What is financial modeling?

Financial modeling is one of the most desired skill sets to have when working within finance. But the meaning and capabilities it entails have now evolved so much more from just being an Excel guru!

Traditionally, a financial model was an Excel-based tool used to forecast the financials of a business based on looking at past performance. From a basic model, much more can be built, but it still remains essential to get the foundations accurate, easy to use, scalable and flexible.

Advanced models include cash flow, mergers and acquisition and leverage buyout – and these models can cause some serious headaches. They are often time consuming to complete, and keeping them accurate can be a pretty laborious task. Fortunately, for the many who have sat battling against the limitations of using traditional spreadsheets, financial modeling has evolved.

Financial models are hugely useful, but only if the information within them is correct. It’s no secret that over 90% of business-critical spreadsheets contain some sort of error. Financial modeling has now progressed, mainly due to the different tools available aiming to make the process simpler and more accurate.

If you’re still using traditional spreadsheets it might be time to start exploring your options… you could be making your job much harder than it needs to be!

Quantrix keeps the three main components of a model separate for logical reasons. You have your separate formula pane comprising your model’s formula. This isn’t as scary as it sounds. In Quantrix, our natural language formula means you actually write 95% less formula than Excel, on average. You can clearly view the logic to your model making processes such as auditing much more efficient.

The structure of Quantrix means your models are fully scalable and flexible. Always-on pivoting enables you to easily view your data in a variety of ways with a very simple drag and drop user interface. You can also complete previously tedious and repetitive tasks with ease. Take adding a year on to a forecast, for example. With Quantrix you can do this just by just pressing one key!

Lastly, the presentation of your model can be easy to view and interpret by everyone across the business rather than just the spreadsheet ninja who built the model! A new, interactive view of your model enables your users to easily create those ‘what if’ type analyses to generate real value from your data in real time. Increasing the value of a financial model really comes from making sure your model is 100% accurate, as well as giving business decision makers the ability to use and understand the findings.

Have you ever taken a look at the value of your financial models? Chances are, there’s a lot of uncovered usefulness if you’re using traditional and now dated technology. Although there’s a catalogue of financial modeling courses now available, you should also consider a next-generation tool, such as Quantrix, which can make your financial modeling much simpler – right from the word go.

Don’t believe us? Try Quantrix for yourself with our free 30-day trial. You’ll be amazed at what you can achieve!

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The Power of Collaboration in the Qloud

My last few blog posts have discussed modeling inefficiencies when building your models. In this blog, I wanted to share some thoughts about how the practices I’ve previously written about can continue throughout your models once they’ve been built.

Firstly, we all know that frequently, the people who build models aren’t always the ones who need to use the data for analytics or wider decision making. A next-generation modeling solution should help people in different business groups understand your models and data, meaning they can make informed business decisions. Being able to create interactive presentation views to easily show findings really improves model worth and the ability to add real value to a business on a wider scale. It also improves efficiency, meaning there’s no time wasted trying to interpret findings. A hugely valuable feature of Quantrix means that users can create ‘what if’ analyses on models due to the interactive nature of presentation views without changing formulas.

Once you’ve created your model, another common challenge is keeping the same model up to date, eliminating having multiple versions of the same model and making sure it remains error free once it’s been returned. I think we are all guilty of having multiple versions of the same document – and sometimes losing track of which one is actually the most up to date version with naming conventions such as “Model 1” “Model 1 Final” “Model 1 Final 2” etc. Being able to share models easily and securely should definitely be a top priority for a modeling solution. In Quantrix, our Qloud-based system allows secure and simple sharing capabilities to ensure model validity is maintained, even when shared. You can set both user roles and permissions, meaning users only see the part of the model that’s relevant to them, as well as setting editing permissions right down to a single cell. It’s therefore impossible for someone to ‘fat-finger’ a formula and introduce errors to your model. Checking models over and over again once you’ve shared them really isn’t very efficient.

Lastly, the ability to work together in the same model is hugely valuable. Even being able to see when someone else is working on a model and having your editing capabilities paused means that everyone is always working on the latest version of the model. Taking it one step further, being able to have multiple users editing at the same time, whilst being able to chat within a model and see each user’s location means you no longer need to send models back and forth, eliminating errors creeping in and enhancing user collaboration.

Unfortunately, with traditional spreadsheets, the challenges don’t just stop once you’ve finally built your model. Instead, they carry large amounts of risk when trying to share and collaborate. These are just a few of many reasons why so many a now looking for a next-generation full modeling solution. Our Qloud solution is really simple, so simple in fact that we don’t even offer training on it! If you want to find out more about how Quantrix can help you share, collaborate and improve model value across business – please feel free to reach out.

By Holly Perry

What is Multi-Dimensional Modeling?

At dinner parties and other social occasions I attend, it’s common for the topic of discussion to end up as “work”. When I tell friends that our company makes a “multi-dimensional financial modeling tool”, I often get a quizzical look and plenty of bemused follow-up questions.

Many of our users find themselves in the same predicament when talking about Quantrix with colleagues and co-workers. In this blog post, I explain four key concepts of Quantrix in plain language to help us all do a better job evangelizing this great product we have.

Dimensions as nouns

The most important concept to grasp the multi-dimensional aspect of Quantrix. A dimension is often represented by the nouns used to describe the model you want to build. For example: We are a manufacturer of products and we want to model unit sales growth over time across the different regions we sell to. Those nouns – products, regions and time – make up the three dimensions you are going to build into your model. It becomes much less confusing and more approachable when you think of model dimensionality in this way.

Plain language formulas across dimensions

Once you have the dimensions established, then you can write formulas across these dimensions creating tremendous formula efficiency. Often, one formula can do the work of thousands and thousands of cells. Anyone can understand that maintaining one Quantrix formula, instead of thousands of spreadsheet formulas, is a huge efficiency win and greatly reduces the likelihood of errors.

Slice and dice

It is so easy to move dimensions among the three axes to get a different view of your data, all the while you have the ability to continue to model and adjust formula logic. We call it ‘always on pivoting’ – and it’s a truly powerful concept.

Data

Modelers all have a need for data, and this is usually provided through manual hand entry, csv imports or even direct feeds from large database systems. Through built in data connectors and JDBC technologies, Quantrix can hook up to virtually any data source quickly and easily with minimal IT involvement.

I sometimes hear people use the phrase “Quantrix is Excel on steroids”. I tend not to use that wording as it diminishes the power of the Quantrix application. Quantrix is so much more powerful, and easier to use, than a spreadsheet. We are a professional tool our users can use to create very dynamic data presentations and gain valuable insight… that is often simply not even possible to do in a spreadsheet.

Quantrix stands apart on its own merits.

So, the next time you have a chance to tell someone the good news about Quantrix, keep these four points in mind!

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By Michael Salisbury

Why traditional spreadsheets are unfit for developing businesses

Technology is evolving at record pace, meaning the challenge of staying ‘in-the-know’ is tougher than ever before. Not only that, but knowing which new tool is right for the job you’re trying to complete and when the right time is to update your tool set also provides a whole new set of challenges.  And to make things just a little bit harder, the data we need to manage within the tools is also growing, becoming more complex and changing regularly – and that’s without even touching on big data! So, now more than ever, is a time to really evaluate the technology you use, and see if you really are pushing traditional tools to their limits.

Within data analysis, three of the most time-consuming tasks include formula writing; error checking and auditing. Believe it or not, although necessary tasks, they are huge efficiency drains to businesses. These mundane tasks are frequently completed with technology as old as 35-years, meaning many analysts are spending more time doing work that’s not actually analysing the data. Instead, they are spending their time getting the data into a suitable, scalable, flexible and easy to understand format. This seems a little bit odd, when you consider that these tasks aren’t value adding to their business.

I know change can be scary. But change doesn’t always have to mean a challenge. At Quantrix, we understand the that your spreadsheets and data are an integral part of your business, so we want to eliminate the risk associated with change. It’s now unnecessary to rely on largely error prone, inflexible and in-collaborative tools, like traditional spreadsheets. As obvious as it sounds, having the right tool for the right job will not only improve modelling efficiency but also maximise employee productivity meaning in the long run, your analysts will be able to achieve so much more.

The cost of traditional spreadsheets goes so much further than just simply the cost of the tool itself (they are usually perceived as inexpensive as most of the time they are already on your laptop or computer)! When you look more closely at the cost of time to complete repetitive, tedious tasks, when you look at the cost of errors and the cost of limited flexibility and transparency when modelling and lastly the cost of not being able to work collaboratively – these tools actually turn out to be an extremely costly risk to your business.

Within this fast paced environment we now work in, surely eliminating risk and increasing efficiency is at the top of everyone’s agenda? If you want to look at implementing a collaborative, multi-dimensional modelling tool then do reach out. It’s far too costly to rely on a spreadsheet that could let you down at any moment.

You can request a 30 day free trial here.

By Holly Perry

Danaher acquires IDBS

On October 30th, 2017 Danaher Corporation announced an agreement to purchase our parent company IDBS and all its subsidiaries which includes Quantrix. Danaher’s operating companies operate in a diverse global science and technology organization that is committed to helping its customers solve complex challenges and improving quality of life around the world.

Through the due diligence process, Danaher gained a deep conviction that Quantrix is an amazing technology and Danaher shares our belief that Quantrix is the leading multidimensional modeling technology in the marketplace.

We can assure you that our focus and on-going commitment to you as a customer is critical to us. Therefore, your relationship with Quantrix will not change and Quantrix will continue to operate as a business unit of IDBS.

Feel free to reach out to me directly if you would like further conversations about this news and thank you for your continuing support of Quantrix.

By Michael Salisbury

Breaking the limitations of sales analytics

Sales operations reporting was traditionally only performed by practical sales managers, vying to validate the fruits of their labour (or at least justify their own salaries). Often, the types of analysis undertaken were simple and short sighted, usually demonstrating how their actions led to good results in the previous quarter, and rarely, if at all, investigating underperformance.

“They [Sales Operations] are often entrusted to represent the needs of the sales organization in meetings and cross-functional projects.”

More and more companies are creating sales operations departments within their organizations. The established sales and reporting processes are considered to be a vital contributor to business operations and accounting functions, with the operations team advocating for sales to other parts of the organization such as finance, marketing, legal and IT departments. They are often entrusted to represent the needs of the sales organization in meetings and cross-functional projects.

As the amount of information required for good reporting and insight increases, often due to the need to enable forecasts and planning, the need for a sales operations rock-star role has increased in tandem: meet the sales analyst.

“The challenges posed to simply achieving a spreadsheet with no errors, ensure that no one has the time to really deliver insightful sales analytics.”

In our increasingly fast-paced world, it can seem like the analytics and reporting systems many organizations rely on for sales and CRM analytics are too inflexible and slow. Data-whiz sales analysts spend most of their time merely ensuring that sales data is accurately collected and attempting to update ancient forecast spreadsheets. Too often we see organizations trying to manipulate a spreadsheet which was created at a time when the company only sold 15 product SKUs in North America, but has ended up as a behemoth involving all 130 SKUs and custom payment terms for their 1,000+ customers across the globe.

At Quantrix, we have worked with a large number of sales operations teams to deliver insightful sales analytics, and along the way, we have identified the main hurdles to achieving better sales insights. I’ve outlined each of them in more detail below.

Easy access to the right data

With the ever-growing mountains of data available from CRMs, ERPs, Finance and Marketing systems (the list goes on…), analysts are frequently requiring the ability to combine large datasets to gain new insights. Sadly, the legacy tools used in most organizations are inadequate for the scale and complexity needed to drive insight. Luckily, Quantrix makes the process of importing data easy. With simple drag-and-drop tools, and no need for scripting or IT support, analysts can quickly connect to internal data-sources and cloud-based CRMs such as Salesforce® using pre-built connectors. This unparalleled speed and agility frees up precious time for good analysis to take place.

Automate repetitive tasks

The ability to automate repetitive tasks, such as data import, streamlines processes across the organization. Access to the most up-to-date information for any user of the system means that organizations are no longer reliant upon a limited group of employees with the ability to perform critical data exports and consolidations.

Embrace user buy-in

User buy-in is an often-overlooked aspect of any decision to improve internal processes. The ability to provide self-service analytics in an intuitive dashboard, as well as the ability to drill down further into the data supporting the analysis, provides board members, executives, managers (and almost any other relevant function within the business), with a better understanding of the cogitations of the analysis – this understanding and transparency inevitably leads to a characteristic feeling of trust of the figures shared within an organization.  With everybody using the ‘single-source-of-truth’, companies are able to exploit market opportunities and capitalize on consensus-based decisions backed by analysis.

Exploit multidimensional modeling

You’ve got the data and you know the questions you need to answer, but how can you appropriately structure your analysis to be flexible and scalable, yet robust? We live in a multidimensional world, with organizations operating across multiple region and multiple currencies, selling a variety of products. Your models need to reflect this – analysis needs to allow for any number of different scenarios, so you’re never left wondering ‘what if?’

Businesses aren’t static, they’re evolving entities, constantly changing the products they offer and the ways in which they sell these products. Ensure your model is flexible enough to adapt to these changes as they happen, with minimal effort (and ideally automate this)!

By James Kipling, Product Manager, Quantrix

Watch our on-webinar where you can discover the benefits of multidimensional modeling software, Quantrix, brings to sales operations. Watch here.

 

Here’s what you missed from Dimension 2017

We just wrapped up our Dimension 2017 User Conference in our home city of Portland, Maine and what a great week it was!

One of our attendees, Robert McMillan, CEO of ScotCro, said: “Best value conference of any I’ve ever attended after 25 years of the business.” This is a great compliment and I applaud the entire Quantrix team for organizing and conducting such a fantastic event.

At the conference, attendees got the first look at, and a hands-on experience with, Release 2018 – the newest version of our desktop Modeler and Qloud software. The response was tremendous! Our attendees reacted very favorably to the new category item generation & solver functionality on the desktop as well as to our new SaaS Enterprise Qloud offering. Both products gained numerous ease-of-use improvements that were the result of feedback from our direct conversations with customers at our previous conferences. So, hats off to my colleagues on the Quantrix development teams for a great software release.

We also had visitors from across the globe come to Portland to spend time with us. Some of the countries represented by the attendee list included Panama, Saudi Arabia, France, Canada, Mexico, Zimbabwe and the United States. The weather was perfect for our evening cruise of Casco Bay about The Islander and traditional Lobster Dinner at the Inn on Peaks Island. Our #QuantrixEvolved hashtag was well used on Twitter, too. Check out the link to see some of the conference photographs and tweets!

For the first time ever, we gave out conference awards including:

The Farthest Traveled award was presented to Tawanda Gorondondo from our partner Celsoft who travelled over 7,500 miles from Zimbabwe for the conference.

The Conference MVP award was given to Valerie Grenier from Tesser Consulting for her multi-year contribution to the learning tracks at our conferences and overall support of Quantrix in the field.

The Community Contribution award went to Rich Lopez from Litehouse Foods & Quantrix Authority for his championing of Quantrix at Litehouse and his dedication to the Quantrix Authority YouTube Video Channel.

The conference sessions themselves included hands-on learning workshops, product demonstrations and customer use-case presentations. Many attendees and Quantrix staff remarked how great it is to see Quantrix utilized in various use cases throughout our customer community. Importantly for us (and our attendees) everyone at Quantrix got to interact directly with the conference attendees. It is very exciting for us to see how Quantrix is being used by our customers and hear what you like, and what we can improve upon in the application. We find the feedback most valuable and we use it as a key part of our product development planning in the coming weeks.

We are already looking forward to next year. Look for a “Hold the Date” announcement soon. If you have an idea about how to make our event even better in the future don’t hesitate to drop us an email at customerservice@quantrix.com.

By Michael Salisbury

Dimension 2017 is shaping up to be a memorable conference

I am really looking forward to our Dimension 2017 Conference in Portland, Maine USA on September 11-13.

We have been holding annual user conferences since 2007 and they have all have been extremely successful. Quantrix users love the opportunity to learn something new about the software, review and give feedback on our roadmap/new features and, perhaps most importantly, interact with fellow Quantrix users from around the world.

For our 11th edition of this event, we decided to change things up a bit with the event branding. We are no longer calling it the Seminar by the Sea and have decided to incorporate the multi-dimensional nature of our product into the name of our premier user event. The ever-popular cruise around the beautiful Casco Bay (aboard the Islander, a new vessel for us this year) and our Lobster Bake on Peaks Island are still part of the social agenda though, so don’t worry! Maine weather in September is typically spectacular so it’s sure to a memorable event.

We are introducing a few new sessions this year too – including one where you can help design the next great Quantrix feature! In the session, attendees and Quantrix staff will work in agile product teams, and present their ideas to the conference. We will also be holding a model-a-thon where we will present a modeling problem to the attendee group and see what you come up with for solutions. Prizes will be given in different model solution categories. It will be sure to be a fun and informative group of sessions.

Our early bird deadline is August 9th and we still have a few ‘2 for 1’ passes left, so don’t miss out. You can register your interest here. We hope to see you in September!

By Michael Salisbury

6 Reasons why you should replace spreadsheets now!

The world runs on numbers. But, have you considered what would happen if the numbers being used by your business were wrong?

Would a professional graphic designer use paint?

Would a professional software developer use notepad?

Would a professional producer use movie maker?

Would a professional engineer use sketch-up?

The answer to the above questions are all a resounding NO. Professionals in these industries often resort to professional applications designed specifically for ease of use in their particular field. This leads to heightened productivity and ultimately greater performance & results.

Then why do finance professionals still use traditional spreadsheets?

Times are changing – Many finance professionals are starting to move beyond spreadsheets and instead use professional modeling tools such as Quantrix.

Whether you are responsible for making multi-billion-dollar investment decisions or simply trying to get your team to collaborate more effectively by reducing the number of rogue spreadsheet versions floating around your office, we’ve done the hard work for you and made a list of compelling reasons why you should ditch your spreadsheets and move to a beyond spreadsheets solution.

Here are the 6 top reasons why you should look to replace your current spreadsheet dependent processes:

1. ErrorsStudies have shown that up to 90% of spreadsheets contain errors – and even small errors can mean big money as seen in the case of the Fidelity Magellan Fund, where the simple omission of a minus sign led to the over statement of capital gains to the value of USD 2.6 billion.

2. Scalability – The issue of scalability is frequently overlooked – what was suitable for day one, may not be suitable now. Many projects start as a small manageable spreadsheet but as time passes and the spreadsheet evolves, it ends up being impossible just to simply maintain it – let alone gain meaningful insight.

3. Flexibility – Data is intrinsically linked in traditional spreadsheets – you can think of it like this: There are three parts to every spreadsheet; Presentation, logic and structure. It is impossible to change any one of these elements without it having an effect on the others – this bottleneck means spreadsheets although seemingly flexible on first glance are really quite un-flexible and any manual intervention increases workload and risk.

4. Clarity – The calculations used in spreadsheets are often unclear and hard to audit. The inability of spreadsheets to display the formula and result for all cells at once mean competent modelers must constantly switch between formula auditing mode and regular mode in order to thoroughly audit a spreadsheet. This combined with the cryptic nature of the formula such as =SUM(G7:G8)/G16 which is nowhere near as clear as the natural language representation: Quick Ratio = (Current Assets-Inventory)/Current Liabilities.

5. Efficiency – Spreadsheets need a unique formula for each calculation – and this creates a host of problems. Replicating logic across years/products/regions etc. is wasteful and impacts calculation performance as models evolve, not to mention if you want to make a change, you need to make it in many places.

6. Collaboration – Teams regularly collaborate on projects – but this creates more versions and more confusion. In an increasingly global world, groups of collaborators often from many different departments and locations will need to contribute. The integrity of the spreadsheet is always in doubt, as a number of versions need to be compared, contrasted and edited to create a true master file – this is called the ‘single source of truth’ problem.

You can download the complete paper which examines each of these reasons in more detail.

By James Kipling

Cloud procurement best practices

  1. What are the main issues surrounding procurement of cloud services? Why are they important?

I think the main issue and concerns surrounding cloud services are five-fold;

1st) Challenges of culture – what is acceptable for one part of the organisation will not/is not acceptable for another. This means that global, cross department procurement is very tricky.

For many global organisations, this will not be a new phenomenon, what might be fine on one side of the Atlantic will not be good for the other. This works both ways but gets exaggerated when cloud comes into play. An example could be that European companies have concerns, rightly or wrongly, that data in the cloud even when located in a data centre in their country such as Germany can be accessed by the U.S. government on request, if it is stored and managed by a U.S. company. Now this issue doesn’t appear for on premise solutions because the data is tucked up nicely behind the firewall and is secured away from prying eyes. There is no simple solution to these concerns, and as such you need to consider whether a solution you choose offers the right levels of flexibility and deployment options to support your business. Can I have everyone using the same tech but deploy on premise for one group and in the cloud for another?

2nd) Security – most organisations fear that because this is outside of the confines of their corporate infrastructure that it is less secure. This is increasingly being accepted as false.

Security concerns don’t go away and are always present but I believe that most companies will acknowledge that cloud providers, who stake their reputations on securely managing and protecting data, are probably better placed and have access to better tools than most companies’ internal IT staff. Again, having the options for deployment and management of the solution is probably a good thing. If something goes wrong, having the flexibility to step in and take control can’t be a bad thing. In all cases, do your homework and ensure you understand the level of risk that is acceptable.

3rd) Support for regulatory and business requirements – if it is in the cloud I have lost control of accepting features and functions and when to apply upgrades. You need to ensure that the system meets your regulatory needs and that your vendor will listen to you.

Many industries have different stipulations on how systems have to be deployed and configured and many have very specific needs. It’s important to do your homework and ensure that which-ever system you use can comply with the specific requirements. No one wants to have to retrospectively look at this when the auditors come knocking! This can be important in certain industries that require the whole system to be validated before it can be used. Giving the cloud provider control of this, means you could forever be in validation mode which is not sustainable.

4th) Data retention, availability and return – this is an area that often gets over-looked. You have to be sure you can get out and that you can get your intellectual property and data out of the system.

Let’s say something goes wrong, or your software provider decides on a change of business model or plan, have you asked how you’ll get your data back and if you even can? Companies need to be careful to avoid lock-in or, worse, that the data gets removed or deleted on termination of an agreement. In some cases, the systems can store years of data and losing that critical information could be devastating to their business. Make sure you are working with a vendor that understands your requirements and is capable to deliver beyond the end of your agreement.

5th) Connectivity –  if your team are on the move, on planes or don’t have a connection then make sure they can still be productive.

This seems obvious but you’d be amazed how many companies haven’t thought about connectivity in the context of business data loads and network traffic. Often the assumption is that the old network will support critical data intensive workloads and as such we can move forwards and procure new cloud technologies. Connectivity and networks need to be looked at based on the number of users and workloads that the cloud system will need to support. Because of the reasons above, at Quantrix we offer customers maximum flexibility in procuring our cloud technologies but we also have a hybrid approach that allows users to have the off-line option.

  1. What surveys/stats/figures emphasise the need for having a good cloud procurement strategy if you are a CIO?
  • 82% of companies reportedly saved money by moving to the cloud.
  • The average fortune 500 company is using up to 545 different cloud services.
  1. How do CIOs and CSPs forge a common consensus on a common language for procuring cloud services that simplifies the matter?

The consensus between the two heads has got to be around risk. In most cases, these two departments will be coming at this from very different directions: the IT team wants to reduce cost and ensure efficiency whereas the security team is about securing infrastructure, data and IP. To be successful, they need to agree on the acceptable risk profile so that both teams can work together. Risk comes in many forms from data residency, to tools and technology used for threat detection and AV to who has access to the information. There are so many different parameters that often it is almost impossible to agree. Hence it’s important to align on the language of risk and how to manage it.

  1. What are the best practices for cloud service procurement for both CIOs and also CSPs?

Find the right vendor, make sure they are someone you can work with and that can answer the questions you have linked to the above. Bigger doesn’t always mean better, sometimes the big guys will force you down their path rather than offering the best approach for you.

  1. What issues around cloud procurement should organisations and CIOs be aware of in the next 12-18 months? Why?

I think I have covered these in the initial question, we see these issues routinely and a one-size-fits-all approach lacks the flexibility and pragmatism for most businesses. Quantrix has worked across many organisations and business verticals and have accrued significant experience in helping customers manage their transition to the cloud. Our technology and approach offers the flexibility most companies need.

By Laurence Painell, VP Quantrix.