How does a TBM engine handle allocations? Bill explores the topics of Drivers and Allocations in this story.  

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“Hey, Bill. There’s something I wanted to go through with you.” Ellie Nakamura was Bill’s TBMA counterpart in Finance.

“Sure, Ellie. What is it about?”

“I’m going through the TBM certification process, and yesterday I came across allocations and drivers. It would seem pretty innocuous, but as I went through the learning materials, I got stuck.”

“What exactly was the issue, Ellie?”

“In one of the case studies, I needed to set up an allocation path for a new metric, and didn’t know how to proceed. I can show you if you have a minute, Bill.”

“Sure, let’s look at it together.”

“Allocation lines are straightforward: I defined a path from the Cost Source object to Vendors. I filtered the data in Cost Source to look only at line items where the Is Vendor column equals ‘Yes’. I selected the Vendors object as the target and set up data relationships according to our data: Vendor ID and Cost Center must match on both sides.”

Ellie tapped on the screen and showed the model section to Bill.

Fig. 1 - Sample logic for allocations

“Yes, Ellie. That looks good.”

“I then tried to build something to move budget and forecast numbers up the model. The metrics already exist in the model, so I just assumed it would be a matter of enabling the path across the relevant objects in the model. Alas, nothing flows. I get zero values for both metrics.” 

“Let’s look at the source of your data, Ellie. It sounds like a bucket issue.”

“Buckets? Like in the nursery rhyme There’s a Hole in My Bucket?” Ellie rolled her eyes.

“Not quite, but yes, it would seem that your buckets of money have a hole in them.” Said Bill, smiling. “I would say that it’s not that you’re losing the proverbial water, like in the song, but rather that the buckets never get filled. That’s how a former TBM coach of mine used to describe the process: we need to define something that will fill the bucket with… money, so that it can flow further down the line through the pipes. The former is what we call Drivers, while the latter are Allocation Lines, as we saw before.”

“I have enabled the allocation lines from Cost Source to the Business Units object, so that they will carry the Budget and Forecast metrics, but it still doesn’t work.” Said Ellie and handed her tablet to Bill. “See for yourself.”

Bill looked at the tablet and said. “Yes, I can see that the metrics are empty. See? None of the boxes to the left of Cost Source have values for Forecast. I take it the same happens with Budget.”

Fig. 2 - Empty buckets for the Forecast metric

“Let’s look at those lines, Ellie. I would expect to see a driver for each of the metrics.”

“Why is that?”

“Well, the source for Actuals, Budget and Forecast should be different. This is not a tool requirement, but a logical consequence of the metrics themselves: Actuals change every month and are only available until the last month we have closed.”

“I see, Bill. Budget and Forecast numbers are available for the entire year.”

“You can see that none of the drivers show active for the Forecast metric, so let’s define a new one. Where is your source data for the Forecast?”

“I have a table with the forecast that I get from the planning system. It has numbers by budget line.”

“Have you added that data to the master data file for Cost Source?”

“Yes, Bill. I appended the file to the backing table, mapping the fields as comprehensively as I could.”

“Good. Let’s add a Driver for the Cost Source object then.”

Ellie tapped on the Add Unit Driver button. The system opened a dialog to configure the driver.

“OK, I see it knows that I want to create something for the Forecast metric. That’s a good start. It’s asking me to select a source for the data. Which one should I pick, Bill?”

“One option is Column, meaning that the data itself has the value for each line item. Is this your case, Ellie?”

“Yes, I believe so.” She tapped on the Column item and selected Amount. “It seems to work: now I see money flowing from that driver into the Cost Source object. But wait, the numbers look wrong, they are way too big!”

“It’s probably because it’s picking up every line item in Cost Source, be it for Actuals, Budget or Forecast. You’ll have to set up a filter.”

“Ah! I see what you mean. Let me go back to that configuration dialog.” She tapped on the screen again. “There it is. I need to select the column that describes the type of metric, and leave only the ones for the forecast.” She closed the dialog and waited for the engine to recalculate. “There it is. Those look a lot more reasonable.”

Fig. 3 - New Driver for Forecast data

“Indeed. You see that the forecast numbers are flowing to the next objects in the allocation chain. Great job, Ellie!”

“Yes, I guess I filled the bucket with water, and now it’s flowing through the pipes.”

“I take it you now know how to do the same for the Budget metric.”

“No problem, Bill. It’s a piece of cake now.”
#drivers #bill the tbm guy #allocations

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(c) Guillermo Cuadrado, 2021

All characters and events in this article are fictitious and any resemblance to organisations, locations or real persons, living or dead, is purely coincidental.

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