Five advices for better forecasting

Most businesses need more accurate forecasts to ensure optimal resource utilization and better results. Technology has given us new opportunities and it is time to think anew!

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1: Take reality seriously

While virtually all businesses have advanced systems for reporting historical data, the situation is quite different for planning and forecasting. Most people use manual spreadsheet models and a lot of time is spent collecting, checking and moving data and maintaining complex models. The focus is on producing data rather than analyzing data.

At the same time as both the rate of change increases and the deadlines become shorter, the finance department is facing big data challenges. Models for planning and analysis can have hundreds of millions of data points. The spreadsheet is not built for complex planning processes and old technology is not designed to handle such challenges appropriately.

Accenture claims in the report "Finance 2020-death by digital" that "Cloud-based platforms will become the predominant technology for reporting, planning, forecasting and analytics in the finance organization." New 64 bit in-memory, new database technology and new cloud-based solutions optimized for real-time planning and analysis have already been implemented and offer completely new possibilities.

2: Integrate financial forecasting and operational planning

However, when financial forecasting and operational planning are isolated processes, it can lead to labor-intensive processes with many sources of error. The consequence may be poorer financial results and reduced competitiveness. With modern tools, anyone can work with the same, updated and correct data in real time at any time.

 

Morten Jonassen

Planning Specialist

morten@bluesprint.no

Morten-Jonassen

3: From calendar-driven planning to continuous improvement

Under rapidly changing environments, planning cannot be done two to three times a year based on the calendar. The financial budget can be seen as a goal and framework for delegating authority that is fixed throughout the year. You can measure against the budget, but not control it. The formal reporting processes are calendar-driven, but operational management and leadership require up-to-date facts.

4: From accounting focus to business focus

Coordination of operational plans and financial forecasts requires that the focus be shifted from accounting to business. Planning takes place at the level where decisions are exercised and apply the concepts that are relevant to the individual department.

Account and cost center tables are not suitable for operational planning. Within production and trade, planning is often done at Stock Keeping Unit (SKU) level, the sales department operates with both salespeople, customers and possible projects, HR with the individual employee and the marketing department with segments and campaigns from date to date. Inequality is the key word. Coordination is the challenge.

5: From gut feeling to predictive analytics

Predictive analytics can make a valuable contribution to increasing forecast quality. But the analysis results must be shared with others who need them and put in a holistic, financial context. Old budget applications are not designed for this. In many cases, modern solutions have built-in predictive analytics functionality and are based on technology that is suitable for handling large volumes of data in real time.

What can we do for you?

Bluesprint can offer you tailor-made solution based on your needs that help you improve your business management. In addition to financial solutions, we also have systems for you who work in HR, sales, marketing or other areas. Only the imagination sets limits! Curious? Press the button to learn more about us and Connected Planning.

Categories: Anaplan, Bluesprint, Bluesprint and Anaplan, budget, connected planning Anaplan, dynamic budget, forecasting, planning, rolling forecasting, simulation, Virksomhetsstyring and what if analyse.