Modifier Drivers

1

What is a modifier driver

Modifier drivers are series that adjust other drivers or variables. They rarely represent real world quantities by themselves.

Typical forms:

  • Percentages or multipliers.

  • Index values that scale a base value.

  • Scenario factors that tilt another series up or down.

  • Seasonality factors applied to a base trend.

Examples:

  • Driver - Modifier - Scenario Scale - Revenue

  • Driver - Seasonality - Retail - Monthly Index

  • Driver - Discount Factor - Customer Incentives

  • Driver - Modifier - Cost Saving Programme

These drivers are usually dimensionless or expressed in percentages rather than cash or unit terms.

2

Modifier drivers vs other drivers

Compared to other drivers:

  • Economic drivers represent external conditions such as prices, FX or interest rates.

  • Operational drivers represent internal activity such as units, headcount or utilisation.

  • Modifier drivers represent the way you adjust other series to represent discounts, uplift, seasonality or scenarios.

Modifiers are layered on top of economic and operational drivers rather than standing alone.

3

Storing modifier drivers

In the Data Library, name and tag modifier drivers clearly, for example:

  • Name: Driver - Seasonality - Subscriptions - Monthly

  • Units: Index or Percent

  • Tags: Seasonality, Modifier, Scenario

Typical values and meanings:

  • 1.0 for no change.

  • Above 1.0 for uplift.

  • Below 1.0 for reductions.

  • Or percentage values that are applied as gross up or discount rates.

Document in the notes how the modifier should be interpreted in formulas.

4

## Using modifier drivers in formulas

Examples of how modifiers can be used:

  • Scenario scale

    • Formula: {% code title="Scenario scale" %}

      Revenue = BaseRevenue * ScenarioScale

      {% endcode %}

    • Where ScenarioScale is greater than 1 in upside scenarios and less than 1 in downside cases.

  • Seasonality

    • Formula: {% code title="Seasonality" %}

      Revenue = BaseTrend * SeasonalityIndex

      {% endcode %}

    • SeasonalityIndex represents relative strength within a year while preserving the annual total.

  • Discounts and promotions

    • Formulas: {% code title="Discounts and promotions" %}

      NetPrice = ListPrice * (1 - DiscountRate)
      COGS = BaseCOGS * CostReductionIndex

      {% endcode %}

Modifiers let you express these relationships without changing the underlying economics or operations drivers directly.

5

Scenario design with modifiers

Modifier drivers are particularly useful for scenarios because:

  • You can keep base economic and operational drivers stable.

  • You overlay scenario effects using modifiers.

  • Modifiers can be toggled or edited without needing to touch core series.

Examples:

  • Driver - Modifier - Downside - Revenue that gradually reduces revenue relative to base.

  • Driver - Modifier - Cost Saving Plan that reduces certain Opex categories in transformation scenarios.

  • Driver - Modifier - Capex Deferral that shifts some investments later in the horizon.

This keeps scenario logic explicit and easy to compare.

6

Good practice for modifier drivers

Guidelines:

  • Make modifier names very clear about their purpose and scope.

  • Keep base drivers and modifiers separate so you can see both the underlying plan and the adjustments.

  • Use values of 1.0 as the neutral baseline when using multiplicative modifiers.

  • Document how modifiers are applied, especially if multiple modifiers stack on the same variable.

Transparent modifiers make scenario conversations much easier with non modellers.

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