What is predictive planning and how can it enable effective forecasting?
Predictive planning is based on proven time series machine learning algorithms that can better predict cash flow, expenses, headcount needs, sales trends, and supply and demand. The planning process is a combination of actuals, budget, and forecast inputs. With predictive planning in place, planners don’t need to look at external sources and use complex offline Excel sheet formulas: they can leverage the power of machine learning and predictive analytics to make better decisions using more accurate forecasts. Using a data-driven approach where all required data is in one place, easy to access, to generate, and to compare simulations, is key to enabling effective forecasting.
Predictive planning enables planners and business analysts to go beyond the common planning cycle, where traditionally the forecast is uploaded from an external data source – such as a spreadsheet or an external system, which is connected to the planning process. In that sense, predictive planning is embedded within the planning model and process, consolidating planning, reporting and analytics in one place to achieve the best predictions while using planned data.
From that perspective, running multiple predictive simulations can help to quickly evaluate potential impacts of different lockdown policies, which could potentially better inform critical decision-making for businesses.