Dynamic Business Modeling

Chad Bachman04/11/11 version 1.0

Key Summary Points to Cover◦ What exactly is “Dynamic Business Modeling”?◦ How does it benefit an organization?

How do Dynamic Business Models differ from simple pivot tables and full blown Business Intelligence (BI) systems?

What are the guidelines?◦ Focusing on the major structural items

2Dynamic Business Modeling

by Chad Bachman

They meet a broad array of business needs◦ Management Reporting

◦ Standardized analytical tools

◦ Consolidating distinct data into cohesive output

◦ Simplifying complex calculations

Specific examples can include:◦ Budget Models

◦ P&L Actual/Forecast Models

◦ Pricing/Business Cases

◦ Foreign Exchange impact calculations


by Chad Bachman

“Dynamic” is a methodology in which…. ◦ Changes to underlying data will automatically change output

views

◦ Drop-down list boxes will allow users to filter output views in real time

◦ Established requests for input will allow for a degree of customization within standardized models

“Dynamic” means:◦ Automation drives everything from updates to applied filters

◦ As little manual input from the user as possible (and easily identifiable when needed)


by Chad Bachman

Business Models allow us to…◦ Achieve Standardization across multiple users◦ Simplify and streamline complex calculations◦ View desired output in various useful ways

“Dynamic” accomplishes…◦ Increased speed associated with Rollouts or Updates◦ A Reduction of potential errors (with less manual effort)

The end result allows executive leadership to make timely and informed decisions


by Chad Bachman

Pivot Tables are often useful when used in conjunction with a Dynamic Business Model◦ They are great viewing tools for sorting and filtering

information from a single data source

Dynamic Business Models can accomplish much more than Pivot tables because they can…◦ Pull information in from various separate data sources

◦ Contain data input cells that drive the output presented

◦ Achieve consistent format standardization

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Even if you company already has a great Business Intelligence (BI) tool that can produce reports, you probably still need dynamic business models to…◦ Incorporate several BI reports as data input in order to produce a

desired output view◦ Achieve additional functionality such as forecasting or ‘what if ’

analysis◦ Meet the specific needs of vital yet unique user groups, such as

Global or Federal groups

Dynamic Business Models that are viewed as extremely beneficial for one group can often be incorporated into the broader corporate BI platform


Although the preceding summary may be sufficient for some, the remaining presentation may provide further clarity as to what Dynamic Business Modeling can achieve

My intention is to update (and revise) this document over time, and through feedback◦ I have listed the major “structural” guidelines at this team, and

plan to eventually add “minor” guidelines and tips

Think of the guidelines as a successful strategy to a game, or a proven solution to a problem◦ This is by no means the only way to accomplish a end result


by Chad Bachman

“Concatenation” of data is the starting point◦ This means that we are linking (or stringing) data together◦ The lowest level of underlying data needs to have a unique

identifier This “lowest level” needs to be determined up front

“Unique” simply means that there is not a duplicate match

For Example: ◦ Output needs to show various arrangements of

Geography, Business Unit, Department, and P&L components◦ This means that every piece of underlying data has to have its

own unique concatenation string◦ ie. “Japan BU1234 DeptXYZ Revenue”


How do we go about accomplishing this?◦ Underlying data should not need to be manipulated or

reformatted This takes unnecessary effort and the potential of errors over time

will increase with multiple data sources

Paste Brio pulls, Essbase queries, or established reports as is into separate, clearly identified tabs

◦ Concatenation is accomplished pulling in the data tab (or tabs) into a “Calculation” tab Concatenation can be accomplished in a column (or columns) to the

left of the data being brought in

Any major formatting or manipulation of the data should also be accomplished in this tab

Structural changes that may occur in the future to the undying data can often be accommodated by making modifications to this tab


User Interface is the front end of the Business Model◦ Management reporting, Analytical tool, etc◦ This can also be thought of as the “Output View”◦ Regardless of the end user requirement, The information presented needs to be easy to understand

i.e. “can it easily be put on Power point slide?”

The complexity should be behind the scenes…

The end user should see simplicity

◦ Building in dynamic functionality into the output view tab will allow users to modify the information presented to them in real time


Input cells on the Output View allow users to perform “what if” scenarios◦ A input cell requesting a dollar amount is a perfect example

i.e. “100” is typed into the cell, and the established model recalculates accordingly

The location of a required input cell needs to be clearly identified

The format of the input needs to also be clear (i.e. $Ks)

◦ Numerous input cells should probably be moved away from the Output View and put on a “Start Page”

This is useful if the business model is intended to be a standardized tool that allows for the unique requirements of numerous users


Dynamic functionality on the Output View◦ Drop down list boxes allow users to filter the presented business

model in real time This also eliminates potential errors, as formatted choices are

predetermined

The existence of more than one drop down list box allows for greater choices in how the information is presented

◦ For Example: One drop down list box contains Geographic choices (ie Global, North

America, Asia, etc)

Another drop down list box contains Department choices (ie All Depts, Dept123, Dept456, etc)

A user can go from an overall global view to Dept123 in Asia instantly


Once you have the Calculation tab consolidating data, achieving any additional calculations, and in the necessary format, you need to be able to draw appropriate data into the User interface◦ This means that you will have hidden columns containing

the Concatenation strings in the rows being utilized

◦ The Concatenation strings will be linked to the dynamic input cells and drop down boxes so that the Concatenation strings will change accordingly

◦ Output View cells presenting financials will contain formulas such was Sumif, Vlookup, and Hlookup


The formula driven financial cells in the Output View will reference the hidden Concatenation string on the same tab and the Concatenation strings and appropriate data on the hidden Calculation tab

Example:◦ Through your input cell inputs and/or list choice box

selections, a hidden concatenation string on the Output view changes to “EMEA CostCenterX Salaries”

◦ A Formula in a financial cell might then look for “Q1” EMEA salary data associated with cost center X on the calculation tab


Dynamic Business Modeling:◦ Allows for information from diverse sources to be

compiled, calculated, and presented in useful ways

◦ Allows users to easily control the selection and calculations associated the Output View through input opportunities and filter choices

◦ Provides an exceptional tool that provides management with the opportunity to make sound business decisions

Please feel free to contact me with questions or comments related to this topic


Dynamic Business Modeling

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