Use case: Forecast to meet the original budget

This use case describes how to forecast for the remainder of the financial year.

The business problem

Forecasting for the balance of the financial year is important in organizations where it is expected that incurred costs must not exceed budgeted costs and even more so when it is difficult to accurately predict the seasonal allocation of such costs.

 Example:  A classic example of this is the forecasting of marketing expenses. Usually, the Marketing Department has an annual budget for marketing spend. However, it can be very difficult to plan in advance for precisely when the marketing costs will be incurred. What is required is to create a forecast for the balance of the year.

The solution

Use a calculated Version and the InfoFlex process to forecast for the remainder of the financial year.

The benefits

Once a Version has been created to contain the forecast data for the balance of the year, there are two easy-to-populate, relevant (for example, Marketing) accounts with data so that the annual forecast costs are the same as the budgeted costs.

InfoFlex will populate multiple (potentially thousands of) accounts with data. Although InfoFlex is very powerful, it is easy to use and the calculations always run on the Server.

How it's done

  1. In Model Manager, create a new calculated Version that subtracts Actual from Budget.

    Because it is a calculated version this will not create any extra values in the cube; the values will be calculated on demand. This Version can be called BA Delta.

  2. In Process Manager, create the InfoFlex process that will perform the calculations.

  3. In the Common Dimensions tab, use Accounts and Organization.

     Note:  The combinations of selected members determine the number of calculations that take place. For example, if 50 Accounts and 100 Departments are selected, the calculations will be made for all 5,000 time vectors.

  4. In the Source/Target Members tab, use Time and Version as follows:
    • The Source Data members are the Total Year and BA Delta (the calculated Version that you created in step 1).
    • The Target Members are the Forecast Time Periods and the Forecast Version.
  5. In the Data Transformation tab, for the Target data write options, select Overwrite existing data.

  6. In the Time Spread tab, choose a suitable Time spread option.

    After running the InfoFlex process, the data for a selected Account/Organization combination appears as follows:

      Total Year Q1 Q2 Q3 Q4
    Budget 950 150 250 300 250
    Actual 500 175 325    
    Δ BA 450* -25 -75 300 250
    Forecast 950 175 325 245* 205*
    *450 is allocated to the forecast time periods.