It is imperative for companies to adopt a well defined modelling methodology. A best practice modelling methodology reduces model risk and increases user confidence. It also increases modelling productivity and professionalism.
Navigator’s(http://www.navigatorpf.com) best practice modelling methodology, SMART, is a set of best practice guidelines, internationally applauded for effective and professional financial modelling and the principles Corality practices when building financial models.
The SMART modelling methodology helps people build better models which decreases model risk and increases the confidence of all users.
Benefits of modelling the SMART way
Adopt SMART to
• Reduce model risk
• Increase user and management confidence
• Increase modelling productivity
• Allow model audits to be performed on time and cost effectively
I encourage organisations to adopt the SMART methodology. By adopting SMART you are aligning your modelling methodology with accepted industry expertise and lowering model risk. The benefits of consistent presentation, ease of use and low error rate will be evident when presenting your models to committees and stakeholders both internal and external. The approach includes a program for accreditation and Navigator can assist you when implementing SMART within your organisation.
The SMART modelling approach - transparency, flexibility and presentation
The SMART financial modelling methodology emphasises transparency, flexibility and presentation and introduces rules that underpin how Excel can be used to achieve this. When followed, these rules ensure you develop robust and flexible financial models that achieve not just their design objectives but the objectives of all users.
• Transparency: A transparent financial model is clear, simple and easy to understand. It enables updates and reviews to be made efficiently and cost effectively
• Flexibility: A flexible model can accommodate significant updates or different scenarios quickly and reliably without having to undertake significant structural changes.
• Presentation: The presentation and style of a model assists users to operate it effectively and top interpret and communicate the results
Download the SMART User Manual and Demo Model
SMART is easily accessible on Navigator’s website www.navigatorpf.com/smart. Here is where you find everything you need to start modelling the SMART way, including the SMART user guide and demo model. Together, they illustrate the SMART principles and how to adopt them in practice.
Why the name SMART? Have a peek into the minds of the SMART developers to find out.
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