Photo of Jennifer Chisholm and Tasha Westinghouse, Microsoft.

Power BI solution addresses FX pricing issues at Microsoft

The challenge

Microsoft uses foreign exchange rates for its products worldwide, translating US dollar prices into global prices in more than 70 local currencies, impacting tens of billions in revenue per product and channel across its commercial and consumer businesses. To manage financial risk and maximise revenue, the company closely track the variance between market FX rates and its Microsoft pricing FX rates to maintain global Cloud pricing parity. Previously, multiple reports and various Excel files were being used; each team tracked various FX rates individually by product and/or channel. All FX rates were managed separately, and FX solutions were considered on an individual channel or product basis.

“As we took steps to standardise and aggregate FX information, the individual reports became too large. There was a risk of end-users not receiving file updates, and basing decisions on stale FX related information; Azure and Power BI were essential to solve this,” explains Jennifer Chisholm, Business Program Manager.

At times FX rates became out of sync, and areas that needed solutions were not managed as there was no awareness of the issues. Opportunities would arise where a grey market was created. Arbitrage grew, in which purchases were made in one currency and sold into another. The objective was to create a secure, single source of FX truth that would always display updated FX information and would be accessible to all required users while keeping data confidential. The reports were moved from spreadsheets and input into an automated Power BI on Azure, enabling customisable reporting with real-time updates.

The solution

The automated Azure Power BI foreign exchange reporting solution created a single source of FX truth for product segments and channels, across commercial and consumer businesses. The ability to quickly identify the breadth and depth of FX issues, and appropriately implement targeted solutions across the company has significantly increased efficiency and decreased costs related to the previous methods. The FX reports are updated automatically and show trends over time. There is no need to search for reports or excel files, and no need to clarify which products or channels are specified in the reports. Real-time Azure Power BI reports enable users to understand the impact of foreign exchange changes across segments, and quickly translate that into impact across each area. Users are alerted to any significant changes through online reporting and automated email alerts. Since the impact is more easily identified, any necessary changes can be more quickly implemented to protect revenues and prevent arbitrage. The risk of referencing outdated or incorrect information is eliminated. Security and confidentiality are significantly increased; only users who need the data are enabled to access the reports. Users can reference FX rates for their own segment and look across segments for a holistic view across the enterprise.

Best practice and innovation

Given the volatility created by Covid over the past two years, the oil price war in 2020, and the current Ukraine crisis, the ability to pinpoint regional and specific country issues and provide targeted solutions is essential. To understand the breadth and depth of issues and be able to solve them at a corporate level rather than by individual finance or product teams has greatly increased efficiency and decreased costs.

Key benefits

• Headcount savings.
• Process efficiencies.
• Increased automation.
• Risk mitigated.
• Improved visibility.
• Errors reduced.
• Manual intervention reduced.
• Increased system connectivity.
• Future proof solution.