Using the AI in Power BI to do root cause analyses

How can finance functions add more value? It’s a challenge accountants and finance professionals in business and industry increasingly face.

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One way to boost efficiency and productivity is by speeding up financial root cause analyses with artificial intelligence (AI) tools in data analytics software Microsoft Power BI. These tools can do in minutes what takes hours with Microsoft Excel. But switching gears can be daunting, so here’s an interactive, step-by-step example to get you started.

Imagine we’re accountants in the finance department of Pro Flight Grips Inc., a fictitious company that manufactures grips for recreational products for customers across North America. The company has three product lines — plastic, cord (rubber with cord fabric for moisture absorption), and regular (rubber) — and it manufactures and sells the following products: golf grips (full-cord, half-cord, and cord grips for putters; regular swing club grips; and grips without seam), ski handles, and tennis racket grips.

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While preparing financial statements for top management, we notice a significant drop in sales in a month that typically shows more robust demand. How do we quickly determine the underlying cause of this problem in anticipation of management’s questions?

Historically, this question might have taken hours or days to investigate. Now, data analytics assisted by AI can quickly provide a summary and detailed analysis in a fraction of the time.

In the example of Pro Flight Grips, we identify possible causes at a high level with the help of Power BI’s AI “Analyze” feature, then investigate further at detailed levels using Power BI’s “Decomposition Tree.” We include the use of Power BI’s “Key Influencers” to determine possible means of recovery and conclude with the use of the “Smart Narrative” feature to quickly summarize various findings.

While this article uses the AI capabilities found in Power BI, other data analytic products such as Tableau, MicroStrategy, and Qlik may work as well.

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GETTING STARTED WITH POWER BI

BI In a real-life scenario, we would start the analysis by importing data into Power BI (see how in the March 2020 JofA article “Power BI: An Analytical View”). To follow along in this walk-through, do the following:

■ Download the file  “Power BI Income Statement Data Example.pbix.” (If you have trouble downloading this file, try right-clicking on the link and selecting the “Save link as…” or Download File option.) 

■ Open Power BI Desktop. (A free version of Power BI Desktop is available, if necessary.)

■ Open the sample data file.

• Click the ”Open” icon (shown in the red circle in the screenshot ”Opening the Sample Data File in Power BI”).
• Find and open the downloaded Power BI file. To do so, look at the bottom of the “Open” section and click ”Browse this device” (shown in the red box in the screenshot ”Opening the Sample Data File in Power BI.”) to access the file explorer.