Business Forecasting Software
How to Use the Correct Software to Overcome Common Forecasting Problems
Business forecasting inaccuracies have over the years led to many business closures in South Africa. The most common mistake made is the use of the wrong forecasting tools. Spreadsheets were never meant to be accurate forecasting tools. Such models are known for errors. Working with the wrong models means missing targets by several degrees.
Another common mistake is to leave the forecasting function to inexperienced personnel who use the wrong methods. Add to the problem the subjectivity of the human mind, and you can understand how business forecasting often fails.
Keep in mind that the manager who wants to see his idea realise will most probably not be 100% objective in his analysis. Then there is also the problem of trying to measure behaviour with perfect accuracy, when such behaviour cannot be measured perfectly. An example is demand. One cannot project demand with complete certainty, which is why it is important to make use of the correct business forecasting tools relevant to the behaviour to be measured.
Using the right software is certainly a good start to reducing errors, and improving accuracy and relevancy of the forecasting function. But, one should still avoid making the same old mistakes, such as the ones discussed below.
Allowing Personal Preferences to Cloud Objective Decision Making
Regardless of how hard we try in one or another way, we are subjective in our choices. To avoid personal preferences from interfering with the forecasting function, it is thus wise to invest in software that allows for the automation of many parts of the budgeting and forecasting function. In this way, it is also possible to save time.
When relying on too much human input, there is always a time problem. And in today’s competitive business environment, it is essential to act in a timely manner, in order to make use of opportunities and to steer the business in the right direction. With forecasts scheduled at specific intervals, it is possible to have the information ready when needed. In addition, data from multiple sources can be integrated to ensure accurate information, and to work with the entire picture when forecasts are made.
Real-time data must be available, and with the correct business forecasting software, it will be possible to use such data, and thus to ensure that the forecasts are based on the latest available data, rather than outdated information. In the business world, information that is a week old may already be outdated.
Making Use of Incorrect Models
Many times, the forecasters rely on models which fit the most recent history, rather than using the most relevant model for a specific behaviour. The model used must work with the behaviour, and this is where the use of solid business forecasting software is imperative. The right software makes it possible to automate repetitive tasks which, if left to human input, would leave room for error and personal preferences. The software makes it possible to forecast in general, in detail or holistically.
Choose software that features:
- Automation functions for time saving, improved accuracy and consistency.
- Fast and easy-to-use interface to minimise the need for special training.
- Easy accessibility from multiple locations and on all levels of the organisation.
- Collaboration capabilities, as management teams must be able to work together using the same information.
- Multiple forecasts must be facilitated without the need for restarting the budgeting process.
- Flexibility to suit organisational needs, thus allowing for rolling and annual forecasting.
Prophix, as available from us, is the answer. It meets all the above requirements and provides you with improved workflow, excellent input tracking abilities, control and monitoring, and approval functionality.
It is possible to integrate actual forecasted data with automation, and perform a forecasting in detail on every level of the organisation. It is flexible to meet your requirements and can be used with numerous ERP systems. You can use data from multiple sources and benefit from real-time updates. The forecasting functionality can also be accessed using internet connectivity.
Don’t rely on outdated tools, when you can have the best and most relevant software to help overcome forecasting problems and ensure that the forecasts can be more accurate. Call on us at KPI Management Solutions for more information and expert assistance on the implementation of Prophix.