It is a great time for business forecasting and planning and those who do it! We have technology and data analytics tools that could not have been imagined just 30 years ago. We have able to shift from manual, time-consuming data collection and analysis to enabling better business decisions quicker and easier, adding more value to our businesses.
It has been a time of great expansion of data, and of great advancement in forecasting tools to exploit it. We can better understand the purchasing behavior of customers and consumers. And we have better forecasting methods and models to generate demand forecast and revenue projections.
Demand Forecasters and Planners are now business partners in decision making across the entire enterprise – and that should be our goal.
Your Role Is Only Getting More Important
Operational and financial plans can are only as good as the underlying demand forecasts and plans. This places Demand Planners in uniquely important position, and one with great responsibility when it comes to the success of the company. Welcome to the 2020’s where Demand forecasting and demand planning are foundational. Welcome to a time of multi-dimensional business thinking. Having seen planning transition from a traditional approach of reverse engineering from the top line to the bottom-line performance, it’s like shifting from 2-dimensional chess to 3-dimensional chess.
Welcome to the 2020’s where Demand forecasting and demand planning are foundational
Shift Away From Short-Term Forecasting
What can we do to leverage the full range of capabilities available to us? Currently, a limiting factor for many is the continued use of spreadsheets. Spreadsheets are still widely used by Demand Planners in companies of all sizes. Spreadsheets require significant time to import data, maintain it, perform modeling, and export data for use in other software. Integrated software solutions within the company should be standard, freeing up time for Demand Planners to create insights of greater value to the company. Innumerable cost-benefit studies support this. Time is money.
It is important that time be dedicated to identifying and analyzing the drivers of demand
A Demand Planner’s time should shift from away purely performing short-term forecasting, for which Machine Learning (ML), and Artificial Intelligence (AI) can be readily deployed. If technology can assist in short term forecasting, what should we do with this extra time? It is important that time and effort be dedicated to identifying and analyzing the drivers of demand (and the forces that affecting these drivers), both now and in the future. This places the Demand Planner in a position to understand and anticipate bigger picture forces impacting the enterprise, and to inform and assist the strategic discussion and decision-making. That is enormously valuable.
Make Collaboration Your Superpower
Given all functions throughout the company plan and depend on demand forecasts and plans, development of relationships across functions is a major value-added. Become familiar with the terminology used by the functional areas participating in and using information from your demand forecasting and planning processes.
Help them to use the information you provide more effectively for their unique roles. Determine how you may be able to reshape information that you provide in a better format or segmentation structure. Ask them to share information with you from their functional area that may add to the effectiveness of the work in demand forecasting and planning, such as industry publications, research reports, market research, and other inside and outside information that they use.
Ask them about their views on events, situations, competitors, and other developments that impact their area of the business. Ask them how they might expect this to affect the company in the future. Ask them how it might affect their function in the future. Ask them to suggest conferences that they attend that they believe would add to the quality of the work that Demand Planners are doing. Ask and listen to inside and outside authoritative sources of information. Be genuinely interested in others and their functions.
Use Technology to Elevate Your Role to Business Partner
Implement technology solutions that enable better operational forecasts more quickly, while serving the company with insights and longer term forecasts that will drive strategic initiatives. Think of yourself as a trusted advisor for the company, aiming to deliver on enterprise goals and objectives and interested in its business success – and well qualified to guide the business in the right direction. This reframing of your role can enhance your value to the company and contribute to its future success and sustainability. Look constantly for ways to improve your functional area and the company as a whole.
Think of yourself as a trusted advisor for the company
As ML and AI develop in the coming years, they will likely be one of our best enablers and sources of rapid research and information for the work of demand forecasting and planning for future company success. The pace of change is rapid and unlikely to slow down in the future. Acquiring tools and applications that enable us to work more effectively and efficiently is essential. We should not fear technological developments but embrace them as they will be fundamental to our success, both as individuals and companies.
There have been amazing changes for Demand Forecasters and Demand Planners in the past 25-30 years. And more change will come even faster in the next 5-10 years. It will be a great time and opportunity for business forecasting and business planning and for those who do it!