About Scenario Rollups

Combine multiple Strategic Modeling (*.alc) models to form a single model to better analyze your enterprise. Strategic Modeling helps determine how changing business unit conditions affect parent company earnings and values. After reviewing the rolled up model, you can make informed decisions about individual business units.

You can roll up business unit information such as method, scenario, time period, subaccount detail, and organizational levels.

Business unit models do not require matching structures—they can have different scenarios, time periods, forecast methods, subaccount structures, residual value methods, currency denominations, and treatments for debt/interest and taxes. You may include models with incomplete financial structures, such as corporate files containing only general expenses and fixed assets. There are some restrictions on rolling up data.

Identify the information for analysis before deciding what to roll up to determine business unit details and the manner of rollup. For example, if you are considering divesting a portion of a business unit, you would want to roll up 100% of the earnings and the balance sheet amounts up until the transaction date, roll up the unsold portion of the unit after the transaction date and you would enter the child model twice, with the appropriated time periods selected for rollup.

For optimizing scenario rollups:

• Parent models should never forecast variables accepting input based on funding options results.

• To optimize rollup speed at the cost of storage, activate Store outputs for all accounts in Scenario Manager for each model to avoid recalculating unchanged values.

Scenario Rollups

You can create scenario rollup structures in Strategic Modeling. Scenario rollup structures represent organizational structures, where each department of a company has a child model or business unit file, and the values from all are rolled-up, or added-up, into a rolled up parent model.

The rolled up parent model (rolled up parent, scenario rollup file) becomes the root of all child models in the structure, and data from the child models are rolled up into the parent when the scenario rollup is run. This gives you the overall financial picture of an organization.

For example, say you have a manufacturing company with West Coast regional operations. You could have a parent file or model called West Coast for the root of the structure, and files or models for departments such as Accounting and Manufacturing as children, so their numbers are rolled-up into West Coast to give you the total numbers for the whole region.

Limitations

To ensure data integrity, scenario rollup structures allow only one data representation per model, no matter how many scenario rollup structures share each model.

For example, a scenario rollup structure called West contains child models Accounting and Manufacturing. Purchasing is a child of Accounting, but you want to create a copy to see what happens if Purchasing rolls into Manufacturing. You cannot do this on the service, because moving Purchasing into a second scenario rollup structure breaks the first structure.

Note:

Use scenario rollup labels to create variations of scenario rollup runs within the service.

Selecting Scenario Rollup Parent Models or Files

The first step in scenario rollup is selecting or creating a scenario rollup parent, which is the model or file receiving the rolled up data. The scenario rollup file determines the time period and account structure, so all business units' time periods should match, as should the fiscal year ends of the scenario rollup and child models. If time periods are different, create a rolled up parent including all relevant time period detail and account information.

Rolling Up Scenario Rollups

The full scenario rollup method adds output values from business units to produce output values in the rolled up parent. Strategic Modeling calculates each file before adding the values to the rolled up parent. Input values in the rolled up parent is calculated based on output values from the child models and the forecast method selected in the rolled up parent. For example, if you roll up two business units containing forecast data for Sales in the below table, if each unit's previous period sales was $100:

Table 11-1 Sample rollup

Business Unit	Input	Output	Forecast Method
Business Unit #1	10%	$110	Growth Rate
Business Unit #2	$125	$125	As Actual Value
Rolled Up Parent	0	$0	Growth Rate

After rolling up, the Sales account in the rolled up parent reflect the growth rate necessary to achieve the sales total of the two business units combined. In this example, you need a growth rate of 17.5%to achieve the additive sales value of $235.

Business Unit	Input	Output	Forecast Method
Rolled Up Parent	17.5	$235	Growth Rate

Most rolled up accounts are calculated like this. There may be occasions when the additive process does not apply. For example, User Defined Accounts are typically used for non-currency items such as inflation rates and price/quantity relationships—the additive rollup process would yield meaningless results. Such accounts are candidates for blocking, so you can manually enter data in the rolled up parent—see Excluding Models from Scenario Rollups.

There may be accounts in the child models that should not be included in the rolled up parent. To eliminate an account completely, you include it in an elimination group

Entering Data in Scenario Rollup Parent Models or Files

When accounts are blocked, they are not included in the scenario rollup. You can manually enter data for those accounts in the rolled up parent for calculating output values of blocked accounts.

Tree View

The Tree View display the same information, but with variation:

• Model Tree

  The model name.

• Business Case/Scenario

  The active Business Case/Scenario in the model is for the current scenario rollup.

• Method

  The method for rolling up the model—see Method Used in Specifying Child Model Characteristics.

• % Ownership

  The percentage of its value each individual account contributes—see Ownership % of Selected Model in Specifying Child Model Characteristics. For example, at 50% only half of the listed account value contributes to the scenario rollup.

• Status

  Models have these possible states:

  • Rollup

    The scenario rollup needs to be run.

  • Working

    The scenario rollup is processing.

  • Calc

    The model is calculated.

  • Change

    The model has changed.

  • Ready

    The scenario rollup is complete.

• Perform a task:

  • To deselect excluded models—Select a model, right-click on the model, select Exclude, and then deselect the following option: From the Parent Scenario and From All Parent scenarios

  • To excluded models—Select a model, right-click on the model, select Exclude, and then select the following option: From the Parent Scenario and From All Parent scenarios, and the models are displayed as follows:

    Tree View—Excluded models display [Excluded] by the model name.

Using Model Scenarios in Scenario Rollups

For each scenario rollup structure, you select which scenario a model contributes. For models with different scenarios in multiple scenario rollup structures, model changes require you to rerun only those scenario rollup structures using the changed scenario.

Running Scenario Rollups

After building scenario rollup structures and assigning model characteristics, you can run scenario rollups, Setting Up Server Scenario Rollups, and Working with Scenario Rollups.

To run scenario rollups:

1. In Smart View pane, select the Strategic Modeling, and then expand Scenario Rollups node.

2. Right-click on the structure name, and then select Open.

3. In Model Tree, select a parent model, and select Scenario Rollup tab, and then click Run.

   • Models display the Working status as the scenario rollup processes.

   • A Scenario Rollup Completed prompt and a Ready status displays.