Forecasting in an Ever Changing World

Companies are transitioning to the next phase of business development, with one focus on economic growth and the other on how their firm and industry will appear as they arise from and beyond the crisis. Acquiring visibility and control over cash flows and working capital is by far the most basic task organizations must conduct in the financial world, forecasting helps businesses stay "agile" in this continuously changing market. While it's tough to forecast the future, as the COVID-19 pandemic revealed, adequately safeguarding against worst-case scenarios provides a company with the potential to adapt to the ever-changing world. As a matter of fact, it seems that only adaptive organizations will be able to withstand the rapid transition from the industrial to the digital era that we have been witnessing since COVID-19. 

 

Forecasting in an Evolving Landscape

Forecasting traditionally has been a purely manual process involving data compilation and manipulation, often using spreadsheets. With the accessibility of more and more data, traditional forecasting has become an inconvenient, time-consuming process that makes predicting what’s important next to impossible. As a result, humans frequently rely on their intuition and judgment, leading to biased decisions and inaccuracies. Organizations are transitioning to forecasting, which involves people working in tandem with predictive algorithms to handle greater data sets and generate smarter insights and enhanced business outcomes. And yes, cutting-edge technologies like in-memory computing, advanced analytics platforms, and artificial intelligence tools like machine learning have made it all feasible. Recent advances in forecasting algorithms provide an opportunity to move away from ineffective traditional forecasting to state-of-the-art forecasting technologies, allowing businesses to engage in the possibility of increased revenue. 

 

Forecasting Advancements – Why They Are Important?

Due to the advent and integration of artificial intelligence and other emerging technologies, forecasting is becoming less complicated, more dependable, and more effective. However, demand cannot be anticipated at an aggregated level in most cases because distinct product categories may not adhere to seasonal patterns and the same trends, thus requiring individual product categories to be considered and modeled independently for increasing forecast accuracy. Moreover, with time-to-market shrinking and delays producing flawed perceptions of brands, many new items are moving quickly from concept to counter. Forecasting for such new items with no prior experience necessitates the use of derived models that use both qualitative and quantitative information, such as product attributes and demand similarities between existing products. Organizations can now use AI to augment current demand forecasting techniques such as deep learning and differentiable programming. Companies can increasingly collect and exploit business intelligence from a variety of sources, all thanks to AI. This technique will allow them to provide forecasts based on historical data, previous market movements, and even social media attention. The best aspect is that AI-driven demand projections are generated in minutes utilizing real-time data. Also, making use of big data technology will help improve forecast accuracy even further and aid in automation, risk reduction, customization, and data-driven forecasting.

 

RSM Insights

Forecasting provides enterprises visibility into data, allowing them to modify and respond to future projections by allocating resources more efficiently. Adapting with the right set of tools/ technological forecasting advancements can help a business acquire information and understand how operations, budgets, procedures, and other aspects are now operating, along with what needs to be altered and/or improved to achieve future objectives and prospects.

Feel free to consult RSM UAE to discuss your business forecasting concerns. RSM is one of the world’s leading audit, tax, and advisory service networks, recognized for innovative solutions across the globe. RSM professionals can help undertake the granular analysis about the need to adapt to forecasting advancements by your company.