configure the KPI on the homepage. Please note: Each role needs to be adapted individually for home page configurations. In the adaption mode choose "Existing Cards" and add search for the KPI "Average Length of Sales Cycle (in Weeks)" in order to add this KPI to the homepage.


The KPI is now displayed on the homepage. Click on the KPI to check the other display options and choose the speedometer display. Finally, publish the changes. With this the KPI has been setup and ready to be consumed by the rules it is assigned to.



Insight to Action: Overview

Below you find an overview of how all reporting elements are connected and to what extent the individual elements complement each other and interact.


Best Practices

  • Discuss and define the KPIs for end-users. Design KPIs based on business roles
  • When creating reports or key figures, be aware how you can benefit from this by using KPI's
  • Review if you need multiple context reports vs context Dashboard
  • Consider using dynamic target and reference using reports
  • Configure alter and warning points to see where you stand
  • Add only tiles that are absolutely necessary for homepage reporting. Try to limit Homepage to KPI tiles, if possible






Conclusion

This article provided you with a deep dive on how to create and leverage the value of KPI's in SAP Sales and Cloud. Measuring and monitoring business performance or a team / individual performance is critical for an organization’s growth. The best practice is to ensure that KPIs align with the strategic goals and objectives of an organization and evolve as the business grows. Additionally, the indicators chosen to measure the KPIs should have sufficient data to make the analysis reliable and accurate.

The analytical capabilities in SAP Sales Cloud are amazing, and if used wisely you could efficiently improve the standard business processes and bring in discipline to the business users to use the right best practices and link relevant transactions together to get more insights into the business data.








Overlay