Creating an independent model on-demand within the Corporate Performance Management (CPM) software allows a user to focus on specific portions of a plan to avoid duplicating a large model. This modeling capability gives users the freedom to work with one set of data while focusing on one purpose without the hassle of managing a potentially enormous amount of dimensions, data, attributes and so on.
Scenario: A bakery uses CPM software for financial planning. The need to monitor seasonal revenue fluctuations to plan for inventory and lead times.
Solution: The CPM software's modeling tool allows users to isolate the revenue component from their overall financial plan. Users can then create specific models that analyze revenue trends and patterns over various seasonal periods. This allows planners to stay focused on one aspect of the model, freeing them from maintaining the expenses data and associated complexity.
This functionality is most common in CPM tools that focus primarily on financial modeling, and not basic budgeting. In other words, modeling-focused tools are designed to support complex financial and operational modeling, allowing users to simulate different business scenarios and forecast impacts on financial performance.
Products with a focus on budgeting emphasize the creation, management, and execution of financial plans and budgets, and are architected to streamline the budgeting process. In short, one is more free form, and the other is more process oriented.
If you are evaluating a tool that is heavily modeling-focused, and another that is budget-focused, one of those vendors should be removed from the evaluation. It is important to understand your priorities before beginning the evaluation process.