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Requirement

Finance can make topside adjustments that cascade in a user-defined method through lower level detail

Functional Area

Planning

Industries
All
DETAILS

Description

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.

Example Use Case

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.

Considerations

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.

Questions to Ask a Vendor

  • Degree of Flexibility: How flexible are the settings for topside adjustments? Can we define and customize how the changes will cascade through lower-level details?
  • Pre-Built Methods: Do you have a collection of pre-built topside adjustment methods that will cascade according to that rule without writing formulas?
  • Fixing Mistakes: What if we make an adjustment to a group of dimensions by mistake? How do we back out potentially thousands of adjustments?
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