Dimension hierarchy changes can be configured from a specific date forward

Description

This function allows changes to the underlying dimensions of a financial model, such as a chart of accounts or list of departments, to retail historical data after being modified.

Example Use Case

Scenario: A mid-market manufacturing company has recently expanded its product offerings and entered new global markets. The financial team needs to update the chart of accounts to reflect these changes and monitor the performance of these new products and markets more closely.

Solution: With CPM software that allows hierarchy changes, the financial team can easily configure the chart of accounts from a specific date onwards (say, the start of the fiscal year). The new account hierarchy includes accounts for new products and international markets, enabling more nuanced tracking and reporting. Historical reporting is unaffected.

Considerations

This is very helpful when a company is growing and continues to evolve its dimensions, accounts, fiscal year mapping and so on. It can be complex no matter the system.

Some vendors will suggest an alternate hierarchy be created for the new format, simply inheriting its data from the former hierarchy. Other vendors will require a new instance of their product be purchased along with a new implementation. Be very clear with the vendor on your confidence in the stability of your dimension setup as you grow. Nobody likes a re-implementation.

Questions to Ask a Vendor

• Change Configuration: How can hierarchy changes be configured in the software from a particular date forward? What happens to the historical data?
• Impact on Model: What are the potential negatives to going through this exercise? Will we cause reporting challenges, formula problems, or any other issues?