Cognos Top Down and Bottom up Planning(adaptive technique).

[karan2345]

Hi Guys,

Is it possible in TM1 to have a adaptive planning approach where the user can do top down planning as well as bottom up planning.

I have a requirement for the Sales Budget where the user would feed in a Sales Number say his sales would be 50M for the year X and this will be spread across all the sales parameter
(Customer , Market, Product Line, Item Sales Group, etc) using last year Actual %, now the user wants to tweak the % for certain product lines and customer class as he thinks that it is not realistic. The decrease or increase should reflect the total sales projected initially (50 M in our case).

I don't know how is this possible as all my cells at the bottom level is rule driven using a sales figure entered by the user.

Request someone to let me know if anybody has experience for such kind of an adaptive planning.

[tomok]

If you can't figure out how to do something in TM1, do a draft of how you would want it to work in the form of an Excel spreadsheet and THEN translate that into a cube design. A TM1 cube is a lot like an Excel spreadsheet, it just has more then two dimensions and the rule syntax is different. You're going to have to show a little more effort for me to provide assistance.

[karan2345]

Yes Sir, I am currently working on the excel spreadsheets to see how can that fit into the requirement.

However I also wanted to know if do people in the organisation use this kind of technique to do planning, first top down and then tweak the number from bottom and go up..to change the figures orginally provided?

[lotsaram]

Yes Sir, I am currently working on the excel spreadsheets to see how can that fit into the requirement.

However I also wanted to know if do people in the organisation use this kind of technique to do planning, first top down and then tweak the number from bottom and go up..to change the figures orginally provided?

I would think top down "seeding" of the budget followed by bottom up adjustment and re-phasing (within the bounds defined by top down) is a fairly common approach. Certainly not an unusual requirement and one that can be fairly easily met either with spreading or using TI to copy between versions.

[karan2345]

Yes Sir, I am currently working on the excel spreadsheets to see how can that fit into the requirement.

However I also wanted to know if do people in the organisation use this kind of technique to do planning, first top down and then tweak the number from bottom and go up..to change the figures orginally provided?

I would think top down "seeding" of the budget followed by bottom up adjustment and re-phasing (within the bounds defined by top down) is a fairly common approach. Certainly not an unusual requirement and one that can be fairly easily met either with spreading or using TI to copy between versions.

Thanks, Yes it is a common approach but For Example I predict my Sales to be 50000 next year and it should break down as per the Actual % of the previous year across all the region.
So For Eg the breakdown goes like this
East 15000
West 10000
North 20000
South 5000

Now the Region manager of North says that he wont be able to do this amount of Sales and he would be able to do 15000, so the number at the top should be 5000 less (i.e 45000) which contradicts the Sales Budget approved by the top level management.

I thought ideally 5000 should spread out across the rest of the region in proportion.

Hi,

Tomok,

I have got the solution to how to make it work using the spreadsheet.

I was more concern if the requirement is valid, as I am not a functional guy.

[Steve Rowe]

I don't think we can answer if the requirements are valid, you will have to ask your client.

Typically though if North is planning not to meet their target you wouldn't automatically add this to other regions plan since they would not have agreed to meet this new target.

You may be better off with a top down sales target that shows the sales manager what is expected and a bottom up budget that indicates what the sales manager think they can achieve. The planning process is then about understanding and possible filling the difference between the two versions of the plan.

If you start with a top down plan that is repalced with a bottom up plan you hide the planning process and end up in a bit of a mess about the origin of the numbers.

CHeers

[paulsimon]

Hi

Essentially you can do this with two versions, + an override version.

Version 1 is the top down, eg the Sales Target in Steve's example, then Version 2 is the Bottom up Budget.

The Rule for Version 1 is the top down allocation.

The Rule for Version 2 takes the numbers from version 1, unless over-ridden eg

Version 2 = N: IF( Version Override <> 0 ,
Version Override ,
Version 1 ) ;

(The above isn't exact syntax, but if you have written the first rule it shouldn't be too difficult)

Another approach would be to use Turbo Integrator to do the spreading, or just use Cell Spreading. That will give you the initial values, which you can then edit bottom up. That approach would overwrite the original allocation. However, if you need to retain that, then just use two versions.

Regards

Paul Simon

[karan2345]

Hi Paul,
Thanks for the help
However I cannot use the approach suggested by you because the user doesnt wants to use 2 versions here.

A figure which will be the overall total will be feeded in by the top management which would go down till the bottom using some % across different dimensions..

Then the bottom level users would see if the goal is achievable and change there % at the bottom level and if there is any resulting change because of this, then it should reflect up at the top level with the changed value
For Eg: Top management says Sales is 1000k for the year
Now this gets divided across region
East 50 % => 500K
West 50%=> 500K
Now the manager in the West says i would not be doing 50% i will do 40 % so the value would change to 400K now the top figure should be 900K.

[lotsaram]

I cannot use the approach suggested by you because the user doesnt wants to use 2 versions here.

A figure which will be the overall total will be feeded in by the top management which would go down till the bottom using some % across different dimensions..

Then the bottom level users would see if the goal is achievable and change there % at the bottom level and if there is any resulting change because of this, then it should reflect up at the top level with the changed value
For Eg: Top management says Sales is 1000k for the year
Now this gets divided across region
East 50 % => 500K
West 50%=> 500K
Now the manager in the West says i would not be doing 50% i will do 40 % so the value would change to 400K now the top figure should be 900K.

Hate to break it to you but if you don't use 2 versions in this case then you lose track of the starting point from top management and can no longer report on the variance between the original top down plan and the committed to bottom up plan and the process would then lose integrity with the likelihood that no one would want to own the budget numbers and commit to signing off on them. I believe this is the point that Steve already made.