As market conditions evolve, business planning methods need to adapt as well. This is where rolling forecasts enabled by #IntegratedBusinessPlanning (#IBP) software are critical.
What Are Rolling Forecasts?
A rolling forecast is a planning methodology where the planning horizon moves over time. For example, a 12-month rolling forecast would plan for the next 12 months on a rolling basis. As each month passes, the forecast adds an additional month to the planning period. Similarly, an 18-month rolling forecast could plan for the next 6 quarters, adding a quarter each time. This allows managers to seamlessly update their plans instead of relying on a static, annual budget.
Benefits of Rolling Forecasts
Rolling forecasts powered by IBP offer numerous advantages including:
#Agility - Plans can adjust as new information comes to light regarding market situations, new opportunities, challenges etc. This enables dynamic decision making.
#ContinuousPlanning - Planning becomes an ongoing process rather than a static, annual exercise. Assumptions can be frequently validated and assessed.
#EarlyWarningSigns - Emerging risks and opportunities are identified sooner due to regular forecast updates. Preventive or corrective measures can be undertaken proactively.
#BetterResourceOptimization - Understanding updated market demand patterns allows for superior allocation of resources to high-value activities.
#EnhancedCollaboration - Cross-functional teams can collaborate smoothly to incorporate the latest demand and supply information into rolling forecast updates.
Leveraging IBP Capabilities
The real-time data consolidation, scenario modeling, and advanced analytics offered by integrated business planning suites make them essential platforms for rolling forecasts.
Some key capabilities include:
#FinancialModeling - Built-in financial intelligence allows easy modeling of P&Ls, balance sheets, cash flows.
#DriverBasedModeling - Causal drivers can be mapped to financial outputs for dynamic forecasting.
#SCMPlanning - Production, inventory and sales plans can be collaboratively developed taking into account multiple operational parameters.
#Workforce Planning - Labor requirements can be continually planned based on updated revenue scenarios.
Today, rolling forecasts enabled by IBP are an invaluable business planning technique offering enhanced agility, continuous intelligence, and superior resource allocation.
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