Overview
Let’s talk about Compass—and why it might just be the tool you didn’t know you needed!
At its core, Compass is designed to make Monte Carlo simulations accessible to everyone, not just data scientists. So, what’s a Monte Carlo simulation, you ask? It’s a method that helps you predict the potential outcomes of situations where key factors might change, but you’re not sure exactly how.
For businesses, this is a game changer. Whether you’re trying to figure out your operating income while inflation bounces around, or you need to estimate how many people you’ll need to hire based on turnover and hiring rates, Compass makes it simple. It’s also perfect for planning investments or managing cash flow when costs and returns are unpredictable.
What makes Compass so awesome is how easy it is to use. Forget about dealing with complicated formulas or needing a degree in math. Compass simplifies the whole process with an intuitive, click-and-run interface. You can generate random simulations, analyze different scenarios, and get insights—without the need for coding or spending hours wrestling with spreadsheets.
It’s all about making smarter decisions with less effort. So, if you’re tired of guessing what might happen and want a clearer picture of your business future, Compass could be exactly what you’ve been waiting for. How do you think this could help in your world?
What is Monte Carlo Simulation?
Monte Carlo simulation is a statistical method used to understand the impact of uncertainty and variability in a system or process. It involves using random sampling to simulate a wide range of possible outcomes. This technique is used in a variety of fields like finance, engineering, physics, and more. The key idea is to run many simulations to get a distribution of possible results, which helps in decision-making when faced with uncertainty.
Prerequisites
Compass will be accessible under the standard planning license.
Procedure
Accessing, Scenario Modeling & Comparison
Compass can be accessed in two ways, which are detailed below:
- Go to More -> Compass
- Go to Stories -> Right Click on Data region -> Create Compass Simulation
Create “What-if” scenarios based on different driver fluctuations and categorize them for comparison. This helps evaluate strategies or the impact of uncontrollable events. Selected outcomes can be displayed side by side to compare risks and chances.
From the Home Page, Click More -> Compass -> Create Simulation
Enter the Model Name, Target Measure, and Account Name, along with the filters for detailed simulation results. Then, click OK.
Note: The date dimension is a required filter.
A private scenario will be set up using the screen below. Please enter the Scenario Name, Description, and Version for the simulation and Click Create.
The main screen for Compass consists of 3 sections, as below.
Section 1: Private & Public Scenarios
Section 2: Driver and Distribution Configuration
Section 3: Comparison Scenarios
Multidimensional Simulation
Adjust performance fluctuations across various dimensions, such as products, regions, and periods, to simulate their effects on a target. The user-friendly interface allows for easy changes to these drivers without coding, enabling quick integration of geographical or business segment aspects into risk analysis while ensuring transparency in assumptions.
Insights into Pessimistic / Realistic / Optimistic Cases
The impact distribution and risk context of each scenario is clarified through a graphical representation of pessimistic, realistic, and optimistic cases, showing boundary values and percentiles.
Simulation with Private and Public Scenarios
In a compass simulation, scenarios can be used privately or shared publicly, enabling collaboration and traceability of assumptions at the individual level.
Driver Configuration
Once you select a KPI, Compass will automatically identify all the relevant drivers in the model, so you can start the simulation instantly. All you need to do is input the expected minimum and maximum values for each driver, which will guide the impact calculation. You can also specify how the fluctuations should behave, choosing between a normal or uniform distribution, depending on how you expect the drivers to vary.
Select Drivers from the list below.
Select Distribution from the list.
Select the Distribution Type.
For Distribution, you select the type of probability distribution that defines the possible values of drivers. Normal Distribution and Uniform Distribution are two options available.
Normal distribution is a type of probability distribution where values are centered around a mean (average) and spread out symmetrically.
Uniform distribution is a type of probability distribution where all values within a specified range are equally likely to occur. There is no central clustering of values; every possible outcome in the range has an equal chance of being selected.
Instant Activation/Deactivation of Driver Effects
Click once to add or remove uncertainty effects in simulations without changing the scenario and Click Run Scenario. This lets you quickly experiment with different assumptions.
Run the Scenario between Preview, Medium, and High Precision, which is a choice between 1,000,10,000 and 100,000 calculation.
Summary
In conclusion, Compass isn’t just a tool—it’s a game changer for anyone looking to make more informed, data-driven decisions without complexity. By making advanced Monte Carlo simulations accessible and easy to use, it empowers business leaders to plan for the unknown with confidence. Whether you’re navigating financial uncertainties, managing resources, or planning future investments, Compass takes the guesswork out of the equation. Ready to take your decision to the next level? Compass is here to help you make smarter choices, faster.
