Quote Originally Posted by XL-Dennis
If the creators don't understand the underlying (business) processes the models are supposed to reflect then I do not necessarily see the output as good. It can be acceptable but not per se good.
Exactly right.

When we present our in-house evaluation courses we make the point that the investment modeller isn't the junior person who sits in the back room and works for 24 hrs before project submission to get the job done.

The modeller:
  • Is involved from day 1
  • Is recognised as a key member of the advocacy team
  • Has a very importnat role to play as the networker between all the functional groups (marketing, capital cost estimators, production planners, group tax, HSEC etc) which may not otherwise talk to each other
  • Must understand the business process from start to finish
  • Must make the investment proposal transparent
The evaluation model is the end part of the submission process. The really important work is done in the problem framing (what is the issue), the strategy table (what major choices are we making) and then the range analysis. All three steps are major workshops involiving all team members and I say its really important as this is where the GIGO applies - great model is useless with either crap data or the incorrect investment being put forward (not as far fetched as it sounds)

The next important step is the review stage conducted by an independent group of experts. But I'm drifting a little from the Excel part

I actually started writing code in 2001 so that I could more readibly format and audit Excel models

Cheers

Dave