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Driver Based Forecasting February 12, 2016 Carla Cwiertnia ©2016

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  • Driver Based Forecasting

    February 12, 2016

    Carla Cwiertnia


  • Finit EPM Services

    Page 2

    Full Cycle Implementations


    Dedicated Support

  • Why is Finit here?

    Page 3

    Finit takes pride in being a company of makers and Doers; people who dig in and get their hands dirty

    We make and deliver personalized financial reporting solutions and experiences

    Not Company to Company, but Person to


    By listening, questioning, and analyzing

  • The Finit Family

    Page 4

    Fully aligned with our clients, not just bottom line $

    No debt or external ownership

    Work with Finit employees, no subcontractors

    Compensationbased on CLIENT SATISFACTION





  • Finit Values

    Page 5

    Our values on which we ask you to provide consultant feedback:

    Approach & Collaboration

    Integrity & Honesty

    Client Betterment

    Self Betterment

    Colleague Betterment

    Finit Betterment

    Work Effectiveness

    Impact & Innovation

    Proactiveness & Passion

    Service Solutions Betterment

  • Finit Customer Success

    Page 6

    Our values, culture, and approach to becoming a trusted advisor to our

    customers has led to

    100% customer success

    for every Finit client (250+) and for every Oracle Hyperion project (500+)

  • Some Finit Customers

  • Questions

  • Upcoming Webinars

    Page 9

    February 19th - What would happen if I HFM: greatest hits and disasters

    Chris Barbieri

    February 26th - Intro to Planning Part II

    - Cindy Eichner

  • 2016

    About the Presenter

    Page 10

    Carla Cwiertnia

    [email protected]

    15 + Years Experience with Hyperion Planning and Essbase

    Member of Planning and Essbase Practice Team

    Member of Finit Answers Team

    Oracle Hyperion Planning and Essbase Certified Consultant

    Loves Hawaii!

    mailto:[email protected]

  • 2016


    Page 11

    Driver Based Forecasting

    Challenges and Types of Drivers

    Key Steps in Creating a Driver Based Forecast

    Driver Based Forecasting Examples

    Contact Information and Future Webinars

  • Driver Based Forecasting

  • 2016

    What is a driver?

    Cause and effect

    What an organization does

    Align with business processes

    Inputs not outputs

    May not be controllable

    Page 13

  • 2016

    How do we use drivers?

    Budget / Plan / Forecast

    Revenue Analysis

    Cost Analysis

    Profitability and Pricing

    Risk Analysis

    Strategic Decisions

    Process Improvement

    Page 14

  • 2016

    What is driver based forecasting?

    Identifying key metrics

    Global Drivers

    Local Drivers

    Model impact of variables

    Focus on areas that drive success

    Page 15

  • 2016

    What are the benefits of driver based forecasting?

    What if Scenarios for changing drivers

    Focus on what drives the organization

    Standardize forecast process

    Predict labor expenses more accurately

    Create forecasts more easily

    Page 16

  • 2016

    How will Drivers Improve Forecast Accuracy?

    Manage changes efficiently

    Provides consistency

    Update forecasts quickly and more often

    Strategic advantage

    Page 17

  • 2016

    Challenges and Types of Drivers

  • 2016

    Challenges to Driver Based Forecasting

    Identifying key drivers

    Differing Opinions

    Determining the number of drivers needed

    Identifying the level of detail required

    Page 19

  • 2016

    Types of Drivers

    Labor Cost Drivers Headcount

    Tax Rates

    Benefit Rates

    Unit Drivers Pounds

    Units Sold

    WIP Units


    Sales Drivers Gross Sales


    Revenue %

    Net Sales

    Margin %

  • 2016

    Types of Drivers (contd)

    Occupancy Drivers Square Footage

    Price per Square Foot

    Financial Drivers

    # of Transactions

    Market Share / Attrition

    Technology Drivers



    # of Computers

    # of Servers

  • Key Steps in Creating a Driver Based Forecast

  • 2016

    What drives revenue and cost

    Metrics for overhead

    Apply rates and caps

    Use brackets to apply rates

    Standardize the forecast process

    Key Steps in Creating a Driver Based Forecast

    Page 23

  • 2016


    Units / Volume

    Supply & Demand



    Fixed Cost

    Variable Cost Labor


    Key Drivers of Revenue and Cost

    Page 24

  • 2016

    Key areas of overhead IT


    Human Resources

    Overhead often gets allocated by these methods:



    Units Sold

    Labor Hours

    Drivers to Plan for Overhead

    Page 25

  • 2016

    Overhead expenses are often associated with headcount

    Drivers to Plan for Overhead (contd)

    Page 26

  • 2016

    Travel Driver Examples

    Travel Expense Drivers Type Domestic, International, etc.

    Average Cost per Flight

    Average Cost per hotel night

    Average Cost per rental car day

    Airfare Expense = Average Cost per Flight * number of flights

    Hotel Expense = Average cost per hotel night * number of nights

  • 2016

    Travel Driver Examples (contd)

  • 2016

    Travel Driver Examples (contd)

  • 2016

    Using Drivers to Apply Rates and Caps

    Labor Drivers Benefits Rate

    401K Rate

    Merit Increase Rate

    Payroll Tax Rate

    Medicare Tax Rate

    Social Security Tax Rate

    Social Security Tax Cap

    Medicare Tax Cap

    Unemployment Tax Rate

    Unemployment Tax Cap

  • 2016

    Using Drivers to Apply Rates and Caps

    Social Security Tax = If YTD Gross Income

  • 2016

    Income Tax Brackets Salary Cap and Rate Drivers

    The Income Tax Rate applied depends on Base Salary

    Driver Brackets

  • 2016

    Proactive vs. reactive

    Align drivers with actual processes

    More efficient and quicker to make changes

    Standardizing the Forecast Process

    Page 33

  • Summary

  • 2016


    Page 35

    Drivers are what the organization does

    Identify key metrics and get consensus

    Model how processes are impacted by variables


  • Contact Information &Future Webinars

  • 2016

    Thank You for Attending!

    Page 37

    Todays Presenter:

    Carla Cwiertnia

    [email protected]

    General Questions:

    Greg Barrett

    [email protected]

    Joe Mizerk

    [email protected]

    Copy of the slides or Recording:

    Email us for a copy of the slides or a link to the recording

    [email protected]

    Past webinars:

    Follow us on Twitter for updates:


    mailto:[email protected]:[email protected]:[email protected]:[email protected]://

  • 2016

    Upcoming Webinars

    Page 38

    What would happen if I HFM: Greatest Hits and Disasters

    Friday, February 19th, Noon ESTChris Barbieri

    Intro to Planning Part IIFriday, February 26th, Noon EST

    Cindy Eichner