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Requirement

Formulas may be applied to a specific cell or be shared globally

Functional Area

Administration

Industries
All
Tags
Formulas
Calculations
DETAILS

Description

Formulas and calculations functionality in a Corporate Performance Management (CPM) software provides the capability of applying mathematical equations to cells or datasets within the system. A formula may be applied to one cell as a standalone calculation, or be saved into a formula database for use elsewhere.

Example Use Case

Scenario: A software company needs to create a one-off scenario to better understand CLTV (Customer Lifetime Value) for a specific customer due to a pricing negotiation. If the calculation is useful, they may want to re-use it in future pricing negotiations with large customers.

Solution: By setting up formulas in the CPM software, the company calculates CLTV for this large customer by factoring in the quoted contract term, purchase price, and projected upsells during the term, along with all the SKUs that this customer currently owns and will renew. This calculation helps drive decisions about maximum discounts. They decide to save the formula into their master listing.

Considerations

We include this as a requirement because many products do not allow a formula to be inserted into a cell as a one-off. This is because, for some systems (especially OLAP), the cell is a result of a calculation that takes place on the backend. This means that the cell itself is just a value that cannot be manipulated outside of simply entering in a single number. In other words, inserting a one-off formula into a sheet is not always possible.

Most buyers take this functionality for granted and neglect to ask, leaving them in the lurch once they begin to actively use the system.

Questions to Ask a Vendor

  • Insert Formula: Who can we add a formula, in a one-off manner, to a cell in a sheet?
  • Re-Using Formulas: If we create a useful formula, can we save it to a master list for use later?
  • Overwriting: If we do something like breakback a value, or apply a global driver that affects that cell, will it overwrite the formula? If so, is there a way to prevent that?