Importance of Forecasting in The Business

Importance of forecasting in the business
A forecast can play a major role in driving company success or failure. At the base level, an

accurate forecast keeps prices low by optimizing a business operation - cash flow, production,
staff, and financial management. ... It also helps increase knowledge of the market
for businesses.
Forecasting is valuable to businesses because it gives the ability to make

informed business decisions and develop data-driven strategies. ... 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.
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.
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.
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.
Forecasting tools
Customer Relationship Management
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.
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.
Business Intellegence
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.
Closing
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.
If you would like to learn more about CRM or BI contact BAASS today and we will
have a subject matter expert reach out to you directly.

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Importance of forecasting in the business

A forecast can play a major role in driving company success or failure. At the base level, an

Forecasting is valuable to businesses because it gives the ability to make

What is business forecasting?

Why is forecasting important?

Three ways forecasting can help your organization

Helps anticipate change within the market

Forecasting helps position businesses to become active instead of reactive. If there is a

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