52. The financial model and the key assumptions upon which it rests should be capable of being read and understood by the IPT. The financial model is often be a document produced in isolation with very few people involved with its production and iteration and, in consequence, very people aware of its role in capturing key pricing assumptions.
53. IPTs should periodically instruct their financial advisers to report to both the commercial and technical elements of the team on the progress of the financial model. During negotiations it is very important that the financial modeller is kept up-to-date with developments and (crucially) is able to react from a financial model perspective on any revised positions which impact on price (see paragraph 23). The key message is that the modeller (if not in the actual negotiations) should keep pace with the negotiations so that the model is as up-to-date as possible. IPTs need to develop a strategy for ensuring that this is achieved whilst still maintaining the required degree of momentum in negotiations.
54. If a methodology can be established whereby at key points (and say at least once a week) the modeller is brought up to speed then all parties should benefit from much better informed negotiations with less scope for surprises nearer the completion date. On an uncompetitive re-pricing as well as understanding how the revised price impacts on the component parts of the NPV calculation it is important that IPTs understand how any underlying assumptions in the financial model have been developed or changed - this cannot be achieved unless the model is readily understandable by and transparent to the IPT.