BDA Accordion Rolling Forecast: Marrying Top-Down and Bottom-Up Approaches 

Designed to scale seamlessly across Entity, Account, and UD1–UD7 dimensions, our product is a versatile solution catering to a myriad of functions and processes. 

However, echoing the timeless wisdom of Uncle Ben to Peter Parker, “With great power comes great responsibility.” This adage holds true for Planning & Budgeting implementations as well. The product’s ability to accommodate up to 7 UDs introduces the prospect of exponential growth in scale and complexity, which, if not managed effectively, could render the entire process counterproductive and stands as the focus of this post. 

In addressing a similar challenge faced by one of our clients, who had to navigate a landscape with: 

• Over 8000 Cost Centers 

• Up to 5 UDs being leveraged for various Planning processes 

• Millions of potential dimensional combinations 

We at BDA took pride in our problem-solving approach. Rather than compelling the client to compromise their processes for results, we harnessed the power of Accordion’s trend-based Bottom-Up planning methodology, injecting a Top-Down perspective. 

The following narrative delves into the intricacies of how we achieved that.  

Note: This post uses GolfStream as the reference app with mock data. 

How: Trend/Method Assignment

Summary POV Selection: In this methodology, users or administrators have the autonomy to choose a Trend/Method and then apply a Growth Rate based on higher-level parameters such as Cost Center 

In the user interface, as illustrated in the screenshot, the selection process involves choosing between four categories(parents) of Cost Centers hierarchy, 

bypassing the need to navigate through a list of 25+ base Cost Centers. This streamlined selection process marks the initial step, offering a user-friendly and efficient way to engage with the planning process. 

Method/Rate Assignment: To fill in placeholder intersections, admin/superusers can seamlessly select the appropriate Trending method and the corresponding Growth Rate to overlay across Forecast, Budget, and LRP. The dashboard provides a visual guide by populating Current and Prior Year Actuals, serving as a reference to focus planning efforts on accounts with existing data. 

Upon completing this configuration, users can propagate these assumptions down to individual Cost Center levels at the click of a button.  

The solution navigates through combinations of base Cost Centers for the selected parent, ensuring identical Method/Rate assignments. To maintain a robust system, a built-in checks-and-balances measure has been implemented. This mechanism selectively applies configurations only to intersections with data in PY and CY, mitigating the risk of data explosion issues and enhancing the precision of the planning process.  

Accordion Planning: Upon completion of the prior step, the Accordion Dashboard gets pre-loaded with Methods/Trends and Growth Rates for valid Cost Centers with actuals. 

Wondering about the value of pushing down uniform trends/rates? Enter the Manual Override feature. While the initial aim was to enhance end-user productivity through a one-time setup by SuperUsers or Admins, the Manual Override feature introduces a layer of precision and fine-tuning. Beyond streamlining selections and clicks, users can now exercise manual control for added accuracy. 

To illustrate this concept further, let’s delve into an example: 

Consider Account 2000_300, which is initially configured with a Trailing 3 Month Average and 3% Growth Rate applicable for Forecast – a setup commonly used by the majority of Cost Centers. However, Marketing exhibits superior accuracy with a Trailing 6 Month Average and a 2.5% Projected Growth Rate over the calculated average for this account. 

With Accordion’s Manual Override feature, the planner can easily update these values for Cost Center: Marketing specifically. Upon clicking save, the Forecast is precisely revised for that specific Cost Center, offering a tailored and more accurate projection reflective of its unique characteristics. This flexibility ensures that planning parameters can be fine-tuned to accommodate the nuances of individual entities, enhancing overall accuracy in the forecasting process. For those wondering how the Mar 2011 can be accurate with just 2 months of actuals and Trailing 6 Month trending method of choice – Accordion Rolling Forecast fetches data from PY actuals for the remaining 4 months (Sep 2011 – Dec 2011) to compute the 6 month average! 

Accordion maintains a clear distinction between assigned values and overrides to prevent inadvertent loss of work during a re-run of the Method Assignment process. In the case of Cost Center: Marketing in our example, where an override was applied for Forecast and its Rate, a subsequent admin re-run won’t revert the Trailing 6 Month Average back to Trailing 3 Month Average or the Rate to 3%. However, for Budget and LRP, where no overrides were made at the Cost Center level like in the case of Forecast, they will continue to be revised by the Method Assignment process during subsequent updates. This approach ensures the preservation of user-defined adjustments while allowing for consistent updates where no overrides exist. 

Clean Slate: Upon completing a cycle, circumstances may necessitate a revision of the assigned Trends/Rates due to market factors, evolving business conditions, or management’s desire for a different projection in the next cycle. To facilitate such instances, the product includes a feature that allows admin/superuser to comprehensively cut across all overrides and re-assign all cost centers with a fresh set of Trends/Rates for Forecast, Budget, and LRP. This functionality provides flexibility for dynamic adjustments in response to changing business requirements and strategic considerations. 

Click here if you would like to read about BDA’s Accordion Rolling Forecast. 

That’s all for now!  

Credits to Ashwin Manthena for conceptualizing it and thanks to Amar Randhawa for encouraging me to write my first blog for BDA.