Here at F1F9, I spend a large part of my life talking to people about how to model better, explaining how applying standardisation and modelling best practice can improve the way we do things and make all of our lives easier.
I got to thinking, what it would actually look like and feel like, if collectively we achieved it. If we fast forward in time to a day where we have achieved modelling Nirvana.
Here’s a day in my life as a project finance financial advisor once we have achieved modelling Nirvana.
I wake up in good time. Jump out of bed and go for a run.
Once back, I shower, slip on my designer suit, kiss my supermodel wife and wonderful kids goodbye. The Aston Martin is waiting to take me for a pleasant commute to the office.
It’s a tough day…
- Got a major bid going in, and the person who built the model left the company years ago…
- Have the results of a model audit coming in…
- Need to build a new model…
First up, the bid. It is due in first thing tomorrow and the client only provided their updated costs this morning. This could be a late one…
Happily, the client operates to the same modelling standard as I do. I just cut and paste his numbers into my model, re-optimise and we’re done. Oh, but there’s all those painful proformas to complete that the purchasing authority always insist on. Happily, they too work to the same modelling standard and prefer to take outputs straight from the model. Job done.
It’s now 9:30, time to check the model audit report.
Because we have all agreed on the modelling standard and format to use, we were able to focus on the commercials of the deal. There are usually only a few fiddly areas around ratios to discuss.
We have stopped worrying about the mechanics of the model. We were able to nail that a long time ago.
The audit report is clean. I'm not really sure why we do these any more. Job done.
It's now 9:35. On to the new model build.
The client works to the universal modelling standard and has provided a clear and detailed specification for what they want built. I have a quick review, clarify a few things and send off the specification to our modelling team. They all know the standard, have loads of capacity and can turn this stuff around really quickly.
I’ll review it tomorrow.
It is now 10.00. Time to head home.
And there's a phone call from the Group Finance Director: "If you can get all this stuff done by 10.00 in the morning, why am I paying for your Aston Martin and fancy suit?"
Perhaps it is not modelling Nirvana after all.
Let us know what your modelling nirvana would look like? How could standardisation make your job easier?