The Agreement Modeling Report is a way to plan for changes in agreement labor revenue going forward. The methodology allows for adjustments in either user count (per seat pricing) or managed services labor price change (%) on a client by client basis.

The report shows you the metrics of all your current agreements and allows you to make theoretical changes to them and see how these changes will impact your revenue and profitability.

The report focuses on the labor portion of your agreements. By changing either the  per seat labor revenue or the percent of labor price change, the report can help to establish how goals can be met for revenue growth.

The filters allow you to select either a user count or per seat pricing adjustment for each client:

1. Current Date Range
The current date range can be selected by using a beginning and ending month of your choice or choosing from the Quick Select for a preset date range.
In the report the months that are selected will show the average labor revenue per month using the date range for the values.

2. Client
The report defaults to all clients, but you can also select one specific client.

3. By User/By Node
MSPCFO will use the options for "By User" (default) which is explained in 5. below (user, contacts, combination of the two). When toggled to  By Node, the User/Contact becomes the Node count for the client.

4. Agreement Category
Only look at selected agreement categories. The default will select all.

5. Use Count Method (set up in the Lookup/Options/Agreement Additions/User Count Method)
Two fields can be used to capture a user count:
       i.  MSPCFO uses a per seat setting to measure the number of individual users that are serviced by the agreement. This is done by designating one or more SKU(s)  in the
           Lookup/User Additions table.  The quantity of the SKU becomes the number of users.
       ii. If the agreement is machine-based or does not have a user count, an alternative designation counts the contacts for the company.
The three options are:
a. Use Contacts -  Only use the contacts count.
b. Use User Additions - Only use the User Additions counts defined in the Lookup/User Additions table.
C. Use User Additions  if available, otherwise Contacts - If  User Addition available for a client, use for the count, otherwise use the Contacts count.
The default for the User Count Method in the Options table is Use "User Additions if available, otherwise contacts".

6. Clear Modeling Changes
Checking the box will remove all changes made in the Big Table. The Clear Modeling Changes is different from the Reset button.  
a. The Reset button resets all of the Filter options back to their original settings.
b. The Clear Modeling Changes only reset the two options in the table (Change in Users, MS Labor Price Change %) back to their original settings of zero.

The two Pro Forma tables show a method of calculating financial results using certain projections or presumptions has been used in the Big Table below.  The table to the left shows the Current MS Labor Revenue (monthly average over the current date range) and then shows how the projected changes will impact the revenue from changing  the user/contact count and  price percentage. The table on the right shows the current Effective Rate and Efficiency Ratio the projected values caused by the impacted by the Pro Forma Revenue changes.

What would happen if you raised your labor price by 5% over the next few months for all of your clients in the report? The Bulk Update Results section allows you to see a global change effecting all filtered clients.  
Remember to click the Save button to have the change take effect.

The Big Table is where the projections are made and the results are shown on a client by client basis. Here is a list of the information provided:

       CURRENT AGREEMENT METRICS

1. Client
2. MS Labor Revenue -  MS Labor Revenue for filtered time period divided by the number of months.
3. Users - Either the per seat users or contact count depending on the filter.
4. Agreement Covered Hours
5. Shadow Billable
6. MS Labor per Seat
7. Efficiency
8. Effective Rate
   
   PRO FORMA MODELING METRICS
9. Change in Users - An increase or decrease in user/contact count (entered on a per client basis)
10. MS Labor Price Change (%) - Percent change in revenue (entered on a per client basis)
11. Change in Revenue - Users - The change in revenue caused by the value in (9)
12. Revenue Change - MS Labor Price - The change in revenue caused by the value in (10)
13. Total Change - (11) + (12)
14. MS Labor Revenue -  (2) + (13)
15. Efficiency - pro forma efficiency impacted by (9) and (10)
16. Effective Rate - pro forma effective rate impacted by (9) and (10)

If the toggle is set to By Node the report column headings will not change, but the following columns will be effected:
In the Pro Forma Revenue:
Change due to Users ($) will be replaced by Change due to Nodes ($
In the Big Table Columns:
Column 3. Users will be replaced by Node Count
Column 6. MS Labor per Seat will be replaced with MS Labor per Node
Column 9. Change in Users will be replaced with Change in Node Count
Column 11. Change in Revenue - User will be replaced with Change in Revenue - Node Count

The last row of the Big Table shows totals and averages of each column

Ex. 1 - Test  changes with individual clients.
Analyze the financial impact of changing revenue and user counts in a few individual clients. First sort by Efficiency of the client agreements.
First I set my filters to look at the average revenue and users over the past six months. I sort by Efficiency. I want to raise my labor revenue for low efficiency clients and lower for clients that are too efficient and are flight risks.

I adjust my settings. For two clients (Client 2231 and Client 88) I know the user count will be increasing so I build that into my analysis.  I will raise the low efficiency clients by 15% (Clients 2231, 888 and 2754) and lower a high efficiency client by -3% (Client 222). In the Big Table, I can see how the changes effect the individual client revenue and analytics.

The changes can also be seen in aggregate for overall revenue, efficiency and effective rate in the Proforma Table.

Example 2 - Blanket changes to a category of agreements
One category of agreements is very inefficient. Labor revenue needs to be raised  for these clients. First filter on the specific category. Then use the Bulk Update Results to raise the revenue by 35%.

After filtering on one agreement category, edit the Bulk Update Results to increase labor revenue by 35%. Then Save

All agreements in the category will have increased revenue per month of 35%

The Proforma table will show increase in revenue, efficiency and effective rate.