Forecasting tools are essential for every company that seeks to improve the overall business performance management and reaches new stages of development. The digital economy that we are currently experiencing demands more than traditional objectives and plans. What they need today is to develop agile forecasts for all the business areas, as well as to respond faster to market changes and challenges.
However, many businesses fail to give sufficient importance to planning tools, or they are not doing it properly, which means they are always looking for new methods to refine the current approach. In the beginning, organizations might have a lot of questions to answer to: What do we do wrong?, What other tactics might be useful to the current approach?, Are there any tips we don’t know about? The list could continue with even more specific questions, but that’s not the point here.
Fortunately, there is always space for improvement. Even more, we have some tips that companies can use to skyrocket their current approach. See below what are these:
Plans and forecasts should not rely on the previous business performance management alone; they should also take into account the market around the business, as well as the changes for the next period. Shortly said, regardless the industry organizations need to know inside out their customers and competitors.
When a competitor changes its approach, that might also influence changes in your company’s plans. For example, if a competitor suddenly announces a significant discount for a series of products, the business has to rethink as well its approach for budgeting, planning, and forecasting so that it avoids losing customers.
Rigid plans and forecasts are not very useful for companies working in a fast-paced market. Things always change as the year progress and companies have to address these changes and adapt their planning systems to minimize the adverse effects on the business. Organizations that have rigid plans and base their decisions on results extracted months prior might experience faulty and costly consequences. Moreover, the entire company might be affected. The employees would have to work with out-of-date information and metrics, which is counterproductive and even frustrating.
Being flexible in the business playground is a real advantage as companies can adapt to both internal and external changes and create plans and forecasts accordingly. Having the above example in mind, we can understand how crucial this aspect is. In this way, companies will experience more accuracy and better results.
In many cases, companies create planning and forecasting strategies with an internal team, and they are more than satisfied at first glance. However, there might still be space for additional aspects, and they might not even be aware of them. So, even if organizations gather the most knowledgeable and influential members from the top management area, including an external consultant in the project that can analyze each aspect from a different perspective is definitely a good idea.
For instance, an external consultant will be able to identify business issues thanks to its previous experience with planning and forecasting tools. Also, the consultant can recommend different tools and technological solutions that are custom built and suitable for the company’s needs.
A good strategy will be everything that companies need to start improving their planning and forecasting approach. Actually, that’s not how things work today. In the end, many organizations fail to execute the established strategy by themselves.
In these particular cases, companies have the opportunity to implement automated systems to create forecasts and plans without significant efforts. Also, putting in place an automated system that monitors and measures the business progress can significantly impact the planning process.
What’s also important to mention here is that these tools and systems can be customized or adapted to the business needs, and that is why a consultant is critical in this stage, as he or she will be able to identify which is the solution a company needs.
Planning and forecasting are two essential aspects of managers’ agendas. Even though it might seem simple, many details have to be part of the process. We’ve highlighted above some tips and details that organizations should consider when creating plans and forecasts for their businesses performance management.
However, as mentioned above, companies can address the challenges that might appear with the help of a consultancy team or just a person. And even implementing an automated solution for the business is also a great idea.
In case you need more details or help with your planning approach, don’t hesitate to contact us.