Best Practices in implementing a Rolling Forecast

Transcription

1 Best Practices in implementing a Rolling Forecast Lorraine Venter FPM Solutions Sales Specialist BI & PM, IBM 2009 IBM Corporation

2 Session Objectives In today s session we will: Review the need for solid forecasting practices Learn about the rolling forecast philosophy Discuss three best practices for implementing a rolling forecast

3 Expect the Unexpected. David Axson

4 Forecasting a critical business process in turbulent times.

5 What is a forecast? Forward Looking Fact-based Flexible Focused on Risks & Opportunities

6 The end result... is not an accurate picture of tomorrow, but better decisions about the future. Peter Schwartz, The Art of the Long View

7 Good forecasting practices create value Career Reputation Performance

8 The traditional approach... J F M A M J J A S O N D

9 The traditional template

10 Static forecasts do not provide the necessary visibility in turbulent times.

11 It shows...

12 Rolling Forecasts. An effective approach IBM Corporation

13 What is a Rolling forecast J F M A M J J A S O N D J F M A M J Q1 Forecast Traditional forecast Q2 Q3 Rolling forecast Q1 Forecast

14 Why are rolling forecasts attractive? Increased visibility Consistent time horizon Less reliance on budget Solid baseline for new plans

15 Rolling Forecasts speed up the budgeting process Source: The Hackett Group, 2008

16 Not only time is saved. Satisfaction increases. Source: The Hackett Group, 2008

17 Some elements of a successful forecast Time Horizon & Update Frequency Agile Models Process Management

18 Time Horizon & Update Frequency Agile Models Process Management

19 Rolling Forecast = 12 month quartely? No. It depends on your business!

20 Match the time horizon to the rhythm of your business Industry Short cycles Consumer electronics Retailing Investment banking Long cycles Oil exploration Pharma development Infrastructure investment Function Advertising Cash flow Overtime Plant construction Infrastructure investment Research & development

21 Best practice companies move towards more frequent & event-driven updates.

22 Time Horizon & Update Frequency Agile Models Process Management

23 Remember this template?

24 Simplicity is the ultimate sophistication. Leonardo da Vinci

25 Less is more! Simplify your models

26 Utilize drivers the language of business Opportunities Pipeline VS. Number of employees Customer Satisfaction Revenue (New Accts) Office Supplies (Paper) Office Supplies (Pens) Gifts, Misc.

27 Revenue?

28 Time Horizon & Update Frequency Agile Models Process Management

29 Process management is critical Wow...there are a lot of moving parts! We need to make a critical decision quickly!

30 SAP HR DW Update Models Distribute Models Aggregate data What-if & Optimize New version Load Actuals Collect Data Report & Analyze

31 Management Meetings Decision Making!

32 Critical elements of the process Aim for repeatability Measure the quality Set strict goals

33 And measure & monitor your process Forecast Accuracy Cycle Time Confidence Levels

34 Summary: Some elements of a successful forecast Time Horizon & Update Frequency Agile Models Process Management

35 Rolling Forecasts a silver bullet? No one-size-fits-all approach Agile models & process required Technology as enabler Forecast culture required

36 Next Steps Analyze your processes Download our white papers & blueprints Join the Cognos Innovation Center Web:

37 Session Summary The current business environment requires solid forecasting practices that the traditional approaches do not provide Rolling forecasts provide a proven approach for gaining better business insight in today s volatile business climate IBM provides best practices and solutions for implementing a better forecasting approach