The Last Step: Handing Over the Financial Model

Financial models are complex projects which take months or even years to build. It also needs to be understood that the people developing the financial models are not the same people who maintain it over the long term.

Hence, there is a need for a formal transition wherein the creator of the model must handover the model to the users as well as explain its functions to the team, which will provide support to those users if the model malfunctions at a later date.

Due to the paucity of time, many times, the models are just handed over to the users and the team without any explanations. However, this creates problems during later stages. The correct way of handing over the model and all the stages involved in doing so have been explained in detail in this article.

Stage #1: Workshop

A typical financial model has a lot of complex functionalities built-in. If the functionalities of the model are not explained, both the user and the support team will find it very difficult to operate it once the creator of the financial model is out of the picture. It is for this reason that before the handover actually takes place, a workshop needs to be undertaken.

This workshop must include a step by step, thorough, walkthrough of the financial model. The users and the support team must be made aware of the various features which have been built into the model as well as the rationale behind doing so. The various documents created during the testing stage should also be shared with the users as well as with the support team.

During this workshop, both the end-users, as well as the support team, should be provided information about the detailed working of the model. The functional specs should be discussed in detail with the end-users. At the same time, the functional, as well as technical specs, should be explained to the support team.

The modeler needs to create detailed documentation clearly outlining the standard operating procedure which needs to be followed by business users. Also, the technical documentation needs to be shared with the support team. Generally, information relating to all versions of the financial model is provided to the support team.

Stage #2: The Go-Live

After the workshop becomes successful, the modelers, the business users, and the support team should all agree upon a go-live date. This process is relatively straightforward.

At first, the technical team ensures that all the computers on which the model is going to be installed have the computing power required to run it. Secondly, the mechanism of transferring the model is agreed upon.

In some cases, the model is placed in a central location, whereas in other cases, it is installed on each and every computer. The assumption database, training manuals, and other such documents should also be transferred to the end-users.

The creator of the financial model is responsible for ensuring that the users are comfortable using the model. This is the reason that they provide support for some time before the model becomes the responsibility of the support team.

Stage #3: Post Go-Live

The creator of the financial model will be directly responsible for maintaining the model for a limited period of time. Issues found later will have to be referred to as support and maintenance teams. It is important to clearly define the time for which this post-go-live support will be provided.

Users should also be encouraged to use as many features as possible so that issues, if any, are resolved at the earliest. The process should then end with a sign off from the business users. A lot of problems arise at later stages if the post-go-live process is not handled smoothly. A lot of the problems can simply be avoided if the person identified to maintain the model can be included in the model creation process as well.

Step #4: Integration with Existing Systems

Financial models are seldom used in isolation. Instead, the output from one model becomes the input for another model. This part will usually be managed by the support team. However, the development team should keep this in mind while creating and handing over the model. The technical specifications of the new model should be compatible with the existing model so that all of them fit into an ecosystem.

Financial modeling projects have become remarkably similar to information technology projects. Hence, it would be fair to say that financial modelers can learn a few things from the methodologies used by big infrastructure companies in order to manage their projects.