Driver Model

A model is a structured representation of business logic constructed from an interconnected hierarchy of rows. Instead of using scattered formulas, a model organizes logic into a hierarchy of rows, where:

• Inputs feed into calculations

• Calculations roll up into parent rows

• Relationships define how values flow across the model

This approach ensures that your planning logic is centralized, transparent, scalable, and easier to maintain.

Driver Model

A driver model is a type of model in which the outputs are determined by key input variables called drivers. Drivers are the key inputs that influence business outcomes. Examples include units sold, price per unit, headcount, production volume, etc. These drivers are linked to outputs such as revenue, costs, or demand through formulas or proportional logic.

How a driver model works

In a driver model, you first create a model with a hierarchical structure of connected rows representing business logic. Next, using the rows,

1. Define the drivers (input variables)

2. Establish relationships between drivers and outputs

3. Calculate outcomes using formulas or proportional logic

The following formulas illustrate how input drivers can be connected to business outcomes.

Revenue = Units Sold × Price
Total Cost = Headcount × Cost per Employee

Driver-based modeling also aligns with allocation concepts, where values are distributed proportionally based on a driver’s relative contribution.

Why use a driver model?

• Run what-if scenarios by changing assumptions (drivers) to see instant results.

• Improves decision-making with clear cause-and-effect relationships.

• Simplifies forecasting by focusing on key business levers.

Model Builder

In Planning sheet, when you select Driver Model, the Model Builder is enabled.

Model Builder is a no-code, flexible interface for creating and managing advanced and driver-based models.

Capabilities of Model Builder

• Create models through a WYSIWYG interface, with guided interactions, menus, and dropdowns.

• Customize with various row types, formulas, and aggregations.

• Use templates to reuse repetitive model structures.

The image below shows the Model Builder interface before a model is built:

From here, you can create parent rows, add related line items as child rows, and define how values flow through the model.

Use cases

The Model Builder supports a wide range of planning scenarios, including:

• Financial Planning & Analysis (FP&A)

• Supply chain planning

• Headcount planning

• Operations planning

• What-if P&L reporting

• 3-Statement financial model

• Weekly sales forecasting

• Budgeting and so on.

By organizing logic into a model, you can build reusable frameworks that adapt to changing business needs.

Next step

• Create a model using Model Builder.

Related content

• Create a driver-based model.

• Visualize the model using the tree layout.