Many Revelwood clients have allocations models within their IBM Planning Analytics environment. Some – like those we highlighted in a recent webinar – have complex and/or unique approaches to their allocation models.
During the webinar we received several questions. Here are a few of them.
Q: You mentioned a few different definitions of personnel as a driver. What does that mean?
A: Personnel can be defined in different ways with the main detail being the amount of time each person works. This is sometimes referenced as Headcount vs FTE (full time equivalency). For example, if I have a person that works 50% then headcount will be 1 and FTE will be 0.5. If I have two people that work 50% each then headcount will be 2 and FTE will be 1. The decision for you to make is based on how you want to define “a person” … by physical entity or by the amount of time they are working.
Q: What are some of the drivers you have seen customers use and what do you recommend?
A: Some examples include IT departments allocating costs based on the number of computers in service and the number of support calls received, fixed leasing fees allocated based on the number of cars for the department and the number of miles driven. I have also seen “units” defined as units produced, units sold, and units shipped. The best answer I can give is that there is no generic best answer since the choice of driver is based on what is best for your organization. Remember that the ultimate goal is to assign costs to areas that benefit from the cost, so the question to ask is “how do they benefit?”
Q: You showed us some customer examples, each of which had their own allocation models. Does an allocation always need a full set of cubes and scripts?
A: This depends on the type of allocation. In situations where you are fully reassigning a single cost to a single target then a rule will work great and will probably be easier to create. In situations where you may need to perform a loop (e.g., calculate an allocation percent) then I recommend using Turbo Integrator to create an allocation script and/or model.
IBM Planning Analytics, which TM1 is the engine for, is full of new features and functionality. Not sure where to start? Our team here at Revelwood can help. Contact us for more information at email@example.com. And stay tuned for more Planning Analytics Tips & Tricks weekly in our Knowledge Center and in upcoming newsletters!