This functionality allows finance teams to make overarching changes that automatically filter down to finer budget details using a formula or method that they define in the model.
Scenario: A large retail company, in the middle of its annual budgeting process, has a new sales forecast that predicts a significant increase in revenue. The finance team needs to adjust the budget accordingly, increasing various cost items and investments in line with the new forecast.
Solution: With cascading topside adjustments in their CPM software, the finance team can increase the overall revenue budget figure, set the defined method to adjust associated costs based on profit margin on specific retail locations, and have these changes automatically reflected across lower-level budget details like product category, department, region, etc.
If this is offered at all, it will likely be limited to a proportional cascade of whatever the change is. User-defined topside adjustment methodologies can be very sophisticated similar to the scenario above, or could be based on other factors like revenue growth, labor burden, strategic importance and so on. Not all of these are easily captured in a calculation.
As with proportional topside adjustments, it is important here to be able to initiate the topside at sub-levels of detail. For example, if we're making a topside adjustment based on strategic initiatives, we may want to do so within product groupings, individual products, specific retail locations, etc.