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Planning and Forecasting

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.

      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.

      The Purpose of Planning and Why It Often Fails

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

       

      Most people will agree that planning is a vital activity for every corporate body.  It is often carried out according to a management calendar.  Long-range and resource planning tends to take place on an annual basis, forecasting tends to be quarterly, while reporting is monthly driven.  This timetable of planning events was established back in the 1920’s where James McKinsey described budgeting as a way of setting standards of performance and a means of coordinating activities between departments.  There’s nothing wrong with this concept of planning, but today’s business is very different from that of 100 years ago.

      With the advent of the Internet and e-commerce, physical boundaries have been removed making it relatively easy for competitors to enter new markets with new products in a fraction of the time it took in the past.

      Different Planning Methods for FP&A

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

       

      Planning involves many kinds of methods that help managers make decisions. It goes without saying that any planning system must be able to handle both financial and KPI information, it must be able to model the different business structures (products, departments, customer groupings) and possess good reporting and charting capabilities. It should also be able to report data from both a financial viewpoint as well as a strategy view through dashboards and strategy maps, as well as be multi-user that allows secure access to people with different roles.

      We will look at the different methods an organization can use to set direction. 

       

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