Compass is a native SAP Analytics Cloud feature which enables the simulation of probable impact brought about by driver uncertainties. It utilizes the relationship defined between the driver and target within the SAP Analytics Cloud model. With compass, you are able to perform scenario modeling of different assumptions and compare the probable outcomes.
Create simulations from a story table or the compass start page to answer business questions that you may have. You are able to simulate uncertainties in key drivers and the impact probability right away without additional IT setup or prior mathematical definitions.
Compass Simulations and Time Series Forecast Predictions
It is important to remember that a compass simulation is not the same thing as a time series forecast prediction.
Time series forecasts project the data trend from historical values into the future. It is not reliant on existing mathematical definition between the KPIs. You need to have enough historical data to detect the trend for the desired period into the future. The kind of business questions leading to a time series prediction center around what happens if things develop at more or less the same rate.
Time series forecasts provide answers when you want to know what will happen in the future if the current trend persists. An example of a question you would ask when using a time series forecast prediction could be, What is the predicted operating income if the trend for COGS development in the past 4 years persists?
SAP Analytics Cloud compass simulations use the Monte Carlo simulation, a mathematical simulation method delivering a range of probable outcomes as result. It does not analyze data trends, but instead, relies on repeated calculation using random inputs. This also means that a formula or definition of relation between the impacted KPI and the drivers is required before the simulation can be executed. As this method explores possible outcomes brought about by random inputs, the business questions leading to a compass simulation should center around what happens if things change.
SAP Analytics Cloud compass provide answers when you what to know the probable impact if there are uncertainties to driver performances. An example of a question you would ask when using a Monte Carlo simulation could be, What are the probable results of operating income if the COGS is between 10 to 20 million dollars?
Some typical use cases for compass include understanding the risk context during target setting, budget reviews, strategic or workforce planning, just to name a few. Basically, compass is not limited to any use case, as long as the relationship between target and driver(s) are defined within the SAP Analytics Cloud model.
In summary:
| Compass Simulation | Time Series Prediction | |
|---|---|---|
| Does it require historical data to analyze trends? | No | Yes |
| Does it require defined mathematical relationship between influencer/drivers and the target KPI? | Yes | No |
Can you use time series forecasts and compass simulations together? Yes, you can use both to enhance the attainable insights. For example, you could generate a time series forecast for an observation of what would happen in the future if the current trend persists and then perform a compass simulation on top of the predicted version to understand the risk context if a few key drivers are unexpectedly impacted.