Tag Archives: ibm cognos tm1

TM1 – The swiss army knife for the finance department?

IBM Cognos TM1

No doubt, IBM Cognos TM1 is a unique solution. I have never met so many loyal and enthusiastic long-term customers than for any other finance-related software solution. TM1 is special indeed. There is a lot to like: it is lightening fast (64-bit in memory), configuration does not require rocket-science, it supports Excel, there is a great-looking web interface etc.. But one of the biggest benefits is that TM1 is very flexible. You can do many things with this solution. Usage is not limited to just planning and forecasting. It is not limited to the finance department but it can be leveraged across the enterprise for a plethora of business problems. And that is why many people say that TM1 is as versatile as a Swiss Army Knife.

What can you do?

What can you do with IBM Cognos TM1? A good colleague of mine recently put an interesting slide together. It shows various applications that European customers have built. This is not an exhaustive list but just a snapshot of what is possible.

TM1 Usage

Much more…

Does this inspire you? Find out more about TM1 by reading my interviews with the author of the IBM Cognos TM1 The Official Guide. And if you haven’t bough the book itself, make sure to pick up a copy sooner than later.

Related Posts:

Part 2 – Interview with the TM1 book author. More about TM1

Last Thursday, I posted an interview with the author of the new TM1 book Karsten Oehler. Here is the continuation of the conversation. This part of the interview focuses on the new IBM Cognos TM1 10.1 release.

Christoph Papenfuss: IBM Cognos TM1 10.1 was released in February of 2012. What is so special about this release?

Karsten Oehler: One of the central components of version 10.1 is a new modeling environment. It is called Performance Modeler. It really encourages finance and business professionals to develop their own models. Performance Modeler allows them to develop complex rules and links. You can also easily import data into applications. None of this requires deep technical knowledge.

Christoph Papenfuss: Does Performance Modeler replace Architect?

Karsten Oehler: Performance Modeler is an enhancement. The user can choose which tool to use. Architect is closer to Excel and has some features which are currently not supported by Performance Modeler. This includes dynamic subsets and report generation of Excel sheets from the cube viewer.

Christoph Papenfuss: There is a new desktop tool call Cognos Insight. It looks similar to TM1. Is there a relationship or connection between the products.

Karsten Oehler: Cognos Insight is a very powerful desktop tool that allows business people to conduct analysis, explore data and to develop prototypes. TM1 and Cognos Insight are closely connected – a local TM1 engine is part of Cognos Insight. It uses the same rule syntax and a simplified Turbo-Integrator version for data import. You can also import Cognos Insight models into Performance Modeler and refine them further.

Christoph Papenfuss: What is the advantage of using Cognos Insight in the planning process along with TM1

Karsten Oehler: There are two aspects: Planning applications are often created by prototyping. Cognos Insight is a great tool to express ideas and to develop prototypes. Secondly Cognos Insight can be used an additional front-end for contributors to the planning, budgeting and forecasting process.

TM1 Book

The TM1 book was the big star at the Budapest Finance Forum on May 9th

Christoph Papenfuss: Who should use Cognos Insight as a client for planning and forecasting models?

Karsten Oehler: TM1 has strong tools to support a highly decentralized planning and forecasting process. I recommend to use the IBM Cognos Contributor front-end because it is easy to distribute (non-local installation). With TM1 10.1 you can also integrate web sheets created via the Excel add in. However if somebody is using Insight for data discovery it is very interesting to contribute to the planning process directly within Cognos Insight. Another advantage is the scalability: With Insight it is possible to let the local insight engine do all the calculation which is needed for the planning slice assigned to the user.

Christoph Papenfuss: What do you like best about TM1?

Karsten Oehler: It is definitely the rule language. It is the most compact way to formulate all kinds of calculations to solve all kinds of business problems. The most complex cost and profitability calculations often look pretty easy after modeling them with TM1 rules.

Christoph Papenfuss: Thank you so much, Karsten!

You can purchase the TM1 book on Amazon.com: IBM Cognos TM1 – The Official Guide

About Dr. Karsten Oehler (author of the TM1 book):

Karsten is head of the Performance Management Client Technical Professionals at IBM Germany. Prior to joining IBM, he spent more than 15 years with several international software companies as a product manager, marketing executive, and consultant for financial accounting and business intelligence software. He has published several books and well over 130 articles about business analytics.

Related Posts:

Interview with the TM1 book author: IBM Cognos TM1 – The Official Guide (Part 1)

The new TM1 book

The highly anticipated 10.1 version of IBM Cognos TM1 was released in February 2012. Along with the software there is also a great new TM1 book: IBM Cognos TM1 – The Official Guide. My German colleague Karsten Oehler is one of the authors of this comprehensive TM1 book. We had the opportunity to catch up last week. It was very early in the morning and we were both on our first cup of coffee. This is the first part of two short interviews. Check back Tuesday next week to read more.

Christoph Papenfuss: Let’s start this discussion with an important question. TM1 is a strange product name. What does TM1 stand for?

Karsten Oehler: The name sounds still fresh and interesting after 25 years, right? Oh well…..it is an interesting name, indeed. And we do get a lot of questions about it. Here is the truth. Don’t be shocked – it stands for Table Manager 1. And it is the solution No 1 from my point of view.

Christoph Papenfuss: What is TM1? Can you describe it in an elevator-speech style?

Karsten Oehler: Cognos TM1 is the universal tool for the business person wanting to do all kinds of analytical work like forecasting, planning, simulation, analysis and reporting. Some people call it the ‘Swiss Army Knife’ for the business. The only thing it can’t do (yet) is to cook coffee ;-)

Christoph Papenfuss: Who can use IBM Cognos TM1 and why should they?

Karsten Oehler: Everybody with a need or desire to perform analytical work should use TM1. TM1 links typical analytical office work (Excel) with a high performing analytical database. However it doesn’t require that much conceptual overhead so that a business user is able to define his own data structure. TM1 doesn’t replace spreadsheets or data warehouses. It literally brings both worlds together.

Christoph Papenfuss: There are many planning, budgeting and forecasting solutions out on the market. What makes IBM Cognos TM1 so special?

Karsten Oehler: I am heading up a research group at the Controller Verein, the biggest European community for management accountants and finance experts. We describe several classes of planning tools: spreadsheet enhancements, ERP enhancements, OLAP, specific (financial) planning solutions and generic planning solutions. The last category is the most powerful one because it provides a lot of flexibility while also allowing you to leverage strong predefined planning functions like workflow, simulation, financial intelligence. Within this group TM1 is the best one because it has the most modern architect (scalability, write back queuing, rule optimization, batch processing environment) and the newest interface.

Christoph Papenfuss: Is TM1 just for planning, budgeting and forecasting?

Karsten Oehler: Absolutely not! As I mentioned before, TM1 is extremely powerful and flexible. Planning, budgeting and forecasting is just one area where TM1 can add tremendous value. Other important areas where TM1 excels at is profitability and sales analysis, costing (an area where TM1 is extremely strong), management consolidation, and last but not least production planning.

Christoph Papenfuss: You have just released the book IBM Cognos TM1 – The Official Guide. What prompted you to write this book?

Karsten Oehler: When you look at the bookstores and see shelves of SAP books and hardly any book about the best analytical tool, you have to scratch your head. We wanted to change that. Also, together with our customers we had developed a lot of valuable business content over the past decade. We really wanted to share this with others.

Christoph Papenfuss: What can you expect to learn from the book?

Karsten Oehler: How to live a better life – just kidding. No, in all seriousness it should help you with your daily TM1 work. It explains the architecture in a focused and structured way. This is an area where the standard documentation is sometimes a bit too extensive. Also, we have included a ton of business content. There are several small models that explain how TM1 can solve specific business problems like rolling forecasting, inter-company matching, variance analysis, activity based management etc..

Christoph Papenfuss: Who should read the book?

Karsten Oehler: Anybody who has an interest in TM1! Early feedback shows that power users and business consultants are the primary readers of this book.

Christoph Papenfuss: What is the best way to read your TM1 book? Is it more like a workbook or a resource guide that you pull out when you need it?

Karsten Oehler: Of course you could read the entire book, but I wouldn’t recommend that. It’s 800 pages strong! I would rather suggest to focus on just those business areas that you are interested in. Simply read it section by section. I would imagine that most people will use the book as a powerful reference.

Christoph Papenfuss: IBM recently released TM 10.1 . Do you cover the latest version in your book?

Karsten Oehler: We certainly cover it but it was not easy because there were a lot of short term changes in the development process. The business models are backward compatible. We wanted to make sure that users from the older releases are also able to leverage the book.

To be continued next Thursday…..the second part will focus on the 10.1 release.

Karsten-Oehler

About Dr. Karsten Oehler (author of the TM1 book):

Karsten is head of the Performance Management Client Technical Professionals at IBM Germany. Prior to joining IBM, he spent more than 15 years with several international software companies as a product manager, marketing executive, and consultant for financial accounting and business intelligence software. He has published several books and well over 130 articles about business analytics.

Related Posts:

The Cognos Blueprints are back – for Cognos Insight

IBM Cognos Blueprints

Have you heard of the Cognos Blueprints? They are pre-configured planing and forecasting templates. You can download them from the IBM Cognos Innovation Center website. Each blueprint comes with a fully functional set of model definition files, model and business best practices documentation. There are over 50 different Cognos Blueprints available for functional and industry-specific processes. In the past, most models were available for either IBM Cognos TM1 or IBM Cognos Planning. Today, you can also download a few of the most popular Cognos Blueprints for the new Cognos Insight product. But let’s back up for a second.

Cognos Blueprint

A Cognos Blueprint

Ideas and inspiration

What’s the purpose of the Cognos Blueprints and how can you use them? Let me quickly tell you a story to highlight the value. A few years ago, my family and I moved to Europe. We rented a house that did not have a kitchen installed. Given that my wife and I love to cook, I thought it would be easy to walk over to the next kitchen store to pick something that we liked. Our enthusiasm quickly died. The available options were overwhelming. To make things worse, the first sales person immediately asked us for details that we were not prepared or qualified to answer (“Do you want the AW3-x series or the BT-4?”). It  quickly became obvious that we had no clue how to best go about ordering a kitchen – despite our love for cooking. (Stop here for a second – think about your business analytics implementations!). The initial “requirements gathering session” was a disaster and waste of time. But a sales guy in another store recognized our problem. He asked us to read a few brochures and wonder around the store to look at various different model kitchens before sitting down with us. And that’s what we did. Reading about configuration options and touching sample kitchens helped us understand. The meeting with the advisor went well. We were able to ask the right questions and provide important input. The brochures and model kitchens were our proverbial blueprints. They helped us gain knowledge and they helped us with visualizing the future state.

Your projects

Think about your business analytics implementations? When you first sit down with users, they have a hard time articulating their requirements. It is also very difficult for them to visualize how their planning process could look like in the new system. This is where the Cognos Blueprints help. They are a fantastic tool for learning about common business issues, best practices and modeling techniques. Use them to either educate yourself or to help your customers in the business. But be careful, blueprints are not necessarily intended to be implemented. Most organizations use them to get ideas and to learn more about a particular process. And they do a great job with that. I have used them in many projects.

Analyticszone.com

A small library of Cognos Blueprints is now available for Cognos Insight. You can download them on analyticszone.com. You will get the cdd file and simply need to open it in Cognos Insight. I have not had time to play with them, yet. But they look very similar to the original ones. There is even a task bar that guides you through the process. So, take a look at the Cognos Blueprints today!

Cognos Blueprint

A sample dashboard from the Expense Planning blueprint

Related Posts:

Please welcome IBM Cognos TM1 10.1

IBM Cognos TM1 10.1

There is a lot of exciting stuff happening in the Business Analytics area. Last week, I wrote about the release of the personal analytics tool Cognos Insight. But there is more. Along with Cognos Insight, IBM also released the latest version of TM1. And let me tell you, IBM Cognos TM1 10.1 is a significant release. There is a lot of new and really exciting stuff in there. Here is a really short preview. If you want to see more, make sure to register for the official virtual launch on Wednesday, March 7th.

Performance Modeler

One of the most significant enhancements to TM1 10.1 is the addition of Performance Modeler. This is the environment where you can build and maintain the different models for planning, forecasting, profitability analysis and such. Performance Modeler provides new and highly visual tools for getting the work done. There are guided processes for standard tasks such as importing data and deploying models to end users.

Performance Modeler

TM 10.1 - New modeling workbench

Continue reading

Related Posts:

Better Forecasting And Budgeting Starts With Analysis – IBM Cognos 10 in Action

FORECAST ANALYSIS

Much has been written about developing better forecasting and budgeting templates or improving the overall process. But to my surprise there is hardly any focus on the role of analysis. I have seen many organizations where managers ‘survive’ the forecasting and budgeting cycle without ever spending time performing meaningful analysis of their data. They simply focus on getting the numbers in to satisfy finance and senior management.

This is a wasted opportunity. People should use that occasion to gain insights about their business. Lack thereof is likely to result in forecasts and budgets that are not meaningful. Some of you might say: ‘Wait a second! Managers do obtain some reports.’ True. They get the classic variance report with a ton of detail. But working with this is time-consuming and it is extremely difficult to identify critical trends and to see the big picture.

Forecasting Report

A traditional variance report. What does it tell us?

BETTER FORECASTING WITH ANALYSIS

Using a Business Analytics platform like IBM Cognos 10, you can make is easier for managers to gain critical insights. Here are a few ideas that you might find useful. Let’s look at the example of a sales manager for a European division of a global company. This manager has to forecast revenue and associated expense.

1. GO VISUAL

First of all, toss those detailed variance reports. Line of Business managers will most likely not obtain any information from them. Human beings do much better processing visual information. You can find a lot of information about this topic on this blog. So, try to swap out those hundreds of data points with a few meaningful charts. Your teams will be thankful.

2. CONSIDER EXTERNAL DATA

The variance report does not really tell us anything about our business potential. We could therefore consider looking at external data such as market trends. More and more of my clients do that. It helps them with assessing their overall position and it also helps them set realistic but ambitious targets. The example below shows that market growth in Europe is a bit limited compared to North America and Asia.

Market Size chart

The situation in Europe is not looking good

3. STUDY HISTORY

History is not necessarily a predictor of the future. But we should not ignore it. We might be able to identify seasonality and to detect general trends. Pick the critical measures. Line charts are usually a great choice to display this type of data. The example below shows that revenue is cyclical and that the general trend is positive:

Revenue Reporting

On the rise: Revenue trend for Europe

 

4. CHANGE YOUR PERSPECTIVE

One of the nice things about modern Business Analytics tools like Cognos 10 is that we can view data from multiple different angles. Use that capability to your advantage! Try to explore different perspectives. Look at the example above. Now, compare this to the view below. Same data. Just a simple change in Cognos 10:

IBM Cognos 10 dashboard

A different perspective

Our biggest months used to be in summer time. But that has shifted towards year-end. Same data – different perspective. Explore!

5. BENCHMARK YOURSELF

It makes sense to learn from others as well. We could do some internal benchmarking as well. In our example, we could look at deal sizes (looks like Europe’s deals are growing nicely and they are above company average):

Deal size chart

The average deal has grown bigger

Ok. That sounds good. But does the deal size come at a cost? Once again, let’s do some internal benchmarking and look at the ratio of expenses and the associated revenue. It looks like Europe is slightly higher which might explain the higher deal size.

Expense Ration chart

Every penny that is earned in Europe requires higher expenses

That information is valuable. It also leads us to think further and to ask some critical questions (Does it make sense to review our spending? Does the higher spending lead to bigger deals?). We should obviously not stop right here.

6. LOOK AT LEADING INDICATORS

What about other non-financial data as well? For revenue budgeting, I might also want to look at a leading indicator like customer satisfaction. And I might also want to look at our track record of winning deals (win-loss-ratio). Take a look:

Customer satisfaction chart

Customer satisfaction is rising again. A leading indicator for sales?

BETTER INSIGHTS

This is a simple example. The manager is now equipped with a few key insights:

  • Market growth is low
  • Our revenue trend is still positive
  • Buying patterns have shifted
  • Our strategy of investing in selling activities has increased the deal size
  • Customer satisfaction is increasing which could lead to higher sales

These are valuable insights. And it did not take much time to obtain them. The old variance report would not have provided that insight and it would have consumed a lot of time.

Try to incorporate a few of those ideas in your forecasting and budgeting processes. Doing this with spreadsheets is obviously difficult and probably explains why so many organizations are stuck with the traditional approach. Business Analytics software like IBM Cognos 10 makes it a lot easier to do that.

Related Posts:

Success with Forecasting – A discussion with Pieter Coens

Please meet Pieter Coens. Pieter is the Director of Finance & Control at Landal GreenParks in the Netherlands. He started his career in public accounting and joined Landal over 16 years ago. Pieter has held various positions in finance at Landal.

Landal GreenParks is a leader in bungalow-park management and rental. Landal has over 65 parks with a total of approximately 11,000 chalets. With 47 parks in the Netherlands, Landal leads the Dutch bungalow -park market. Outside the Netherlands, Landal has parks in Germany, Belgium, Austria, Switzerland and the Czech Republic.

Pieter gave a great presentation about Landal’s planning and forecasting processes at the IBM Finance Forum in Amsterdam on May 24th, 2011. We were able to have a quick chat at the event.

Christoph Papenfuss: You have implemented IBM Cognos to automate your budgeting and forecasting processes. What have you accomplished so far?

Pieter Coens: IBM Cognos currently helps us create an annual budget along with a monthly forecast. For that purpose, we have implemented several elements including models for Rental Revenue and our P&L.

Christoph Papenfuss: How did you manage your processes before that?

Pieter Coens: We used to manage our processes with a myriad of Excel files. It was very difficult. We ran into various issues such as managing excessive file sizes that slowed down the network, dealing with sluggish recalculations, difficulties tracing interdependencies etc.. Aggregating the different files was extremely cumbersome and time-consuming. And of course, there are the associated audit issues with spreadsheets.

Christoph Papenfuss: How are you benefiting from the implementation?

Pieter Coens: IBM Cognos has allowed us to automate a lot of the steps in the process such as preparing, distributing and aggregating planning templates. We are also able to develop more intricate models that provide us with better insights. Overall, we feel that our finance team and the business users are now able to focus more on the actual planning activities rather than the administrative tasks that I described earlier. My team is much more productive.

Christoph Papenfuss: You have an annual budget and also a monthly forecast. Who is involved in the process?

Pieter Coens: Finance is in charge of executing the process. But the business owners have to work and develop their own budgets and forecasts. They are in charge of entering their data in the models. Finance plays the role of the coach: we help the business make sense of the numbers and we guide them through the forecasts and budget iterations. This approach provides us with several advantages: By actively involving the business we can obtain more accurate and timely data. We also feel that the business is able to gain better business insights by actively working with their budgets and forecasts and the associated monthly actuals. Last but not least, Finance has more time to focus on value-added tasks such as performing analysis.

Christoph Papenfuss: You have a solid forecasting process. How often do you update the forecast and how far do you look into the future?

Pieter Coens: We currently use a monthly forecast. This allows us to anticipate and react to market changes. We ask the business to perform a detailed forecast for the next two months only. The remaining months until year-end are automatically calculated as a trend of the 2-month forecast. We found that creating a detailed forecast further out than 2 months does not necessarily result in very accurate data and it also takes a lot effort. We want the business to focus their energy on the short time-horizon and only forecast the know effects throughout the Full Year.

Christoph Papenfuss: You are proponent of driver-based models. Can you give us an example of how you have implemented this? Also, what are the benefits for the organization.

Pieter Coens: Driver-based models allow us to increase the speed of the budgeting and forecasting exercise. Also, we are able to perform better analysis at month-end and during the planning activities: Instead of just looking at an absolute variance, drivers allow us to review this from different angles such as price or volume effects. Food & Beverage Revenue, for example, can be calculated as Number of Guestnights * Average Spend on Food & Beverage.  The associated Cost of Sales are a percentage of the Food & Beverage Revenue that has been calculated.

Christoph Papenfuss: How did you go about implementing the IBM Cognos solution?

Pieter Coens: We decided to follow a modular approach and started with a few smaller projects. This allowed us to build critical skills and develop success much earlier. This in turn led to a situation where the business heard about our accomplishments and they started asking for additional projects e.g. forecasting on Operational Management Information.. Change management is a lot easier if the business users ask for projects instead of us pushing them to accept

Christoph Papenfuss: What else are you planning to do?

Pieter Coens: We are definitely looking to reduce the level of detail in our models. More detail does not mean higher accuracy. On the contrary, more detail requires more work and it does not necessarily drive accuracy. We are also looking to implement additional models such as cash flow and predictive modeling/forecasting for our Yield department.

Christoph Papenfuss: Thank you very much, Pieter! Good luck with your implementation.

Related Posts: