Have you thought about how to turn financial forecasting into a competitive advantage? In today’s disruptive, high-stakes economy, maximizing any and every competitive advantage can mean the difference between just surviving versus thriving. And if you did turn your standard forecasting activities into a competitive advantage, what would that mean for you and your team in the Office of Finance?
A new report from the Financial Executives Research Foundation (FERF) makes a strong argument for how and why forecasting can become a much more strategic activity for your organization. According to FERF, “More effective forecasting and a deeper understanding of how markets are likely to evolve can provide competitive advantage by improving a company’s agility and its ability to enhance products, target customers more effectively or gain other operational insights.”
Here are some examples of how you can turn forecasting into a competitive advantage:
- Use demand planning to anticipate the likely effects of variables such as marketing campaigns, market conditions in a given region, price discounts and more.
- Generate stronger insights from a greater volume and variety of data to replace gut instinct and ensure more confidence in the numbers and advice coming from the Office of Finance
- Develop insights into how markets are likely to evolve in order to enhance product offerings and target customers more effectively
- Use scenario modeling to explore potential outcomes and identify the activities that have the greatest effect on your business
- Analyze accounts receivable to create profiles that rank customers in the likelihood of them paying invoices promptly
- Apply point-of-sale data to optimize inventory levels to adjust purchases from suppliers
As the report states, “the growing use of analytics to enhance forecasting represents the latest development in the increasing recognition that an organization’s data has evolved from a byproduct of its interactions with customers and stakeholders into a powerful source of organizational value.”