Recently, a client has asked to implement a rolling forecast model to move towards a more dynamic way of forecasting. With this as periods move forward so does your forecast. In this way you are always forecasting 12 / 18 months out in to the future.
What is a Rolling Forecast
With a rolling forecast the number of periods remain the same so as each period is traded it drops out of the forecast and another period is added. This is best shown with a diagram:
Rolling Forecasts in TM1
In TM1, this can be easily achieved using a period slider rule. To enable this functionality the user simply updates the current month string in a global assumptions cube to start the forecast. This in turn updates a rule attached to a period slider dimension. This then updates the attribute values for those months within the period dimension. The business rule attached to Cube B then pulls data from “Cube A” Actual’s based on the attribute values for those periods and populates values in Cube B for Current Forecast Periods. Note that Actual’s are against real periods in Cube A ( i.e. Dec 2011 instead of m-1, the rule translates real month Dec 2011 into an “m-x’ month and updates the period description using an alias mask being the real period name ). See Ouput below:
Turning on the Alias for the Period Description below for Cube B below:
How the slider rule works (translate sliding period i.e Dec 2011 into sliding period i.e m-1 ). See embedded pseudo code in rule below:
Output in Period_slider attribute cube:
Change Management for Rolling Forecasts
Now that you have an idea of the workings, the only real challenge that remains is to encourage/influence management to think outside the box and adopt a different way of thinking when approaching the forecast, one that I imagine is a mere walk in the park.
Enjoy! See attached for full download of above including cubes and rules.
Do You Need Help with Rolling Forecasts?
Rolling Forecasts can be tricky to set up, let alone how to guide an organisation from forecasting to the wall (as in fixed financial year forecasts) to using rolling forecasts. If you need any help with this, either from the TM1, change management or accounting, reach out. We’d love to help!
