In this programme we talk to Alasdair Black and Tim Purton of the City of Edinburgh Council’s Strategic Projects team. Alasdair and Tim’s team take lead finance role in key projects in the City such as the Zero Waste and 21st century homes projects.

In this podcast we discuss:

• How Edinburgh City Council have saved over £100,000 per year by standardising financial modelling;
• How adoption of the FAST standard improved the relationship and effectiveness of the Council’s relationship with its financial advisers, Ernst and Young;
• The challenges the team faced in adopting the FAST standard and how these were overcome.

This podcast will be of particular interest to organisations trying to improve the quality and productivity of their financial modelling team by adopting a standard approach.

Some of the key lessons that Alasdair and Tim mention are:

• Invest in high quality financial modelling training;
• Communicate with modellers to understand their objections about adopting a standardised approach;
• Demonstrate the benefits – one of the key successes of the standardisation project in the Council was their ability to own the financial model and run it ‘in real time’ in meetings – providing insight and answers straight away, something which would not previously have been possible.

If you would like to comment on any aspect of this programme, please leave a comment below – we would welcome your observations and feedback.

In the podcast Kenny also promised to put up a link to a recording of the webinar we did a few weeks ago with Stephen Few. The recording is available on Financial Mechanics TV.  You can also download the slides of Stephen’s presentation, entitled “Financial narrative: Telling stories with numbers.”

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

This podcast is the second of our two part series looking at the impact of the financial crisis on financial modelling in the infrastructure finance and PPP sector. In the first part, Hugo Teixiera of West LB gave his perspective on the financial crsis and discused the some of the impact on financial modelling. In this podcast, he  talks about:

• the difficultes he has in reading many of the financial models he sees;
• his frustrations at how much time he wastes when modellers do not present analysis clearly;
• how new structures, increased intervention from banks, investors and sponsors and the increased role of institutions such as the EIB and the EBRD are increasing the need for real fleixbility in financial models;
• why increased risk aversion is leading credit officers to require financial models to run more extreme scenarios, often causing the model to ‘break’;
• why complex models that only the modeller understands are no longer tenable and why now is the right time for a set of shared standards.

Hugo put together a useful presentation to accompany the podcast.

Download Hugo’s presentation here.

About Hugo

Hugo focuses on the analysis, structuring, approval, and execution of project, corporate, and acquisition financings for clients in the Infrastructure and Energy sectors globally.  Recent experiences include leading the WestLB credit team on the acquisition of Gatwick Airport and the financings of the M25, FSTA as well as the refinancing of Henderson Infrastructure. Hugo is responsible for the WestLB’s Project Finance Cash Flow Modelling Centre of Competence and is also a cash flow modelling trainer.

Hugo joined WestLB from London Underground where he was Senior Manager on the Commercial Finance, Advisor and Risk team where he was involved with the restructuring of Metronet.  Prior to this, Hugo worked with the Infrastructure team at PwC in London, in Corporate Finance at BPI and in Wholesale Banking at BES. Hugo is a Chartered Financial Analyst (CFA) and a Chartered Accountant (CTOC) and holds an Economics degree from Oporto University and an MBA from Warwick Business School.

If you would like to comment on any aspect of the podcast, please leave a comment below – we would welcome your observations and feedback.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

In the first of a two part programme, Hugo Teixeira of West LB gives the background to the financial crisis and how this has affected the modelling of infrastructure and PPP projects. In this podcast we discuss:

• How banks are segmenting the PPP / infrastructure market
• What the impact of the financial crisis has been on lending structures in the sector
• Why are projects taking longer to close and being cancelled more often
• How bank’s credit risk departments have responded
• How the crisis has changed the way banks look at financial modelling
• How financial models should be built to best deal with these new realities
• Why professionally built template models often start out well at the start of a project, but gradually degrade over time

Hugo put together a useful presentation to accompany the podcast.

Download Hugo’s presentation here.

About Hugo

Hugo focuses on the analysis, structuring, approval, and execution of project, corporate, and acquisition financings for clients in the Infrastructure and Energy sectors globally.  Recent experiences include leading the WestLB credit team on the acquisition of Gatwick Airport and the financings of the M25, FSTA as well as the refinancing of Henderson Infrastructure. Hugo is responsible for the WestLB’s Project Finance Cash Flow Modelling Centre of Competence and is also a cash flow modelling trainer.

Hugo joined WestLB from London Underground where he was Senior Manager on the Commercial Finance, Advisor and Risk team where he was involved with the restructuring of Metronet.  Prior to this, Hugo worked with the Infrastructure team at PwC in London, in Corporate Finance at BPI and in Wholesale Banking at BES. Hugo is a Chartered Financial Analyst (CFA) and a Chartered Accountant (CTOC) and holds an Economics degree from Oporto University and an MBA from Warwick Business School.

If you would like to comment on any aspect of the podcast, please leave a comment below – we would welcome your observations and feedback.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

In this podcast we talked to Ray Panko about his research into error rates in spreadsheets.  Ray is a well known figure in the financial modelling world as he has spent a long time researching errors in financial modelling (and indeed has co-developed a taxonomy of spreadsheet errors). In this podcast Ray discusses spreadsheets in specific, but also the broader area of human error research.

Ray has the good fortune to be based out of the University of Hawaii. When we spoke to him Kenny was in London and Morten was in Delhi which meant that between the 3 of us we nearly covered all the world’s time zones (although Kenny got the raw deal as our call was at 7am London time!).

Ray will be speaking on identifying errors in spreadsheets at the upcoming EUSPRIG conference in London. If you’d like to find out more about the conference, you can view or download the programme, or register.

Also, if you haven’t yet signed up for the Stephen Few webinar on July 13th, you can register here.

If you would like to comment on any aspect of the podcast, please leave a comment below – we would welcome your observations and feedback.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

In an exception to our normal monthly podcast schedule, we present a short 10 minute preview of this year’s EUSPRIG conference which takes place in London on July 15th and 16th.

In this podcast we talk to Dr Simon Thorne, who in addition to being one of the organisers of the conference,  is a Lecturer in information systems and computing at the University of Wales Institute Cardiff. Simon completed his PhD in 2008 on the subject of alternative modelling techniques for the reduction of error in decision support spreadsheets.

If you’d like to find out more about the conference, you can view or download the programme, or register.

If you would like to comment on any aspect of the podcast, please leave a comment below – we would welcome your observations and feedback.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

In this programme we talk to Jerome Brice, Partner at Accountancy firm Mazars about the model audit business. In the podcast Jerome discusses:

• The approach Mazars take to model audit, comparing their ‘model replication’ methodology with what Jerome calls the ‘tick and bash’ approach of some other audit firms;
• What factors influence how long a model audit takes (and therefore how much it costs);
• The impact of the financial crisis .

If you would like to comment on any aspect of this programme, please leave a comment below – we would welcome your observations and feedback.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

One of the members of the CEC team, Alasdair Black, Finance Manager at the Zero Waste Project, summarised the project team’s experiences:

“I think maybe some members of the project team were a bit apprehensive to take this on – it was potentially a big risk and it might have been safer to go down the tried and tested route. Now, the standardised approach is mentioned internally as a great thing and good value for money. It works well for everyone – we have had good feedback from the project board and the consultants are supportive of it.”

Gordon Pollock, Project Manager for Zero Waste said,

“As the client, high quality modelling support is non negotiable. Adopting the FAST standard has facilitated this service being provided internally. I have the full support and confidence I need. Also, a lot of money has been saved that would otherwise have been incurred on consultants”.

For subsribers to IJ online, the article is available here. Alternatively you can download a PDF copy.

In this programme we talk to Tom Grossman, Associate Professor of Business Analytics at the Universty of San Fransisco. Our conversation focused on the Business Analysis Lifecycle framwork that Tom contributed to developing.

This framework makes a very helpful distinction between the elements of business analysis that take place in the ‘real world’ and those that take place in the ‘model world’. Within the model world a key insight that we have found useful is between ‘conceptual modelling’ and ’spreadsheet engineering’. The FAST standard focuses on the spreadsheet engineering element; once the conceptual model has been developed, turning that into a well structured spreadsheet is little more than applying well documented rules of model engineering.

Tom makes a insightful statement during the podcast that when his students are struggling to make their model clear, more often than not it’s because they are struggling to make their thinking clear, that is, they do not have have a well formed conceptual model of the entity they are trying to analyse.

As you’re listening to this podcast, we recommend that you download this one page PDF of the Business Analysis Lifecycle framwork.

You can listen the podcast using the player below, or you can subscribe to receive it automatically every time we publish it on iTunes.

The podcast is being supported by the FAST modeling standard with the purpose of exploring and discussing topics of interest to all financial modelers. We have a great selection of guests lined up over the coming months. Episode 2 is already in production and will be available on iTunes in a few weeks.

You can download and subscribe to the podcast on iTunes.