Business Planning and Forecasting: Is Your Company Keeping Up?
In today’s rapidly changing business world, it can be challenging to plan and forecast quickly enough. To help your company, Jim Webb from CSS shares his insights on the Oracle blog, as well as in this post.
These two functions—financial planning and forecasting—are related, but not the same. Planning, for example, allows you to:
- determine where your company is today
- create goals for where you want to be
- identify what needs to happen to reach these goals
- provide the needed resources
Companies typically create a financial plan, often called their budget, once a year.
Forecasting, meanwhile, involves the creation of benchmarks that support the plan you’ve developed. Traditionally, companies created forecasts once the annual budget was completed.
What worked well in the past, though, may not work as well in today’s ultra-competitive, fast-paced world. Because of that, successful small- to medium-sized businesses (SMBs) can benefit tremendously when both of these functions are modernized and integrated.
Key Element of Success: More Frequent Forecasts
Frequent updating is crucial today because the world won’t wait until your next planning cycle kicks in before evolving. Events that can derail even the best-laid plans include:
- technological advancements
- geopolitical events
- demand fluctuations
- customer preferences
- materials availability
- other fast-changing variables
In short, your company’s planning function must be nimble enough to adjust alongside changing circumstances. When you’re able to do this, performance targets will continue to align with current circumstances. When you can’t, resources can be significantly wasted as your company pursues performance targets that are no longer relevant.
Problems typically occur when an SMB can’t update forecasts often enough, perhaps because they’re using legacy applications and spreadsheets that require slower reforecasting. By the time a forecast is updated—say, two weeks—time has been wasted and opportunities may have been missed. Let’s face it. Circumstances may even have changed again.
With Cloud applications, SMBs can agilely change expectations to dovetail with circumstances, quickly creating quality forecasts.
Key Element of Success: Better Collaboration
Yes, more frequent forecasting can be a real plus. But, this forecasting must use quality planning data—which demonstrates the need for well-connected planning. To make that happen, an integrated planning and forecasting solution is crucial, one that facilitates frequent collaborative engagements.
With an integrated solution, data and workflow exist within one system, which empowers finance teams to support:
- lines of business
When everyone is using the same methodologies, the same tools, people and teams can proceed with confidence. In the Cloud, applications are always updated to the latest, meaning that best practice processes are always right at people’s fingertips.
Less time is spent gathering data, verifying data, and correcting data, and more time can be spent on moving forward on planning, forecasting, and reaching target goals. People can make decisions more quickly, with more confidence.
So, ask yourself, are your planning and forecasting tools and processes keeping up with your needs? Or, is a modernized solution needed? If so, Oracle consultants at CSS can help!
Read the entire series from Jim Webb.