Is Corporate Modeling part of your planning process? If so, do you do it in Excel?

Tagetik CPM software solution for Modeling

 

 

Starting this year Gartner will be breaking out their Magic Quadrant for Corporate Performance Management (CPM) into two separate quadrants, one for Financial CPM and one for Strategic CPM. Gartner documents several reasons for making this change but one of the major ones is the increase in modeling as part of the financial and business planning process. What modeling is and how companies do it can certainly vary, Gartner defines it as:

Corporate modeling  is the building of models or abstract representations of business events or sets of events. Modeling typically involves a mathematical model that may use iterative calculations designed to represent the performance of a set of business activities, scenarios or projects. It can be thought of almost as a playground in which to determine the likely result of a set of business events.  

Source: Corporate Planning and Modeling Solutions Revitalize Traditional Budget, Planning and Forecasting. Gartner, December 2015

 

Typically this type of modeling is done on financial or operational data and often at a very granular level and isn’t manageable in Excel. For example, in banks it might be done for modeling profitability and cash flow at the individual financial instrument, branch or financial advisor level; or in telecommunications to model at the region, plan, and customer level. In large companies these types of modeling require millions of lines of data and applying financial calculations to the lowest level of detail.

  • Do you currently do this type of detailed “what-if” modeling as part of your planning process? 
  • If so, what type of modeling are you doing?
  •  If not, is it because you don’t see the business need, don’t have the time, or don’t have access to the necessary data? 

 

I’d love to hear your real-world take on the topic.

 

Tagetik CPM software solution for Modeling 

Share this post!