Understand and create Periodic Change Drivers
How Periodic Change Drivers are used
Periodic Change Drivers are useful for creating outputs that change over time using a predefined curve or step function. You can set the value to change monthly, or by any number of months. The curves can float with variable dates like Plan Start, Plan End, Plan Cutover Date, or you can anchor the curve to a specific point in time using an absolute date.
You can specify an initial seed value that is then changed over time. Periodic Change Drivers can be used to make all kinds of assumptions like increasing conversion rates, reduction in costs over time, etc. Absolute dates also help us model things like expected rent changes which may be tied to calendar years rather than planning windows.
How to create a Periodic Change Driver
In this example, we will be planning for advertising costs to increase by 5% every quarter.
Go to Plans> Drivers
Create New Driver
- Set category to Periodic.
- Choose the function (add or multiply).
- Choose the change amount. In this example we want to increase by 5%, so multiplied by a change of 1.05.
- Set the period of change. In this example we want the change to happen every 3 months.
- Choose seed value. In this example we start with $1,000 monthly advertising spend.
- Choose the seed start date. In this example we want the periodic change to begin at the cutover date of the plan.
Set Driver Rate to Constant of 1.
Here is the finished example:
We can make sure our driver is functioning as expected by navigating to Plans> OpEx and viewing the driver in the Marketing and Sales Expenses account:
You can see that the amount of $1,000 is increasing 5% every quarter as we built in the Periodic Driver.