By Kristen Gramigna
Forecasting generally becomes a key focus following a significant business event that’s either remarkably positive or highly negative. Though nothing is predictable with certainty, forecasting is a tool that can work to remove such “hindsight is 20/20” regret, and improve the likelihood that decisions are informed, and based on past performance and the intellectual predictions of the professionals managing an initiative.
Despite what you may think, working forecasts into your workflow isn’t reserved for larger businesses with dedicated analytical teams, nor does it require an overhaul of current processes or a significant financial investment. Here are a few tips on how to work forecasting into your workflow.
Be Open-Minded to Forecasting Possibilities
Typical workflows include negotiations, compromise and conversations, to ensure problem resolution as early as possible and to manage risk; forecasting is a natural compliment to the workflow. But when organizations don’t consistently forecast, it’s likely seen as a time-consuming and laborious process that internal resources simply can’t support, or, is mistakenly viewed as an exercise reserved for projects that include historical quantitative data. Companies that attempt to forecast to no avail may also find themselves trapped in a spiral of inefficiency.
In a white paper called “Managing Risk and Uncertainty” (PDF) by FSN and Oracle, it’s estimated that as many as 93 percent of managers gather or analyze information in spreadsheets — and 54 percent of them spend more or the same time gathering information than analyzing it.
To incorporate forecasting into workflow, leadership must first state its intent: Forecasting isn’t a number-crunching exercise — but an exercise in understanding all possible outcomes, before determining the right or wrong approach. In fact, there are many ways to arrive at such conclusions, and they don’t have to involve large data sets or predictive models (though with consistency, such forecasting sophistication may be revealed). Give team and project leaders the freedom to choose the forecasting method appropriate to the situation, given time constraints, available data and budgets.
Choose the Right Method for the Scenario
When teams are empowered to apply the forecasting methodology that is appropriate to the project at hand, consistency and more accurate results are likely to follow. A few common forecasting methods include scenario writing, which considers different sets of starting criteria (such as price, cost and potential value of a marketing offer, and the size of an audience) and the various impacts that can be manipulated to predict “good, better, best” style outcomes.
Time-series outcomes, on the other hand, use longitudinal quantitative data to identify trends and cyclical variances, and may use baseline metrics collected from similar projects or campaigns as a point of comparison. The subjective approach is helpful in group brainstorming sessions to identify potential issues and opportunities when an idea is so new that very little data exists, and/or time is of the essence. Set the expectation in your company’s culture that quantitative and qualitative forecasting methods are both welcome — provided the forecaster can support the assumptions at hand with transparency — and act on them appropriately to change course when needed.
Find the Balance of Automation and Human Power
Working forecasts into your workflows shouldn’t institute unnecessary processes, but should rather complement the work that’s already being done. Optimize your processes to maximize outcomes. Invest in the tools that can automate “low value” information like data filtering, pulling and sorting to allow your employees to do what the human mind does best: Problem solve, consider new sources of information and identify outliers.
To envision an optimized approach to forecasting, consider the functionality of an ideal GPS-style app: the address information a user enters accurately predicts routes, travel times are based on mapping data, it notifies a user when her favorite coffee shop or the cheapest gas station is nearby. By leveraging the technology resources that expedite the forecasting information that can be automated and allowing room for human thought, forecasts can be built and fine-tuned over time to ensure they are intellectually multifaceted to, ideally, improve efficiency and effectiveness.
Forecasting can be a valuable business tool that sets expectations around project and campaign outcomes and makes business decisions better informed. Working forecasting into workflows starts by setting the appropriate expectation in your company about the real underlying goals forecasting is meant to achieve: efficiency and effectiveness in decision-making. With a little consistency and common sense, every organization can incorporate forecasting to become a standard practice