Wouldn’t it be nice to see into the future of your business? With business forecasting, this is a reality; by using current and historical data you are able to have accurate predictions for future trends and forecasts. With this increased visibility you can analyze your business as a whole with the utmost confidence in the data. In this blog, we will discuss what forecasting is, why it is important, how it can help your business succeed and tools that can enhance accuracy and simplicity.
What is business forecasting?
Business forecasting consists of tools and techniques used to predict changes in business, such as sales, expenditures, profits and losses. The goal of business forecasting is to develop better strategies based on these informed predictions; helping to eliminate potential failure or losses before they happen.
Why is forecasting important?
Forecasting is valuable to businesses because it gives the ability to make informed business decisions and develop data-driven strategies. Financial and operational decisions are made based on current market conditions and predictions on how the future looks. Past data is aggregated and analyzed to find patterns, used to predict future trends and changes. Forecasting allows your company to be proactive instead of reactive.
Three ways forecasting can help your organization excel:
1. Helps set goals and plan
Forecasting allows businesses set reasonable and measurable goals based on current and historical data. Having accurate data and statistics to analyze helps businesses to decide what amount of change, growth or improvement will be determined as a success. Having these goals helps to evaluate progress, and adapt business processes where needed to continue on the desired path. There are certain tools such as CRM which will be discussed later in this blog that help to visual forecasting and give insight into things like the sales pipeline, opportunities, and more.
2. Helps budget
Having visibility into potential trends and changes help businesses to know where to allocate their budget and time spent on certain offerings such as products, services, or areas internally such as hiring and adjusting strategy. As Investopedia states: “Budgeting quantifies the expectation of revenues that a business wants to achieve for a future period, whereas financial forecasting estimates the amount of revenue or income that will be achieved in a future period”.
Having insights into current business functionality along with later predicted trends and combining this information into meaningful insights makes for a better allocated and estimated budget.
3. Helps anticipate change within the market
Having insight into not only current data but projections of what could happen in the future helps businesses to make adjustments to business strategy and alter current operations in order to change their outcome.
Forecasting helps position businesses to become active instead of reactive. If there is a trend that is predicted to take over the market, or data is showing changes in consumer behaviour it is important to readjust to the market overall and optimize resources to stand out from the competition.
Many common True CRM Solutions come with an integrated forecasting module, this can be used to create forecasted sales reports; enabling sales teams to fine-tune their selling strategy. Sales Representatives can gain visibility into items such as their quotas at any given moment, while Sales Managers can make more informed business decisions on how their team should manage its resources.
Below is an example of a sales pipeline within Sage CRM. This clickable diagram shows sales and management at a glance what opportunities are in the pipeline, addressing leads vs. qualified leads, what actions have taken place and what actions are scheduled to take place. Having this visual helps to ensure opportunities are not missed or forgotten about.
Below is an example of a dashboard in Sage CRM, reporting on real-time data within the solution. Similar to the pipeline shown above, in this dashboard the pipeline is represented as a funnel, along with weekly trends and actual sales. Depending on roles and duties dashboards can be adjusted to fit a specific individual’s needs.
Learn more about how you can forecast efficiently with
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Commonly referred to as “BI”, Business Intelligence takes raw data in real-time and turns it into valuable and reliable information. This provides businesses the ability to make informed business decisions, faster. These integrated solutions are able to provide you with historical, current, and future data. BI tools use this data to create reports, summaries, dashboards, maps, graphs, and charts, providing detailed insights into business processes.
Today, big data and artificial intelligence have transformed business forecasting methods and they are continually evolving according to business needs and technology. As companies become more data-driven, efforts to share data and collaborate increases. A business intelligence system offers an effective way of acquiring the data that you need for better forecasting; with better forecasting comes a more efficient, productive, and cost-effective business.
Making timely and informed decisions is critical to running a business. However, many organizations struggle to keep up with the growing amount of data being collected. Business intelligence facilitates and improves decision making based on real-time information while reducing complexity and costs related to data analysis and reporting. Below is an example of a dashboard in Sage Enterprise Intelligence, reporting on real-time data within an organization.
Learn more about how Business Intelligence solves forecasting issues
In conclusion, forecasting gives visibility into data, allowing businesses to adjust and adapt to future predictions by optimizing resources. There are various tools that enhance a business’s ability to gain information as well as have an overview of how operations, processes, budget and more are running currently and what should be changed and/or improved in order to reach future goals and opportunities.