Version of the budget can be created that shares some data with other versions, but not all

Description

When building what-if scenarios for a budget or forecast, the system must centralize information dictated by the user, while allowing other information to be editable in the various scenarios. This allows the users to easily maintain scenarios, and avoid duplicative efforts as the year goes on.

Example Use Case

Scenario: A mid-market company uses their planning software to create 10 what-if budget scenarios related to their revenue forecast. As the year progresses, they use those versions as a baseline for their rolling forecasts. This requires them to roll forward 10 separate budgets. It also requires them to edit their workforce plan in 10 different places as employees come and go despite the workforce plan having nothing to do with the revenue forecast.

Solution: The company uses a feature in the planning platform that allows them to create a new version of the budget that shares a workforce plan with the main budget. Whenever updates are added to that workforce plan, they are inherited by the various versions. Financial Analysts may now modify the various revenue forecast scenarios without also editing 10 different Workforce plans.

Considerations

This particular feature is not only a time saver, but it protects the data integrity of your rolling what-if forecasts. Imagine if your new actuals data rolled in but was not applied to a version. Or what if you revise the forecast to hire someone next month, but now have multiple scenarios to edit. You forget one, have no way of knowing, and now the forecast is off.

The requirement goes beyond sharing a workforce model. It could be anything, like sharing all the CapEx, or revenue, or a collection of forecasted accounts.

Managing multiple versions separately defeats part of the purpose of leaving Excel to move into a system. Dig into this if you plan to use the tool for heavy scenario modeling.

Questions to Ask a Vendor

• Version Creation Flexibility: How do we select which parts of the model will be shared with the various scenarios? What are the limitations?
• Shared Data Synchronization: What happens when new actuals come into the system? Does it update all the versions in the same manner?
• Flexibility: Can each version share a unique part of the core model compared to others? Can a version share part of another version?
• Reporting and Analytics: Does your software provide comprehensive reporting and analysis features that can extract and compare data from different budget versions?