Oracle Hyperion 11.1.2.

4 Hyperion Planning
Revenue Forecasting Rule

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History:
Version
0.1

Description Change
Initial Draft

Author
Amit Sharma

Publish Date
10th Feb 2015

Contents
The Fundamentals of Revenue Forecasting ............................................................................................................. 3
Example of Revenue Forecast............................................................................................................................. 3
Writing Business Rule For Revenue Forecasting ....................................................................................................... 4
Step#1 SET Commands....................................................................................................................................... 4
Step#2 Apply FIX on Subset of Cube Commands .................................................................................................. 4
Step#3 Apply FIX on Subset of Cube Commands .................................................................................................. 4
Step#4 Calculating Hardware Revenue Units*Average ......................................................................................... 4
Step#5 Apply FIX on Period Dimension ................................................................................................................ 5
Step#6 Calculating Cost of Sales

("4110" * (1 - "Gross Margin %") .................................................... 5

Step#7 Confining Focus to Gross Profit ................................................................................................................ 5

Step#8 Consolidating Product Dimension ............................................................................................................ 5
Step#9 Calculating Revenue Driver Assumption ASP and COS Rate........................................................................ 5
Step#10 Calculating Gross Margin % ................................................................................................................... 5
Step#11 Calculating Sales Calls ........................................................................................................................... 5

The Fundamentals of Revenue Forecasting Understand thoroughly how sales channels work
and how prospects become customers. On a high level, many companies develop sales forecasts by
applying an expected or desired market growth rate to current year revenues. These forecasts are then
substantiated using a bottom-up forecasting approach that takes into account inputs such as projected
product units sold, price, sales productivity and seasonality, to name a few. Most of the time, the second
approach ends up using assumptions designed to meet the end result of the first method.
The total number of potential customers with which a company can realistically do business,
described sometimes as the addressable market.
Sales team productivity variables: the number of productive sales reps in the market, the number
of calls each can make, the number of calls and average length of time expected to close a sale,
average close rate(s) per rep and per product and any ramp-up time required for new products
or reps.
The incentive structure of the sales team and its potential impact on product sales. For example,
if sales reps are rewarded based on gross monthly sales, then one should not be surprised if
they spend their time selling products with the highest price tags.
Online sales channel productivity variables: the number of products that customers will be
comfortable purchasing online, the speed and effectiveness of the fulfillment process, the type of
marketing investment required to drive the level of transaction activity sought.
Any seasonality associated with buyer behavior

Example of Revenue Forecast

Writing Business Rule For Revenue Forecasting

Step#1 SET Commands

Step#2 Apply FIX on

Subset of Cube
Commands

SET UPDATECALC OFF ;

SET AGGMISSG ON;

FIX (&CurForecast, {Version},{Department})

Step#3 Apply FIX on

Subset of Cube
Commands

FIX (@CHILDREN("P_TP1"),@CHILDREN("P_TP2"))

Step#4 Calculating Hardware

Revenue Units*Average

"4110"(
IF ((@ISMBR(&QRFYr1) AND @ISDESC(&QRFPer1)) OR (@ISMBR(&QRFYr2) AND @ISDESC(&QRFPer2))
OR (@ISMBR(&QRFYr3) AND @ISDESC(&QRFPer3)) OR (@ISMBR(&QRFYr4) AND @ISDESC(&QRFPer4)))
"4110" = @ROUND("Units" * "ASP",2);
ENDIF )

Step#5 Apply FIX on Period Dimension

Variable Reference

Step#6 Calculating Cost of Sales

("4110" * (1 - "Gross Margin %")

"5110"(
IF ((@ISMBR(&QRFYr1) AND @ISDESC(&QRFPer1)) OR (@ISMBR(&QRFYr2) AND @ISDESC(&QRFPer2)) OR
(@ISMBR(&QRFYr3) AND @ISDESC(&QRFPer3)) OR (@ISMBR(&QRFYr4) AND @ISDESC(&QRFPer4)))
"5110" = @ROUND("4110" * (1 - "Gross Margin %"),2);
ENDIF
)

"5110" = @ROUND("4110" * (1 - "Gross Margin %"),2);

Step#7 Confining Focus to Gross Profit

@IDESCENDANTS("GP");

Step#8 Consolidating Product Dimension

CALC DIM ("Product");

FIX (&CurForecast, {Version},{Department})

Step#9 Calculating Revenue Driver Assumption

ASP and COS Rate

"ASP" = @ROUND("4110" / "Units",2);

"COS Rate" = @ROUND("5110" / "Units",2);
Step#10 Calculating Gross Margin %

"Gross Margin %" = @ROUND("GP" / "4001",2);

Step#11 Calculating Sales Calls

"Sales Calls"(
IF (@ISMBR(&QRFYr4) AND @ISMBR("BegBalance"))
"Sales Calls" = "Units"->"P_TP1"->"Rolling" / "Avg Order Size" / "Close Rate" * "Travel %";
ENDIF
)

FIX (&CurForecast, {Version},{Department})

FIX ( @CHILDREN("P_TP1"),@CHILDREN("P_TP2"))
"4110"(
IF ((@ISMBR(&QRFYr1) AND @ISDESC(&QRFPer1)) OR (@ISMBR(&QRFYr2) AND @ISDESC(&QRFPer2))
OR (@ISMBR(&QRFYr3) AND @ISDESC(&QRFPer3)) OR (@ISMBR(&QRFYr4) AND @ISDESC(&QRFPer4)))
"4110" = @ROUND("Units" * "ASP",2);
ENDIF
) "4001";

"5110"(
IF ((@ISMBR(&QRFYr1) AND @ISDESC(&QRFPer1)) OR (@ISMBR(&QRFYr2) AND @ISDESC(&QRFPer2))
OR (@ISMBR(&QRFYr3) AND @ISDESC(&QRFPer3)) OR (@ISMBR(&QRFYr4) AND @ISDESC(&QRFPer4)))
"5110" = @ROUND("4110" * (1 - "Gross Margin %"),2);
ENDIF
)
@IDESCENDANTS("GP");
ENDFIX
FIX ("Units",@IDESCENDANTS("GP"))
CALC DIM ("Product");
ENDFIX
ENDFIX
FIX (&CurForecast, {Version},{Department})
"ASP" = @ROUND("4110" / "Units",2);
"COS Rate" = @ROUND("5110" / "Units",2);
"Gross Margin %" = @ROUND("GP" / "4001",2);
"Sales Calls"(
IF (@ISMBR(&QRFYr4) AND @ISMBR("BegBalance"))
"Sales Calls" = "Units"->"P_TP1"->"Rolling" / "Avg Order Size" / "Close Rate" * "Travel %";
ENDIF
)
ENDFIX