The future of forecasting technology
As part of a series on planning, forecasting and budgeting, Tom Herbert speaks to two of the most innovative names in the forecasting space about what’s next for forecasting and planning technology.
It might seem a little ‘meta’ to be forecasting the future of forecasting, but with planning tools developing at breakneck speed, spurred on by developments in cloud technology and data capture and analysis, it’s worth taking a look to see what the next generation might be capable of.
To find out where forecasting and planning tools may be heading, AccountingWEB spoke with Crunchboards founders Amy Harris and Hannah McIntyre, and Adaptive Insights chief executive Tom Bogan.
Amy Harris and Hannah McIntyre - Crunchboards
As more businesses move to cloud accounting platforms the future is now primarily about leveraging technology to do the ‘heavy lifting’ and letting the data work for you.
This increased automation will create ‘super-rich data’, with tools like improved pattern recognition and scenario planning allowing businesses to see where they’re going. Prediction factors will be added in to mitigate risk through tools like push emails to let you know important events, for example, if business continues this way there will be a cashflow problem in six months.
The fact that the information is provided in real time also allows the user to make an instant impact rather than waiting for results to drip in.
Financial directors and accountants will become increasingly valuable to businesses, as they will be able to use these new tools to benefit the business and bring the numbers to life through visualisation.
Video: AccountingWEB speaks with Crunchboards at Xerocon 2015
Tom Bogan – Adaptive Insights
I think in the short term it’s about integrated analytics. Historically businesses had a system for doing their planning and a separate system to analyse their results. Going forward it’s about integrating those two systems, allowing them to do to the final analysis in a clear, concise way in the context of their plans.
Beyond that it really is about having more predictive capabilities in the planning system. If I prepare a plan with multiple scenarios, it would be great to have the ability to determine the percentage confidence associated with those various scenarios.
We also believe it’s important for organisations doing their plans to be able to benchmark either their results or their plans against [anonymised] industry standards. That includes a rich set of benchmarks so they can compare their actual results or plans to what we see across a broad cross-section of businesses in their industry.
We think companies will want suggestions about which key performance indicators (KPIs) are most relevant for their bus or industry, but they’ll also want the ability to add their own custom KPIs. There’s so much data available today it’s important for organisations to understand what the most important is. What are the numbers that drive my business? What’s the number most relevant to my industry? As the tools get smarter they’ll be able to tell us.
What are you looking for from the future of forecasting? If you’re currently using Excel for your planning, what would make you switch?