Alpine Ski House Sample Application Guide

Microsoft Corporation

September 2007

Applies to:

PerformancePoint Planning

Summary: This document provides a conceptual overview of the process that is needed to build a PerformancePoint Planning application. The sample application, in this case, was created for the fictitious multi-national corporation, Alpine Ski House (ASH).

This documentation is updated on a regular basis. To obtain the most current version, go to PerformancePoint Server on Microsoft Office Online (

Information in this document, including URL and other Internet Web site references, is subject to change without notice. Unless otherwise noted, the companies, organizations, products, domain names, e-mail addresses, logos, people, places, and events depicted in examples herein are fictitious. No association with any real company, organization, product, domain name, e-mail address, logo, person, place, or event is intended or should be inferred. Complying with all applicable copyright laws is the responsibility of the user. Without limiting the rights under copyright, no part of this document may be reproduced, stored in or introduced into a retrieval system, or transmitted in any form or by any means (electronic, mechanical, photocopying, recording, or otherwise), or for any purpose, without the express written permission of Microsoft Corporation.

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Table of Contents

Alpine Ski House Sample Application Guide

Introduction

How to Use This Guide

Sample Application Known Issues

Chapter 1 - Alpine Ski House, Fictitious Company

Alpine Ski House and their Mission Statement

Key Company Data

Legal Ownership Structure

Debt and Equity Structure

Product Lines

Currency History

Sales and Marketing

The MWCM Story

Alpine Ski House FY2005 and Beyond—Strategic Business Objectives

Chapter 2 – The Move to PerformancePoint Planning

How Does ASH Plan, Budget, and Forecast Now?

Alpine Ski House Reporting Requirements

Alpine Ski House Root Model and Model Subsites

What Model Structure did ASH Decide to Adopt?

Alpine Ski House Data Environment

The ASH PerformancePoint Planning Application Implementation Process

Step 1: Installation and Initial Setup

Step 2: Create the Alpine_Ski_House Application in the Administration Console

Step 3: Add Users and Assign Permissions

Step 4: Define the Calendar (Fiscal Year)

Step 5: Create Model Subsites, User-Defined Dimensions, Dimension Member Properties, and Member Sets

Step 6: Create New Models in ASH_Corporate and Define Dimensions and Member Sets

Step 7: Create New Models in ResortMgmt and Define Dimensions and Member Sets

Step 8: Create New Models in Manufacturing and Define Dimensions and Member Sets

Step 9: Synchronize with the Application Database

Step 10: Populate the Staging Database

Step 11: Validate Dimension Data in the Staging Area Database

Step 12: Load Dimension Data in the Application Database for the ASH_Corporate Model Site

Step 13: Load Member Sets for Dimensions in ASH_Corporate

Step 14: Synchronize All Dimensions for the ASH_Corporate Model Site

Step 15: Validate Model Data

Step 16: Load Model Data in the ASH_Corporate Model Site

Step 18: Edit Model Properties for ASH_Corporate, ResortMgmt and Manufacturing Financial Models

Step 19: Deploy All Model Sites

Step 20: Create Roles and Assign Users

Step 21: Create Excel Forms

Step 22: Create Cycles and Assignments

Step 23: Create Rule Sets and Rules

Step 24: Deploy All Model Sites

Chapter 3 - Alpine Ski House Budget Process

HR Model (HR Rates and HR Headcount)

Corporate Costs Model

Revenue Model

Expenditures Model

Resort Mgmt Reporting

Corporate Mgmt Reporting

Chapter 4 – Additional Resources: The Application Design Guide and Application Design Worksheet

Introduction

This document provides an overview of the PerformancePoint Planningsample application that was created for the fictitious multi-national corporation, Alpine Ski House (ASH). PerformancePoint Planning is part of Microsoft® Office PerformancePoint™ Server2007.

When you install the PerformancePoint Server Alpine Ski House sample application, the complete and fully functional ASH sample application and accompanying data is installed automatically.

Use the information in this document to familiarize yourself with the high-level requirements and procedures that are necessary for a successful implementation of your own PerformancePoint Planning Server application.

Important:This guide is intended to provide a conceptual overview of the process that is used to build the ASH sample application. It does not provide step-by-step directions for recreating the sample application.

Sample application files and data are on the product CD. After you browse the product CD and locate the .msi file, run it on the computer on which you plan to install the sample application and data files.

How to Use This Guide

The first section of this guide provides a profileof the Alpine Ski House Corporation, including a description of the company mission statement, legal ownership structure, debt and equity structure, and other background information.

The second section discusses the factors behind ASH’s decision to move to a PerformancePoint Planning Server solution, the structure ASH decided to adopt when creating the ASH sample application, ASH’s data-integration process, and provides an overview of the application implementation process used by ASH.

The final section provides a sample budget process as followed by ASH using the ASH sample application.

For comprehensive step-by-step instructions and additional conceptual information about building your application, refer the online Help that is available with PerformancePoint Planning Administration Console, PerformancePoint Planning Business Modeler, and PerformancePoint Add-in for Excel.

Note:The ASH sample application is provided as an example. Your company's mission, structure, data, and objectives may be very different from those of the fictitious Alpine Ski House.

Sample Application Known Issues

See the PerformancePoint Planning readme file for known issues.

Chapter 1 - Alpine Ski House, Fictitious Company

Alpine Ski House and their Mission Statement

Alpine Ski House (ASH) is a holding company for a large, multinational ski resort operation, Alpine Ski House Resorts (ASHR). Alpine Ski House Resorts owns total or partial interest in several resort properties in the United States, Canada, Germany, France, and Japan. Alpine Ski House also owns 27 percent interest in a German bicycle manufacturing company(MWCM) and is exploring the possibility of acquiring a controlling interest inthe company.

Note:The ASH sample data and application assume that the date of Planning Server application design and implementation, and the start of actual planning, begins in September 2004, the end of the fictitious ASH's fiscal third quarter. The sample data reflects this scenario, as do the dates for their short range forecasting (Q4 2004) and budgeting (for the full year 2005) and their long range strategic planning (FY2005 through FY2009).

To begin the planning process, ASH must first complete the forecast for the fourth quarter of 2004. When the forecast is complete, the Finance department will have the data it requires to prepare the five-year Strategic Plan, which will set the general direction of the company and validate key assumptions. The Strategic Plan will provide the business with key objectives, such as growth and profitability, which will become targets for the Corporate and Resort entities during the planning process. Another key outcome of the Strategic Plan will be a decision about whether or not to purchase a controlling interest in MWCM. For the Strategic Plan, ASH will create two models: Strategic Plan and Strategic Assumptions.A separate Manufacturing Strategic Planning process will also be createdto furnish the data required by the ASH Strategic Plan.

The process for creating the Corporate Forecast and Budget are nearly identical. The biggest difference is that the Forecast is created monthly and the Budget is performed once a year. Both are centered on three key areas: headcount, capital, and operating expenditures. During the development of the PerformancePoint Planning Server Alpine Ski House application, the planning team decided that,because of differences in dimensionality, headcount should have its own process, and capital and operating expenditures could be combined into a single process. After the Corporate processes were complete, some of the corporate costs would be allocated to the Resorts and others would remain in Corporate.

The individual resorts also forecast and budget Headcount, Capital, and Operating Expenditures. In addition, the resorts budget revenue and cost of goods sold (COGS).After the resorts complete these processes, the derived output values are merged into a single “Resort Management Reporting” process, which will allow the Alpine Ski House Resorts management the opportunity to review a combined, complete budget and forecast for Alpine Ski House Resorts.

The combined budget and forecast for Alpine Ski House Resorts are then merged into the Corporate Management Reporting model, enabling corporate management to review a complete budget and forecast for Alpine Ski Houseand enabling the strategic planners to determine if the company’s strategic objectives have been met.

Separate from the Planning process, ASH will also usePerformancePoint Planning for their new external financial reporting cycle to produce quarterly and annual financial statements for shareholders (using the External Corp Reporting model).This will allow the Company to prepare their consolidated financial statements more consistently.

Key Company Data

Major Industry / Hospitality
Ancillary Industry / Bicycle Manufacturing
2003 Sales (last complete year) / $231M
Country / USA
Reporting Currency / US Dollars
Fiscal Year Ends / December 31
Number of Employees / 987
Share Types / Privately held
Total Shares Outstanding / 100,000
Closely Held Shares / 100,000

Legal Ownership Structure

As shown in the following diagram, ASH, which reports in US dollars, owns MWCM and the five country-based resort holding companies, each of which, in turn, own their respective resorts:

  • 27% of MWCM (reporting in Euros)
  • 100% of U.S. Resorts (reporting in U.S. dollars)
  • Tahoe
  • Vermont
  • Colorado
  • 100% of Canada Resorts (reporting in Canadian dollars)
  • Whistler
  • Banff
  • BlueMountain
  • 74% of Germany Resorts (reporting in Euros)
  • Mittenwald
  • Berchtesgaden
  • Oberstdorf
  • 100% of France Resorts (reporting in Euros)
  • Serre Chevalier
  • Val d'Isere
  • 100% of Japan Resorts (reporting in Yen)
  • Hakuba

Debt and Equity Structure

ASH is privately owned by a small investment group in the United States. ASH started in 1991 with one resort in the United States (Tahoe) and one in Canada (Whistler), and then continued to open resorts in these two countries until 1994, when the last of the Canadian Resorts (BlueMountain) opened. Resorts in France and Japan were purchased in 1987 and the interest in the German resorts was purchased in 1999. The owners do not intend to explore the option of going public or acquiring other investors. Each resort generally obtains local, 20-year bank financing and each resort is generally able to obtain financing on 70 percent of the resort initial cost of either purchase or start-up. Repairs, maintenance, and improvements are funded out of operations.

Product Lines

Each of the Alpine Ski House resorts generates revenue through four product lines: Accommodations, Spa, Restaurant, and Retail. The following chart provides a description of each product line, the percent this product line contributes to total Revenue and Net Income, and analysis on each product line.

Product Line /
Description /
% Revenue / % Net Income /
Analysis
Accommodations / King and Double bed hotel rooms in all twelve resorts
Deluxe townhouses in Whistler, Banff, and BlueMountain in Canada and Tahoe in Colorado in the United States. / 65% / 60% /
  • Barriers to entry are modest. Zoning in resort areas is generally favorable for new resorts.
  • Fixed asset costs are high. Land and building costs are generally high in resort areas.
  • Market analysis and customer feedback has highlighted an increased demand for recreation. ASH has begun offering rentals of bicycles in the off-season.
  • There is a limited supply of potential sites for expansion.
  • Exit costs are high. Exiting this business requires liquidation of the property.

Spa / Massages, skin care, hair, and makeup / 18% / 15% /
  • The business model is maintainable.
  • Operational models are varied among the resorts—some are owned by the resort; some are leased to third parties.
  • Exit costs are low.

Restaurants / Full service restaurants, bars, and snack bars / 14% / 14% /
  • High fixed costs.
  • Assets are fixed in place.
  • Market adjustments are difficult.
  • Barriers to entry are low, because restaurant space can be more easily transferred or leased out.
  • Large margin swings.
  • Exit cost is medium.

Retail / Apparel, ski equipment, and souvenirs / 3% / (3%) /
  • Low margins.
  • Provides a value-added service to accommodations.
  • Minimal growth potential.
  • Barriers to entry are low.
  • Exit cost is so low that no exit strategy has been planned.

Manufacturing joint venture, 27% interest / Production of road, touring, and mountain bikes / Not Applicable / 14% / Not Applicable

Currency History

Alpine Ski House data uses flat exchange rates for easier data review. Therefore, there are no Currency Translation Adjustments in the Actuals data for 2000 through 2004. Instead, the currency rates for the Forecast, Budget, and Strategic Plan base case scenarios have been varied.

Sales and Marketing

ASH sales and marketing efforts for the last several years focused on the following:

  • Internet presence: ASH corporate Web site and individual Web sites for each resort.
  • A special program aimed at travel agents and travel agencies that includes customized brochures, incentive programs, and discounted accommodations
  • Travel magazine, and some general consumer magazine advertising and advertorial pieces.
  • Movie and other film-production location opportunities; to date, two major motion pictures have been filmed on location at two different ASH properties.
  • Local advertising and special promotions for local residents especially in the off-season or traditionally low-occupancy holidays, such as Thanksgivingin the US.

Upcoming efforts to differentiate ASH properties from the competition include rebranding that emphasizes that each ASH resort is an integral part of the parent company. The company has initiated programs aimed at creating a consistent customer experience and quality level at each of the resorts so that customers who have a great experience at one resort can feel confident that they will have a similarly great experience at any one ofthe other ASH resorts.

The MWCM Story

MWCM has one manufacturing plant, located in Mittenwald, Germany. MWCM sells bicycles to ASH and ASH rents these bicycles at its resorts. However, this is not considered significant to MWCM's financial results—justopportunistic marketing.

MWCM is also privately held. A local family owned 100 percent of MWCM through 1997, at which time ASH acquired a 27percent interest in MWCM. ASH acquired this interest when the family sought external ownership to expand its operations.

MWCM is funded by equity and has no long-term debt.

Alpine Ski House FY2005 and Beyond—Strategic Business Objectives

ASH corporate, after much discussion, determined that at this point of the company's life, growth profitability, and quality should be the main corporate focus. Their vision statement reflects this:

"To accelerate Corporate Growth, while maintaining rising standards for Customer Satisfaction through the effective Utilization and Expansion of Corporate Assets. To attain superior profitability, we seek to develop a competitive advantage over our rivals."

Guided by the business vision, the ASH CEO defined the following measurable financial and strategic objectives.

Strategic Goal / Strategic Objectives / Outcome Measures
Growth / Grow revenue by 3-4% annually / Year over year percentage change in revenue
Profitability / Grow net income by 15-20% annually / Year over year percentage change in net income
Bring debt/equity ratio below 1:1 / Debt / Equity
Offerings (Products) / Increase ownership in MWCM joint venture / Review the possibility of a full buy-out of MWCM

Chapter 2 – The Move to PerformancePoint Planning

How Does ASH Plan, Budget, and Forecast Now?

Currently, ASH performs all external reporting and planning functions by using Microsoft® Office Excel® spreadsheets. While everyone likes Excel, the company has encountered problems with file access and version control. The CFO has decided it is time to move to an enterprise solution and use PerformancePoint Serverto create the company’s next budget.

The ASH PerformancePoint Server implementation team engaged a Microsoft PerformancePoint Server partner to help with designing their new application. They also used the Application Design Guide and accompanying Application Design Worksheet. These resources are described in more detail in Chapter 4 of this document.

Alpine Ski HouseReporting Requirements

Alpine Ski House must produce certain external, strategic planning, forecasting and budgeting reports:

External Reporting

The office of the CFO produces quarterly and annual financial statements for shareholders. The External Corporate Reporting model was created specifically for this external corporate reporting data.