Global performance measurement: removing the currencies painPublished: Monday, 30 March 2015 10:39 by Lincoln Goldspink, Chief Technology Officer
The world is a small place. Customers buy goods from all over the world with just a few clicks. Delivery times have decreased; take Amazon Prime for example. It's just really easy to buy stuff online from anywhere nowadays. But it isn’t as easy for those organizations selling across boundaries to get a clear picture of how well they are performing in different countries. To help our customers do just that the latest release of Celebrus V8 Big Data Engine, Update 11, adds support for currency normalization.
What is currency normalization?
Monetary values are captured at source in their native currency: this data has and will remain available. Currency normalization, however, converts the monetary values into a single base currency and provides access to this alongside the native value.
Why is it valuable?
Currency normalization is useful for three reasons:-
1. Aggregation: Visitors may purchase across different brands in different geographies hence currencies vary. Aggregating these disparate currencies using their base currency values means a single, total value can be obtained.
2. Comparisons: Being able to compare value across different geographies in a consistent form.
3. Removing exchange rate volatility: Currency exchange rates are volatile. Depending upon the nature of your business it may be beneficial to compare the performance of geographies' against fixes currency conversions, rather than ending up with comparisons which reflect the performance of one currency against another.
How Does Celebrus Help?
1. Celebrus has the concept of a system-wide base currency.
2. All input currencies are converted to this value.
3. The Profile Connector (Audience Datamart) represents all monetary values in this base currency.
4. A brand/device/geography has a default currency. If a particular transaction doesn't define the currency explicitly, the brand's default currency is assumed. For example, for a brand with both a United Kingdom and German presence defined, the default currency for the UK area would typically be GBP ₤ whilst for default for Germany would be EUR €. Both would be converted into the system-wide base currency.
5. A system-wide currency conversion configuration is provided. Currency conversions can either be provided via a lookup service, or manually entered. The lookup service available in this initial release is the European Central Bank's foreign exchange rate service https://www.ecb.europa.eu/stats/exchange/eurofxref/html/index.en.html By the way, if there is an additional exchange rate service which you'd like Celebrus to support, please let us know.
It is expected that most customers will use the manual configuration to allow performance comparisons between different geographies to be performed, without becoming tangled up in exchange rates.
Additionally, as the Celebrus event stream is enriched with the base currency value available for all monetary values, any uses of the event stream benefit, including real-time callouts to other systems such as call centers or email solutions to drive marketing actions, or data loading etc.
Multi-currency support provides a simple mechanism to remove the issues of currency exchange rate fluctuations from the performance equation in order to ensure consistent and robust business reporting across regions and over time, giving a true picture of results.