How to Master Predictive Planning and Forecasting: Insights from Zurich FP&A Board

November 7, 2024

By Paola Bolderman, former Senior Vice President Group FP&A, CFO Green Technology Solutions Division at Marelli

FP&A Tags

The International FP&A Board members gathered in Zurich for the 16^th time since the chapter launch. On November 7, the discussion focused on mastering Predictive Planning and Forecasting (PPF), a modern approach to organisational planning that allows us to enhance corporate agility.

Figure 1: Zurich FP&A Board №16, November 2024

Larysa Melnychuk, CEO of FP&A Trends Group and Founder of the International FP&A Board, chaired the meeting sponsored by Wolters Kluwer/CCH Tagetik in partnership with Page Executive. 28 senior finance practitioners from top-tier global and local companies such as Takeda Pharmaceuticals, Sonova, Lonza, Novartis, Swissport, Ecolab, Holcim, Mondeléz International, Straumann Group, attended this event and gathered in a cosy Page Executive’s office.

In this article, we are recollecting the most interesting insights from this meeting.

What Can Predictive Planning and Forecasting Bring Us?

We had a quick discussion about the “buzz” words that come to mind when talking about the potential impact of Predictive Planning and Forecasting (PPF) on organisations.

The list below summarises the most frequent insights cited during the forum:

Agility
Reliability
Volatility
Transformation
Overwhelming
Faith
Future
Insights
Efficiency
Acceptance
Automation
Hype
Actionable

The Zurich FP&A Board members also emphasised the importance of accurate data, dynamic driver-based models, and advanced analytics. Larysa Melnychuk highlighted how the transition from traditional methods to predictive approaches happens. FP&A teams are now prioritising efficiency, collaboration, and adaptability. The figure below summarises the essence of Predictive Planning and Forecasting.

Figure 2

Boosting Organisational Agility with Predictive Planning and Forecasting

In addition, we discussed how agility can be measured. The audience provided their input on the duration of Scenario Planning within their organisations. The votes were nearly equally split between two options – scenarios can take less than a week to run, and more than a week is needed. Overall, it echoed the stats from the 2024 FP&A Trends Survey, as only 22% of the respondents can run scenarios, while 78% are struggling to do so. Attendees agreed that several crucial factors may help us improve our agility:

Understanding the data
Data governance and sources are key
Data and models need to be connected
Establish key drivers to run an automated process

Figure 3

The Difference between Traditional and Predictive Planning

The forum also touched upon the distinction between Predictive Planning and Forecasting and the traditional approach to planning. The slide below highlights the limitations of traditional approaches, such as fragmented data, rigid models, and slow, Excel-driven processes. In contrast, PPF leverages real-time, integrated data, Predictive Analytics, and AI/ML technologies, enabling harmonised, dynamic, and collaborative decision-making for greater efficiency and agility.

Figure 4

Leverage 5 FP&A Team Roles and the FP&A Trends PPF Maturity Model for Success

Larysa Melnychuk underscored the importance of the five FP&A team roles (as shown in Figure 5) for PPF. These roles should be combined to orchestrate a symphony of effective Predictive Planning, but it’s important to highlight the diversity of competencies needed to achieve the best-in-class FP&A.

Figure 5

Finally, the first part of the discussion brought to the audience’s attention the unique tool for reaching the leading state of Predictive Planning and Forecasting. The FP&A Trends PPF Maturity Model is a framework covering six dimensions and five stages to allow you to tailor a roadmap for your transformation journey towards PPF.

Figure 6

Group Work Insights

The attendees were asked to share their ideas about transitioning to PPF in small groups. Each group had to discuss a specific aspect and present their insights to the rest.