Adam Sand explains the "three pillars" of business metrics—revenue (volume/vanity), profit (conversion/reality), and cash flow (timing/sanity)—and argues that a data model must capture all three: total revenue volume, how revenue converts to profit, and when cash actually arrives in the bank account.
Revenue is vanity. Profit is reality, and cash flow is sanity. Let's look at that through the lens of a data model. Volume is total volume of revenue. It's a goal, it's vanity. But the conversion of that revenue to profit is reality. It's how much money are you really making? But all that really matters is when do we get that cash in our bank account? The time that it takes, the objectives that we have in terms of our goal to get that money into bank account, that is reality. So, so we have to answer all three of these things with our data. So we have to create this in our data.
