TM1 Forum

Hi all,

Could you please share your expert knowledge in helping me identify difference between 'Forecasting' and 'What-If Analysis' in TM1. According to me both sounds similar as it lets user predict the future (or reality) without actually experiencing it.

Please guide.

Thanks

A forecast is where you plan/expect your business to be, it should not include anything that is deemed "unlikely".

What if analysis is purely theoretical and can be based on changing a forecast OR prior actuals e.g. what would have happened last year if we hadn't landed that big client or what would happen next year if 1 of our factories burnt down... admittedly its likely to include something more reasonable than that but it doesn't have to.

Neither of these things are specific to TM1.

Thanks Declanr for your reply.

declanr wrote:A forecast is where you plan/expect your business to be, it should not include anything that is deemed "unlikely".

So, am I correct in saying that users can do their forecasting on a separate 'Version' element whereas for what-if we can use the Sandbox feature to let users create on-the-fly scenarios?

ViRa wrote:So, am I correct in saying that users can do their forecasting on a separate 'Version' element whereas for what-if we can use the Sandbox feature to let users create on-the-fly scenarios?

What if analysis is one key use of sandboxes but "what if analysis" means many different things to many different people; Bob may just want to know what would happen if the cost of milk he purchases for his chain of coffee shops went up by 1p a pint in which case a sandbox would probably suffice whereas Sarah may have been tasked by the board of directors with producing an analysis of "what if we opened 12 new stores this year as opposed to the 6 we have forecast"; this is something she needs to share and make visible to other users so a sandbox may not suffice.

IBM will have a particular concept in mind for it, business partners may have a different idea, company A thinks one thing and company B thinks it's another. At the end of the day the basic concept if seeing what impact it would have on the model if you put one number in a particular cell etc but overall you would really need to ask your end users or customer/client what it means to them and what they really want to see when they say "what if".

Another way to think of this is:

You can use 'What-If' analysis to fine tune your forecast.

Meaning, you can use the What-If techniques to review outcomes that get you to your final goal. So then, a forecast is an outcome, and 'What If Analysis' is a technique. So Forecasting, then is the process of getting to a Forecast outcome, which may include using What-If analysis, or may not. What-If analysis may not result in a Forecast.

Thanks Declanr and Blackhawk for sharing your knowledge.