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Create a cost model from Cost Model form

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Create a cost model from Cost Model form

You can create multiple cost models to process allocations. Use the Cost Model form to configure all possible settings available to the cost model.

Before you begin

Note:

This feature is available only when you own an ITBM Analyst license.

Role required: cost_transparency_admin

About this task

You can select a cost model in The Data Definition stage when you set up allocations. You can also clone a cost model in the workbench.

Procedure

  1. Navigate to Financial Modeling > Cost Models > All.
  2. Click New.
  3. Fill in the form fields (see table).
    Table 1. Financial Model form
    Field Description
    Name Name of the cost model in accordance with its description, of up to 80 characters in length.
    Description Description of the cost model.
    Used by Cost Allocation Option to specify if the model is to be used for cost allocation.
    Model Owner The user who created the cost model.
    Data Source The source from where the data is taken.

    Data Source field is editable until financial modeling actions are not done.

    The application is preconfigured to point to the Budget Staged table as a data source for the Default Budget Cost Model as it is linked to ITFM Budget staged expenses.

    You also have the option not to select a data source. In such a case, the Workbench stages will not have the data cleansing stage as there is no financial data source to pull the expense lines from. Amounts would then be keyed in manually at the bucketing stage.

    Choose Segments for GL Expense Lines The Choose Segments for GL Expense Lines field is available only when Generate Controlled Cost Lines check box is enabled. You can choose segments to generate the GL expense lines in the itfm_allocation table.
    Note: This feature is available only when you own an ITBM Analyst license.
    Carry Fields in GL Expense Lines Configure the data source fields that you want to carry over from the bucketing stage to the grooming and allocation stages.

    By default, the data source fields that are set Used for Bucket split as ‘true’ are carried over from the financial data source General Ledger Staged table.

    Note: This feature is available only when you own an ITBM Analyst license.
    Used by Budgeting Check box if the model is being used for budgets.
    Cost Transparency
    Fiscal Unit Defines the fiscal unit to be a month, quarter, or a period based on the fiscal calendar.
    Generate Controlled Cost Lines

    (Recommended). Helps in performance and saves database space.

    Check box to generate minimal cost lines aggregated at the account level only, in the itfm_allocation_aggregate table.

    You can define specific breakdown relationship between the segments required for business. Additional breakdown lines are generated in the itfm_allocation_breakdown table between the segments.

    Note: Detailed cost lines can negatively impact the performance.
    Include Sub-Bucket info The Include Sub-Bucket info check box option is available when Generate Controlled Cost Lines check box is selected.

    If enabled, the generated cost lines and breakdown lines hold sub-bucket information.

    User Group The user group selected is associated with the cost model. This restricts access to the cost model by other user groups that are not associated with the user group of type ITFM.

    Users with cost_transparency_analyst role can access default cost model and the cost model associated to his/her user group only.

    Users with cost_transparency_admin and system administrator roles can access all the cost models, including the default cost model.

    If the Used by Budgeting check box is enabled for the cost model, then users with appropriate budgeting role can view all the budget models.

    If the cost model is used for purposes of both budgeting and generating cost allocation lines, that is, if Used by Cost Allocation and Used by Budgeting check boxes are enabled, then all users can access the cost model.

  4. Click Submit.
  5. To run cost allocations, click Allocate Expenses button.

    Use this option to run cost allocation from the cost model form and not necessarily from the workbench.

    1. Select the fiscal period in the Allocate Expense dialog box.
    2. Click OK.

      The allocation engine runs to generate cost allocations for the selected fiscal period. The engine does cleansing and bucketing. It allocates the expenses and creates allocation lines. However, if the cost model has no data source, the engine ignores the cleansing and bucketing stages and creates allocation lines.

  6. To download the cost model, click Download Cost Model button.

    You can download the cost model for uploading it to, or deploying it in another instance to do cost modeling in a different pre-production environment. You can later move the cost model to other production environments.

    With the ability to download the cost model you can also download all its related tables and the related elements such as segment definition and hierarchy, buckets, cleansing and grooming conditions, bucket allocations, rollups and rollup overrides, and consumption metrics.

  7. To generate cost lines for leaf buckets associated to the cost model, click Generate Bucket Cost button.

    Use this option to generate bucket amount lines for this cost model that has no data source. Cost lines are generated for each leaf bucket that has no further sub-buckets. Even if there is no amount in the bucket, the amount lines are generated in the Groomed General Ledger Data [itfm_gl_data_groomed] table, populating zero in the Amount column. The table displays the bucket, sub-bucket, and amount associated with the cost model for the fiscal period that you selected.

    1. Select the fiscal period in the Generate Bucket Cost dialog box.
    2. Click OK.
      • If there is no amount in a bucket, the allocation engine still generates a groomed line with zero expense for the selected fiscal period of the cost model.
      • If there are pre-existing groomed lines with amounts in buckets for that fiscal period, then the engine does not overwrite those cost lines.

      You can edit the Amount column to enter the amount for each sub-bucket.

  8. To create model hierarchy using the interactive user interface, click Build segment hierarchy related link. Add new segments to the hierarchy or remove segments from the cost model per your requirements.
  9. To replace the top segment of the selected cost model that you want to clone:
    1. Click the Clone Model and Replace Top Segment related link.
    2. Select a segment from the choice list of the Clone Model and Replace Top Segment pop-up and click OK.

      You can replace the top segment in the cost model with another segment of your choice. Segments that have not been used in the cost model are available for you to choose to replace the top segment of the cost model. The replacing segment is from the available segments but has not been already used in the current cost model segment hierarchy. The selected segment replaces the existing top segment and will not be an addition to the existing segment levels in the hierarchy. Replacing the top segment enables you to configure the cost model specifically for the organizational structure of your enterprise.

      Note: The rules such as bucket assignments, rollups, rollup overrides, breakdown relationship, unit metrics, sibling relationship, and GL segment configured for the original segment become invalid for the replaced segment. Hence, you must set these rules for the replaced top segment.

What to do next

The buckets that use this cost model are shown in the Buckets related list.

You can also create an account bucket.

Map a unit cost metric to a segment of a cost model to generate unit costs.

The breakdown relationship to explicitly generate breakdown cost lines in the itfm_allocation_breakdown table for a given segment-segment mapping are shown in the Breakdown Relationships related list.

You can also define a sibling relationship to roll up accounts at the sibling level.

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