Planning and Forecasting

A New Approach to Business Forecasting

By Steve Morlidge, Business Forecasting thought leader, author of "Future Ready: How to Master Business Forecasting" and  "The Little Book of Beyond Budgeting" 

Many millions of people are stuck with the habit of smoking. They know its bad for them and it will eventually kill them, yet they continue. They may have tried to quit many times but they are stuck in a rut. Experience has shown that to successfully break habits you must stop things as well as start doing new things.

The current practice of management exhibits some very bad habits. One key cause is an underlying philosophy of “command and control.” Managers know it is bad for them and it kills motivation, initiative, flexibility and innovation on a daily basis.

The 11 Commandments of Supreme Forecasting

By Timo Wienefoet, Managing Partner at IMPLEXA GmbH

The Superforecasters were assessed according to Brier scores. A certain mindset combined with a resolute feedback environment led to extraordinary results. Philip Tetlock, author of "Superforecasting: The Art and Science of Prediction", came up with 11 methodical commandments that can be followed to attain  supreme forecasting skills.

      Three Stages of Rolling Forecast Maturity

      By Larysa Melnychuk, Managing Director at FP&A Trends group

      Rolling Forecasts  are an essential tool for financial planning and analysis (FP&A), with a potential to radically transform corporates’ traditional budgeting process.
      The London FP&A Board of senior practitioners’ most recent meeting focused on why Rolling Forecasts  are ideal for financial planning and analysis (FP&A) professionals. It also discussed best practice and the ‘Three Stages of Rolling Forecast Maturity’ model, summarised in this article.

      The latest meeting was again jointly sponsored by Metapraxis, the consultancy, analytics for financial professionals and software provider and Michael Page, the global specialist recruitment firm.

      Dynamic FP&A: How to Design Data Driven Planning Architecture

      by Michael Coveney, author of "Budgeting, Planning, and Forecasting in Uncertain Times"

      Data driven planning  is fast becoming an essential requirement for organisations operating in today’s volatile, global business environment.  It requires organisations to rethink the way it manages its business processes, the way strategy is implemented and monitors, and it needs a modern architecture that transforms planning into a continuous data driven process.

      Relying on outdated management processes makes no sense and will cause organisations to fail in their quest.  Similarly, inflexible, silo-based planning systems will slow down organisational decision-making and prevent organisations from reacting to critical external events.

      It’s time to change.  To let go of ineffective management practices and to embrace common sense, supported by architectures designed for today’s business environment.
       

      Data Driven Planning: The 7 Key FP&A Models

      by Michael Coveney, co-author of "Budgeting, Planning, and Forecasting in Uncertain Times"

      In this article, I want to make the case for data driven planning to describe the 7 key FP&A models that every organisation needs to plan, resource and monitor business performance.

      From a planning and review perspective, there are 7 key things that management needs to know about its business processes, each of which can be assessed in a range of analytical models:

      • How efficient and effective are the organisation’s business processes? (Operational Activity Model)
      • What trends are ‘hidden’ in the detail? (Detailed History Model)
      • What long-range targets should be set given where the market is heading? (Target Setting Model)
      • Where is the organisation heading if it continues with its current business model? (Detailed Forecast Model)
      • What could be done differently to better meet long-range targets and how much would it cost? (Strategy Improvement Model)
      • What choices/risks do management face and what would be the impact on corporate goals? (Scenario / Optimization Model)
      • How much funding is required to implement the plan and where will it come from? (Cash / Funding Model)

      The models that answer each of these questions have different content, structures and are used by different people at different times.  However none can be omitted or ignored, and all need to operate as a single, data-driven management system.

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