IBM Cognos TM1, Planning Analytics

“The What?” Yeah, the ‘Hover Car of Corporate Planning’!

As I said in my last post, you’ll all think I’m nuts. But hear me out. I’ve likened a traditional spreadsheet based budgeting model to a German Beetle. Rebuild a traditional budgeting model with a tool like TM1 and you’ve got an Italian Prancing horse. It’s really fast, incredibly powerful, and is often a supercharged version of the spreadsheet model. Take this supercar and upgrade it into a hover car so that it flies, literally. It’s still a car, but completely reimagined.

 

Infocube’s Hover Car transforms your use of TM1 for corporate planning in a similar way. We connect it to your existing TM1 planning model and plug in the Actual and Forecast versions with live data from it. We work with you to calculate the relevant drivers and ratios to derive your entire model based on those source versions. And then we present you with an updated model where you can pull levers, adjust drivers and ratios to do complex what-if analysis on the model.

 

A powerful what-if model

Hover Car can be a what if model for CEOs and CFOs, where you can make adjustments and do scenario analysis before getting the business to rework their plans in response to your analysis. It can be used privately for this analysis or shared in open sessions for budget reviews and discussion.

 

Examples of Hover Car in Action

In a traditional TM1 model you might have Labour, Capex, Gross Profit, Opex and P&L cubes. Labour might be built up by person, with a feed from Payroll. In the Hover Car we could take the total labour cost and the number of full-time employees (FTEs) for a department. You would then be able to tweak the number of staff in a department and/or the average cost per FTE to adjust total labour costs.

 

In another example, let’s say you’re a senior executive wanting to do a scenario analysis with Gross Profit. You could take the possible bottom-up build by Product Group and change either the revenue growth or margin percentage and see what the effect would be on GP. As a sanity check, you could compare your Hover Car versions with those built up by your business managers. If there are significant variances, you’d get your managers to review their submissions to close the gap as much as possible.

 

Hover car is an analogy for an enhanced, driver-based corporate planning model that gives you the same results as a conventional corporate plan but with the power and flexibility to easily do scenario analyses. It’s the perfect tool for CFOs, CEOs and senior executives.

 

If you’d like to know more about how you could hover above your budget, get in touch!

John Vaughan

John Vaughan is a highly experienced Accountant and Consultant. He has experience in the pharmaceutical, FMCG, distribution, professional services, manufacturing and financial service industries. With over 25 years of commercial experience and 20 years working with the Cognos products, he...

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