BI Consulting Group White Paper

A Simple Rolling Forecast in Hyperion Planning

by David Hong BI Consulting Group

The Rolling Forecast is a Helpful Business Planning Tool.

In a time of economic uncertainty, companies are looking for more ways to eectively plan and adapt to ever changing business climates. To combat this uncertainty, a commonly occurring practice is the implementation of a rolling forecast. A periodic outlook or re-forecast is advantageous because your annual budget often becomes outdated once the rst month or quarter of actuals becomes available.

The Challenge.
We will assume that our current Hyperion Planning application is only designed to accommodate an annual plan. In order to facilitate analysis on current data and allow for time sensitive decision making, management has decided to implement a rolling forecast into this same Hyperion Planning application. The goal is to have a monthly re-forecast performed in the current year, starting after the load of each months actuals. Our companys scal year follows the standard civil calendar.

A Rolling Forecast is an Updated Plan Based on the Most Current Actual Data.
The re-forecast is based on current information, new assumptions, and provides the ability to make more informed decisions. These forecasts are not done to the same level of detail as the annual budget so the time to prepare them is shorter.

Solution Step 1 - Essbase Substitution Variables.

The rst item to address is making sure the appropriate substitution variables are set up in Essbase. A substitution variable is a placeholder for members that change regularly. Substitution variables can be set up for the current month and current year. As those values change, you make the update in one location instead of having to go to every input form, report, and calculation to make the updates. In the case of a rolling forecast, this makes application maintenance much less time consuming.

Building a Rolling Forecast in Hyperion Planning is a Fairly Common Practice.

Within Hyperion Planning, both data inputs (re-forecast of future periods) and reporting (mix of actual months and forecast) are aected. Application administrators need to facilitate dynamic dimension member updates and create calculations that address the rolling functionality. This white paper addresses the steps required to create a simple rolling forecast in a Hyperion Planning application.

Solution Step 2 - Essbase Substitution Variables.

The next item to address is the web data input forms. A key to this design is setting the forecast scenario to the correct period and year range. This ensures that only forward-looking periods are open for input. continued >>

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BI Consulting Group White Paper A Simple Rolling Forecast in Hyperion Planning Essbase Substitution Variables (continued).
One drawback to this method is that there is not a true rolling eect with actual periods rolling up to forecast on the same form. Unfortunately, there are not range functions available to set column period parameters. Here are a few recommendations that can be used as a work-around for this issue: 1. Include the scenario dimension in the page with Forecast and Actual as choices (Fig. 1). 2. Create a composite web form with the second grid containing actual data (Fig. 2). 3. Create a custom menu that links to a Rolling Forecast Report (Fig. 3). continued >>

Figure 1

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Figure 2

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Email info@biconsultinggroup.com

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BI Consulting Group White Paper A Simple Rolling Forecast in Hyperion Planning

Figure 3

Step 3 Calculations.
Calculations need to be updated to accommodate the rolling forecast. The key is that you focus on proper data intersections. If forecast data is based on a trend of historical data, you need to be sure the source contains a pointer to the actual scenario and the destination has a pointer to the forecast. Or, if you need to calculate an annual summation of actual and forecast data, the sum formula will need to properly add actuals from January to the current month plus forecast from current month +1 to December. Calculations dier for every company and industry so its not a topic that can be adequately covered here. The best practice is to focus on the proper data intersections. Another best practice is the usage of substitution variables, as this is extremely helpful.

Step 4 Reports.
Rolling forecast reports have a mix of Actual and Forecast columns. For a report with a single year rolling forecast, you only need to dene two columns (Fig. 4). The rst one would point at the Actual scenario, Final version, and January to the Current Month substitution variable. The second column points to the Forecast scenario, Working version, and Current Month Oset by 1 substitution variable using the relative function. One caveat is that this will not work if the current month is December, but its assumed that a 12 month - single year forecast would not be run in December because you have 12 months of actual data.

continued >>

Figure 4
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860 Blue Gentian Road Suite 290 Eagan, MN 55121

Tel 866.953.4757

Email info@biconsultinggroup.com

Web www.BIConsultingGroup.com

Copyright 2009, BI Consulting Group, LLC. All rights reserved. No part of this material may be reproduced, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopy, recording or otherwise, without written permission from the authors

BI Consulting Group White Paper A Simple Rolling Forecast in Hyperion Planning

When complete, you should have multiple buckets for each of your planning processes. You will most likely have a set of Annual Budget web forms and reports with corresponding sets of folders. You would also have a set of Budget Calculations. After implementing a rolling forecast, that process would then have a set of associated items as well. From an organizational standpoint, its a cleaner approach and makes it easier for end users to understand. In summary, this is an ecient and eective way to build a single year rolling forecast. Rolling forecasts that cross multiple years become a more complex due to the change in year also being factored into web forms, calculations and reports.

About BI Consulting Group

BI Consulting Group (BICG) is Oracle's premier consulting partner focused exclusively on Oracle Enterprise Performance Management (EPM) and Business Intelligence (BI). Service oerings include consulting services, support, and education. The experts at BI Consulting Group have successfully completed some of the most complex implementations of Oracle BI in the world. Along the way, BICG has been honored with the Oracles Above and Beyond Award for Business Intelligence and the Oracle Excellence Award for the creation of innovative and standards-based technology solutions. BICG has also been named the #1 consulting rm for customer satisfaction by VendorRate.

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860 Blue Gentian Road Suite 290 Eagan, MN 55121

Tel 866.953.4757

Email info@biconsultinggroup.com

Web www.BIConsultingGroup.com

Copyright 2009, BI Consulting Group, LLC. All rights reserved. No part of this material may be reproduced, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopy, recording or otherwise, without written permission from the authors