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Model Development

The Six Stages of Model Development

Our modelling methodology follows a six-stage construction process:


  • Recognise context, obtain internal ownership, identify key stakeholders and end users.
  • Need to define the purpose / objectives, content, flexibility and boundaries of the forecasting model (e.g. key outputs, core assumptions, limitations).
  • Ascertain how project will fit in with existing processes (e.g. budgeting, statutory reporting, internal auditing).


  • Tailor structure to circumstances.
  • Confirm what’s in and what’s out.
  • Ensure consistency with and non-duplication of existing processes (e.g. Accounting / Management Information Systems and existing Excel files).
  • Firm up periodicity and timelines.


  • Plotting the high-level relationships identified in the Planning stage helps to understand the main issues.
  • Building up logical linkages gives rise to an influence diagram which can readily be used to construct a very simple, yet highly relevant communicative tool and / or strategic model.
  • Can be used to evaluate the impact of different choices taken and assess the impact of the variability of forecast data going forward (one indicator of risk).


  • Construction in accordance with your wishes in accordance with recognised best practice modelling principles.
  • Logical build structure.
  • Regular updates / discussions with key stakeholders.


  • Models must be tested before going ‘live’.
  • Incorporate checks into the model.
  • Various types of review:
    • By stakeholders / end users.
    • By third party model auditors.
    • Self review.
    • High-level analytical.
    • Detailed line-by-line.


  • Develop Model User Guide, where necessary.
  • Present to key stakeholders.
  • Train end users.
  • Provide on-going support as required.