Predictive Forecasting - Your Umbrella for Stormy Times
Once you leave the house without an umbrella and you are already standing in the rain. To make sure this doesn’t happen, check the weather forecasts regularly to avoid unpleasant surprises. But how do you protect yourself from stormy times coming your way? The answer to this question is “predictive forecasting”. What exactly is it in detail and how does it work reliably? We’ll tell you.
The classic forecast
Many controllers are already familiar with forecasting. The term can be translated as “prediction” and refers to a technique in which qualitative or quantitative data is evaluated and a forecast is made for the future. In conjunction with operational planning, statements are made that allow one to determine how close one is to achieving one’s corporate goals. Consequently, recommendations for action can be made that bring the company closer to the desired state.
Why Forecastig reaches its limits
However, what happens in the market is not always linear. As times have changed, the market has become fast-moving, uncertain and difficult to plan. Surprising developments, such as the Corona pandemic, showed us that nowadays you need more than just a forecast to avoid being left out in the cold in dynamic market conditions. In addition, forecasts require a lot of time, which can be wasted within hours. Without the possibility of changing individual parameters and key figures, the result is a general overhaul. Forecasting reaches its limits in planability and predictability when market conditions are constantly changing. But what is the alternative?
Predictive Forecasting helps you reach your business goals faster
Predictive forecasting lets you seize new opportunities Predictive forecasting is the smart extension of classic forecasting. Based on many different parameters, such as trends, cycles and proprietary data, including their fluctuations, it provides comprehensive forecasts. With the integration of key figures from all departments, the entire company can benefit from the results. In contrast to forecasting, the results of predictive forecasting can be used for all-encompassing corporate decisions. For knowledge enrichment, external data is added to the internal data. The analysis of the influencing variables is carried out automatically and continuously adapted to the company’s own values. Emerging risks are nipped in the bud and unprecedented opportunities can be seized.
The crucial difference: Machine Learning
Machine Learning is used to make very precise and specific forecasts. To do this, it processes and analyzes large volumes of structured and unstructured data from many different sources (keyword: Big Data) from which Controlling can quickly and efficiently draw new information. The prerequisite for this innovative forecasting is that all master data, interfaces and logics are coordinated. This requires a good data basis and structure.
By using AI, the system learns from the decisions made and uses the new knowledge for subsequent calculations. In doing so, its goal is to simulate human logical weighing of options - unflinchingly and factually.
With the increasing degree of digitalization, predictive forecasting is an indispensable part of tomorrow’s planning. Excel is no longer a suitable tool for forecasting due to the ever-increasing volume of unstructured data. The newly established tool of the controllers is the clear and self-learning Predictive Forecast. The better output and the saved resources help to advise and support the management more deeply and better. This increases the quality of the results. Gradually, all companies will choose to make the switch in order to remain competitive. It is therefore worthwhile to invest in an implementation ahead of time in order to become a pioneer in the market.
More security and transparency for you
In the interaction of agile business planning and predictive forecasting, you can set well-founded targets for the entire coming year - and also re-plan ad-hoc if unforeseen special effects occur. The possibilities for business growth not only become greater, but also more controllable. This means that you are in the clear even when a storm is brewing on the market and can make decisions on the basis of reliable and clearly prepared data.
Your personal lane keeping assistant with QVANTUM
Let’s summarize: Predictive Forecasting supports you as your lane keeping assistant to direct your attention to where action is needed - so you can achieve your business goals and stay one step ahead of your competitors.
QVANTUM, in cooperation with StatSoft, now offers you the AI module that takes your planning to a new level. Get the best out of your business planning in a smart way. Read also why it is worthwhile to rely on a structured data basis, especially for regular forecasting.