Planning, budgeting, and forecasting activities are among the most critical tasks that a business should undertake for sustainable growth nowadays. However, the process might sometimes be time-consuming, disliked and even misunderstood. That is a real issue in the context in which the results obtained after Business and Predictive Analytics serve as the foundation for long-term and strategic development.
The need to improve the planning and forecasting processes is already present in companies. Gartner predicts that by 2020, at least 75% of executives will seek to improve the accuracy of financial planning and forecasting, and the result applies to various industries. Also, in the next two years, there will be 25% more organizations implementing different systems to automate the process.
But two questions remain for business owners and executives: What is the role of planning and forecasting? and What exactly can it do to improve my business? For the first question, the answer is simple: the systems aim to correct the mismanagement activities in the business world, by giving companies a way to plan activities based on business data, and also by letting them forecast different aspects of the business.
For the second, it depends on the specific business objectives. But here are some sub-roles that Planning and Forecasting systems can play into a company.
In each company, a well-crafted plan and budget are essential for the entire team. It should be more than just a list of expected incomes and expenses. A proper planning and forecasting process will also help the team to overcome the potential market challenges.
A customized planning, budgeting, and forecasting system is able to automate all these initial first steps so that that team members can focus on more critical business activities.
What is going to happen in the future is more than essential for organizations working in a competitive market. That’s why a system that can automate this aspect is crucial. By using various past sets of data, organizations can extract market pattern and future trends in a meaningful and manageable way.
One more thing is good to be mentioned here: the company’s data is a powerful tool that comes in handy when decision-making people are not convinced of something. Data-based arguments will always win.
As mentioned before, creating a budget from the start is essential for sustainable development of each project. However, ignoring the evolution of the expenses involved in the project is a critical mistake, as things might change a lot during the execution and implementation, and that could affect the project objectives significantly.
Fortunately, the forecasting systems can successfully identify the ups and down when it comes to a project budget. By regularly monitoring the budgets and forecasts, organizations are able to adjust their budgets, so that the objectives won’t be affected.
Trends and patterns are not the only aspects that companies can identify when analyzing data with Business and Predictive Analytics. Challenges and potential issues might also be present in the reports. But the data synthesis, as well as the regular forecasts, will help companies them early on, before becoming severe threats to the organization.
In short, this aspect is crucial as it will allow businesses to save time and money and also the damage that a company can encounter.
There is no doubt that planning and forecasting systems are useful for companies, and regardless of the industry, they can play a significant role in developing any business.