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Currency Conversion objects

The Currency Conversion object is used to convert monetary values from one currency to another. Documents in any ERP system are often stored in the currency that was being used while each transaction was being made. For example, if a business was selling goods to Chinese customers, the document would be recorded using Chinese Yuan while a different deal with US customers would use US dollars. This is often also aligned with sales offices that a business may have throughout the world. If the company wants to display the overall balance, they need to convert everything into a single reporting currency.

How the Currency Conversion object works

First, remember that the Currency Conversion object is a completely separate object within the Celonis Common Data Model (CCDM). This object is loaded into the model with no connections or relationships to other objects. This is because it is not an object that fits into a process analysis, but rather an object that functions solely to convert one currency to another and sits outside of the process flow.

With the Currency Conversion object, users can change the analysis to use whatever target currencies they need. There is an option inside the data transformation to define the currency conversions, including the exchange rate between currencies, the time during which this combination of currencies and exchange rates was active, and which currencies are being converted.

ocdm_curr_conv_obj.png

This includes multi-system support and can support multiple exchange rate types if necessary. By default, the primary key is composed of a target currency, exchange rate type and a single system, but can be extended to fulfill all of those to scale. Using the corresponding CURRENCY_CONVERT operator with properly filled parameters allows those actions to be performed.

This means that not only is the core exchange rate considered, but if a customer’s data has a different exchange rate defined, that definition can also be used. This allows Currency Conversion in the data model to be independent of any converted values and does not restrict the users to a single converted value. In Studio, the users can convert the values to whatever target currency they would like to use.

If you set up multiple systems, depending on the target currency, there may be a different need of target currencies within the company. A smaller department may want to display analysis in a local currency while the global dashboard may want to use US dollars. As a result, the decision of what currency is being targeted lies with the data engineer that defines a set of target currencies, and then selected by the data analyst in Studio.

Sample currency conversion scenario

Consider a scenario where a company has three systems:

  • Sys1 operates in AUD

  • Sys2 operates mainly in USD

  • Sys3 operates mainly in NOK

The company wants to analyze everything in USD, so If the Currency Conversion object is not present, then Sys1 cannot be analyzed. The object then needs to translate into a common currency before it is translated to the target currency.