Customizable Spreadsheet Solutions The Promise of Templates Fulfilled 1

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1 Customizable Spreadsheet Solutions The Promise of Templates Fulfilled 1 Richard J. Petti and Howard I. Cannon ModelSheet Software, LLC info@modelsheetsoft.com URL: Customizable Spreadsheets: Blog: Group: August 15, 2009, revisions through October 28, 2011 Abstract: Customizable Spreadsheet Solutions deliver on the promise of spreadsheet templates to deliver flexible, reusable spreadsheet models. A Customizable Spreadsheet Solution is a flexible spreadsheet model that a user can adapt to a situation by filling in a simple web form. The user gets a customized Excel workbook that matches his/her needs better than any conventional template, with far less effort. The key features of customized spreadsheets are: (1) users specify customizations in a simple wizard-like interface; without editing spreadsheets or cell formulas; (2) the web customization form offers most commonly desired customizations; (3) delivered templates are conventional spreadsheet workbooks; (4) the process of customizing and generating spreadsheets is highly automated, hence fast and inexpensive; and (5) when users need changes that are not covered on the customization form, model authors can make the changes in the ModelSheet Authoring Environment. Customizable spreadsheets usually reduce the cost of customization by a large factor, compared to conventional processes. They have features that make them easier to understand and audit. The conventional spreadsheet that the process delivers permits further customization in the Excel workbook. These advantages result from building the model using the ModelSheet Authoring Environment for spreadsheet models. 2 Contents 1 The Unrealized Potential of Spreadsheet Templates 2 2 Customizable Spreadsheets Fulfill the Promise of Spreadsheet Templates 2 3 Customizable Spreadsheets from the Viewpoint of Spreadsheet Users 3 4 Making the Model Easy to Understand 9 5 Customizations in Excel After Receiving a Customized Spreadsheet 11 6 Rapid Turnaround of User Specifications to Customized Spreadsheets 13 7 Re-importing Information from Customized Excel Spreadsheets 13 8 Library of Customizable Spreadsheet Solutions 13 9 Conclusion Acknowledgments This paper: "The ModelSheet Authoring Environment for Spreadsheet Models", by Richard J. Petti and Howard I. Cannon, URL: Intro. page 1 of 16

2 1 The Unrealized Potential of Spreadsheet Templates Reusable spreadsheet templates promise to drastically reduce the resources needed to design and implement reports and analyses that are used by many people. A template that is used by thousands of people can theoretically reduce aggregate authoring effort by a thousand-fold, compared to each user building his/her own version. However, two drawbacks severely limit the value of conventional spreadsheet templates. Users usually need to customize templates to each situation. This process entails understanding and manually editing a sea of inscrutable cell formulas that were written by someone other than the user. Many spreadsheet users claim it is often easier to build an application from scratch than to figure out how to customize a prebuilt template for the situation at hand. Even when a template does not require customization, template users often must understand and audit the computations the template performs. Auditing conventional spreadsheets is notoriously difficult, because of the proliferation of cell formulas whose meanings in terms of model concepts must be deciphered. The net result is that conventional spreadsheet templates are not widely used. The industry consists mostly of small vendors and free giveaways. 2 Customizable Spreadsheets Fulfill the Promise of Spreadsheet Templates A customizable spreadsheet is a flexible spreadsheet model that you can adapt to your situation by filling in a simple web form, without editing a spreadsheet or its formulas. Users get customized Excel spreadsheets that match their needs better than any conventional template. Customizable spreadsheets increase the range of customizations and reduce the effort and cost of customization, compared to conventional templates, for five reasons. 1. Template users interact only with a simple wizard-like web customization form. 2. The simple web customization form offers most commonly desired customizations. These are of three generic types. Change time: time grain, starting time, ending time, and intermediate time sums (such as annual sums in a monthly report) Change dimensions : the number of items, the names of the items, and their hierarchy (for example, the products in a product line organized into product families) Turn on and off major features in a spreadsheet model. Each switchable feature can include variables, tables, titles, whole worksheets, and other components of a model. 3. Delivered templates are conventional spreadsheets in every sense. Template users do not need to learn nothing new. 4. The process of integrating customizations and generating the customized template is highly automated. 5. When users want changes that are not on the web customization form, model authors can relatively easily alter the model in a highly structured spreadsheet model built with the ModelSheet Authoring Environment. You can read more about the ModelSheet Authoring Environment that underlies customizable spreadsheets in The ModelSheet Authoring Environment for Spreadsheet Models ( page 2 of 16

3 3 Customizable Spreadsheets from the Viewpoint of Spreadsheet Users From the viewpoint of spreadsheet users, some illustrative examples sell the story best. Spreadsheet users interact only with a simple web form. This is the way that good technology should present itself to nonspecialists you start a modern automobile by turning a key in the ignition and maybe pressing the accelerator. Electronic controls that improve performance of the engine, transmission, brakes and other systems are completely hidden from view, except when they clearly communicate information to the driver in the driver's frame of reference. The model browser and the model customizer are designed to be user-obvious as much as possible. Figure 1-a shows the opening screen of the model browser ( The model browser shows all categories and the titles of all models in each category. Figure 1-a: Model Browser (showing all current categories of models) Click on Finance (or the checkbox for Finance in the upper right). page 3 of 16

4 Figure 1-b: Model Browser Opened to Category "Finance" (top part only) For each model, the Browser shows The name of the model The price range for versions of the model A short description of the model Screen shots from the model Click on "Financial Plan for a Business." page 4 of 16

5 Figure 2-a: Overview Tab for "Financial Plan for a Business" The "Features" tab displays a detailed list of features, showing which features are available in each version. The tab "Guides and Tools" contains links to A free, static non-working sample spreadsheet A Quick Start Guide that tells you have to start using your Excel workbook fast White papers and case studies (as available) A Users' Guide and video introduction (as available) Click on the bottom orange bar "Try our Customizer " page 5 of 16

6 Figure 3-b: Customizer for "Financial Plan for a Business" (Start page) The Start Page of the model customer for each model contains A short description of the model (left top). You can get a longer description by clicking on more The available versions with short descriptions, with radio buttons for choosing one (left center) A list of pages in the customization form, with hyperlinks, from Start to Finish (upper right) Let's select the "Power Pro" version of "Financial Plan for a Business" and click the "Next" button on the lower right. This takes us to page one of the Customizer for this model, shown in the figure below. page 6 of 16

7 Figure 2-c: Customizer for "Financial Plan for a Business" showing customizable time series (page 1 of 9) Page 1 of the customization form allows the user to begin specifying customizations. General information, such as the name of the organization, currency symbol, and date format Time series, including time grain (day, week, month, quarter, or year), model start date and number of time periods whether you want time rollups (for example, quarterly or annual sums in a monthly report) Checking the box "use multiple time ranges " opens another section where you can make the time grain and rollup grain change over time (for example, show months with quarterly sums in the first year, quarters with annual in the second year, and years at later times). page 7 of 16

8 Figure 2-d: Customizer for "Financial Plan for a Business" showing customizable Dimensions (page 2 of 9) This figure shows a customizer page where users can customize Dimensions for the product line and sales locations Whether the model includes a sales funnel ( which tracks progress of qualified leads through the sales funnel), product support contracts, and installed base reporting (not shown). page 8 of 16

9 Throughout the customizer, users can click on hyperlinks to get more help. Hyperlinks denoted by "?" give help on how the customizer works. Hyperlinks denoted by "more " provide further information about a specific customization Generally, users can specify four generic types of customizations: Generic information such as company name, currency symbols and date formats Time Series Dimensions (such the list of products shown above) Turning on or off major features in the model (such as the sales funnel feature shown above). 4 Making the Model Easy to Understand ModelSheet customizable spreadsheets make optimal use of Excel features to make the model accessible to users. Excel Comments Every display instance of every variable has an Excel comment that explains something about what the variable is, how or where it is used, and other useful information. At the bottom of the comment box is displayed the internal ModelSheet name of that variable, which helps you to find the formulas that define that variable on worksheet Formulas (explained below). Every dimension (such as a list of products, departments, or countries where you do business) also has a comment that explains what that dimension is. The comment is located in the bottom left section on worksheet Labels. Figure 4: A Variable Comment on Worksheet IncStmt in Advanced Financial Plan Worksheets and worksheet layout Good worksheet layout is a form of punctuation that helps spreadsheet users see the main groupings of information on a worksheet. Excel collapsible groups ModelSheet customizable spreadsheets use Excel collapsible groups fairly consistently to give users an overview or table of contents for the information on large worksheets. For example, the current edition of the relatively small Advanced sample of "Financial Plan for a Business" has on its inputs sheet about 600 lines of data (including empty rows as separators to improve readability). page 9 of 16

10 Figure 5: Collapsible Groups on Worksheet Inputs from the Advanced Financial Plan Template While any Excel spreadsheet can have helpful comments, good layout and collapsible groups, ModelSheet s technology makes it easier for authors provide these aids for example, the model author enters each comment for a variable once, and each customized spreadsheet includes the comment in every display instance of the variable. The collapsible groups can be nested and automatically readjust if you add new tables in a collapsible workbook section. ModelSheet customized spreadsheets also offer features that are not native to Excel to make the model easier to understand. Named variables Every table on every worksheet has a name actually two descriptive names. The display name is visible in the upper left of the table. The formula name is the internal name of that variable that appears in the listing of formulas on worksheet Formulas (described below). Formulas worksheet Each customized spreadsheet has a worksheet named Formulas that lists the symbolic formulas in the ModelSheet model. Although these formulas are not executable in Excel, they provide a more convenient way to learn how the model s computations work than the Excel cell formulas, for two reasons: (1) ModelSheet models typically have 1%-10% as many formulas as equivalent Excel models; (2) each formula is readable in "math-english." page 10 of 16

11 Figure 6: Worksheet Formulas in "Financial Plan for a Business" (partial view) 5 Customizations in Excel After Receiving a Customized Spreadsheet Spreadsheet users can continue to customize some aspects of the customized Excel workbooks that they receive. Here are some of the items that can be customized. All input data in shaded cells can be edited. ModelSheet shades cells that contain input data (in dark blue on most computers). Any of this data can be edited in Excel and becomes effective throughout the workbook. In most models that have time series, users can change the start date of the main time series. This is an extremely powerful feature, because the life of the workbook can be prolonged indefinitely by changing the start date of the time series. page 11 of 16

12 Display names of variables can be changed on worksheet Labels. The new names proliferate throughout the workbook automatically. Display names of dimension items can be changed on worksheet Labels. The new names proliferate throughout the workbook automatically. This is a very powerful feature, because as the names of products or departments change, the Excel workbook need not become obsolete. Comments associated with variables and dimensions can be changed on worksheet Labels. The new comments will replace the old ones throughout the workbook if the user reimports the comments into ModelSheet and then exports a new Excel workbook. Spreadsheet users can edit the layout of the workbook, moving tables on or between worksheets. Users can even move parts of tables to different places, and all the formulas will work. (Generally, users can move parts of tables to different locations; however moving parts of tables to different places may occasionally cause a problem because some formulas may depend on contiguity of cells in a table.) Figure 7: Worksheet Labels in Advanced Version of "Financial Plan for a Business" (partial view) page 12 of 16

13 6 Rapid Turnaround of User Specifications to Customized Spreadsheets The web customization process is 100% automated. This enables users to download customized spreadsheets in minutes (or hours for very large models). Elapsed time depends on the size of the model and the load on the ModelSheet servers when the job is processed. Typically, the automated process can complete a workbook that is 50MB in size in about 10 minutes elapsed time, and a workbook that is 100 MB in size in about 20 minutes. Automation enables ModelSheet to offer unprecedented low prices for customized spreadsheet models. 7 Re-importing Information from Customized Excel Spreadsheets ModelSheet staff can reimport the changes described above (except layout changes) into the ModelSheet model, make changes and re-export the model to an Excel workbook. In the near future, users of the Customizer will be able to re-import their own Excel workbook that was exported by ModelSheet, re-edit the model in the customizer, and re-export the altered model along with data from the original Excel workbook. The re-imported changes will be included in all future exports of the model made with the custom specifications that the user saved. Re-import is very useful on projects that start with a customized spreadsheet that goes through several successive revisions after the original customized spreadsheet is generated and (completely or partially) filled with data. 8 Library of Customizable Spreadsheet Solutions You can see the ModelSheet library of Customizable Spreadsheet Solutions at The list below includes the more popular larger models that are available as of the date of this version of this paper. Please check the website above for other models and recent additions. 8.1 Financial Plans Financial Plan for a Business This template model is a prebuilt financial plan with financial statements, ratio analysis, and valuation model. The revenue model includes list prices, actual prices, sales units, growth rates, sales returns. It tracks expenses by department, and has accounts for headcount, labor, facilities and other expenses. The balance sheet tracks several kinds of assets, liabilities, and equity. Many more optional features so you can choose the ones you want. Financial Plan for a Small Business Provides all features need for a robust model of a small business, in a simpler framework. Financial Plan for Professional Services Tracks individual large client engagements, small client engagements by practice area, professional staff time and utilization, in addition to most of the features of the generic Financial Plan for a Business. Financial Plan for Medical Services page 13 of 16

14 Tracks new and returning patients, procedures per patient over time, medical staff time and utilization, major medical equipment economics and utilization, in addition to most of the features of the generic Financial Plan for a Business. 8.2 Other Financial Analysis Activity-Based Budgeting Budgets expenses based on levels of activities that drive expenses. Yields more flexible and defensible budgets. Cash Flow Model The simplest of our 13-week cash flow models is available for download on the website. The more complex ones include databases for receivables and payables, and tracking of the borrowing asset base and a line of credit. Capitalization Table Tracks investments, common and preferred shares, options, notes, and preference payments through multiple rounds of financing of a company. The complexity of this application makes it an ideal application for ModelSheet. Investment Project Financial Analysis Performs a financial analysis of investment projects, with a focus on financing. Includes equity, debt and lease financing and blends of all three.ooptional sub-projects with their own financials Valuation and internal rate of return. 8.3 Marketing and Sales Analysis Profitability analyses Marketing Program Effectiveness Computes marketing program contribution margins. Revenue allocation and contribution margin (also known as return on marketing investment ) constitute a significant advance in marketing management methods in the past decade. Product Profitability Model Computes contribution margins for a line of products. Expenses are segmented by department and by cost factors. Customer Profitability Model Computes contribution margins for each customer or customer group. page 14 of 16

15 8.3.2 Sales analyses Sales Reporting and Analysis Provides flexible reports from company totals to segment details. Sales Planning/Forecasting Combines historical sales data and managers revenue targets for selected market segments to forecast revenue and sales units. Sales Commission Calculator Computes planned and actual sales commissions based on revenue and other variables, for each sales representative and each product Other marketing analyses Price Testing and Price Elasticity for one product Use price tests and price elasticity models to make informed pricing decisions. The Advanced version estimates profit margins, to help set profits that optimize profit. Price Testing and Price Elasticity for several products Use price tests and price cross-elasticity models make informed pricing decisions for multiple interacting products. The Advanced version estimates profits Strategic evaluation Strategic Assessment of Business Units and Investment Projects Operations Analysis Operations Process Flow Analysis Tracks flows of units and costs through business and manufacturing process flows, using transition rates between stages and yield rates. Tracks units of input, work-in-process, and finished goods; total cost and cost per unit for input, processing, and output for each stage. Customer Support Analysis Analyzes customer support activities, revenues, costs, and contribution margins 8.5 Other Models and Analyses ModelSheet offers several other types of customizable models on its website. 9 Conclusion ModelSheet s Customizable Spreadsheet Solutions fulfill the promise of spreadsheet templates for expressiveness, customization, and re-use. Spreadsheet users can customize time series, dimensions, worksheet layouts, and turn on or off major features of spreadsheet models. ModelSheet technology automates the process of customizing and generating customized templates, so that prices are very low for customized models. page 15 of 16

16 10 Acknowledgments The authors would like to acknowledge the help of Krishnan Badrinarayan in editing this manuscript ModelSheet Software LLC. All rights reserved. ModelSheet is a trademark of ModelSheet Software LLC in the United States and/or other countries. Microsoft, Excel, Internet Explorer, PivotChart, and PivotTable are trademarks of Microsoft Corporation. All other trademarks are property of their respective owners. page 16 of 16