Earlier today, the UK water regulator Ofwat published its draft price control model for PR24. You can view the full model for yourself here, and the full consultation is also available here. Ofwat developed the model using the Openbox financial model build software.
The Ofwat model deals with complex and important issues, and so it is necessarily big and complex. Gridlines helped Ofwat on the PR19 model, and supported them to build the draft PR24 model, so we know it well. There are several thousand unique calculations, and the Excel version weighs in at about 10MB. This is not the sort of model you can wrap your head around quickly.
Check the map
In previous years, Ofwat has provided model maps and other documentation to help the water industry and others. But that documentation is hard to maintain, quickly becomes out of date, and is static.
With Openbox, the maps are the model. They are always up to date, because they’re what the spreadsheet is produced from. It’s easy to (for example) start with allowed revenue, and then work your way back through the chain of calculation to see what the key drivers are. You can show it to people who aren’t spreadsheet experts, and they’ll instantly grasp what the model is doing – and the spreadsheet is always shown alongside, so you can always see the numbers. All you need is our free Openbox viewer software, which you can download from here.
This is separate from the time savings and built in error checks which Ofwat benefited from when building the model. But you’ll have to ask them about those 😊.
In short, the Ofwat model highlights exactly why we built Openbox. As professional modellers, we want models that can be built quickly and are easy to use. They must be clear, built to a professional standard, and include lots of help for the model user. And all still available as a spreadsheet that can be shared with anyone. There’s no need to have Openbox to use the Ofwat model. Openbox only adds to your modelling toolkit, rather than locking you in.
We’ll be running a free short webinar to demonstrate how to use Openbox to find your way around large complex models like the Ofwat one. The event will run at 11AM London time on Monday, July 18th. Register here.
Building models using Openbox
If, like the Ofwat modelling team, you build large financial models for a living, consider what Openbox could do for you. You’ll make model users happier, because they can more easily understand your model. You’ll also make your team much more productive, reducing time to build and reducing model error.
Good modellers are hard to find – that’s our key lesson from decades in the industry. What if you could double the productivity of the great team you already have? What if, instead of taking days for even a rough first draft of the model, you could have one in hours?
We would be delighted to run a demo for you and your team to show you how Openbox can help. Click here to book a demo. Openbox comes with a free 45 day trial, so you can be sure it is right for you. Contact us if you have any financial modelling enquiries.