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Reengineering the Forecasting Process with Predictive Models

Reengineering the Forecasting Process with Predictive Models

Forecasts usually start as historical performance which is then reviewed and adjusted based upon anticipated events. More mature forecasting may also incorporate generally accepted business rules “programmed in” to help “drive” the data into a forecast.

Over the years I’ve deployed uncountable applications which provide the ability to routinely generate “adjustable” forecast scenarios seeded from source system actuals and driven by business rules.

The way these systems work is:

  1. Establish historic performance for the forecast period as a base line (or starting point)
  2. If there is a business rule than can be used to effect or “drive” historical performance into a more accurate forecast, apply it.
  3. If the analyst has specific knowledge that will affect performance in the period, the forecast is adjusted.
  4. Review prior forecast results – the variance between the forecast and the actual performance – and set future objectives.
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Predictive Forecasting

Forecasting applications now utilize predictive modeling to improve this process. These systems use a predictive model generated using accepted statistical disciplines and scored against historical performance.

Predictive Analytics offers the ability to generate very accurate forecasting models that can be automated to continually absorb in real time new performance data as it becomes available as well as “adjust itself” based upon the results of prior periods forecasting accuracy.

Case Studies are beginning to emerge reporting the latest success stories of organizations that have adopted this discipline. Tools in the IBM suite such as Cognos TM1 and SPSS Statistics offer a clear advantage when designing, developing and deploying these types of systems.

Clear Opportunity

This is a clear opportunity to reengineer your exiting forecasting process. The possibilities are endless!

 

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Jim Miller

Mr. Miller is an IBM certified and accomplished Senior Project Leader and Application/System Architect-Developer with over 30 years of extensive applications and system design and development experience. His current role is National FPM Practice Leader. His experience includes BI, Web architecture & design, systems analysis, GUI design and testing, Database modeling and systems analysis, design, and development of Client/Server, Web and Mainframe applications and systems utilizing: Applix TM1 (including TM1 rules, TI, TM1Web and Planning Manager), dynaSight - ArcPlan, ASP, DHTML, XML, IIS, MS Visual Basic and VBA, Visual Studio, PERL, Websuite, MS SQL Server, ORACLE, SYBASE SQL Server, etc. His Responsibilities have included all aspects of Windows and SQL solution development and design including: analysis; GUI (and Web site) design; data modeling; table, screen/form and script development; SQL (and remote stored procedures and triggers) development and testing; test preparation and management and training of programming staff. Other experience includes development of ETL infrastructure such as data transfer automation between mainframe (DB2, Lawson, Great Plains, etc.) systems and client/server SQL server and Web based applications and integration of enterprise applications and data sources. In addition, Mr. Miller has acted as Internet Applications Development Manager responsible for the design, development, QA and delivery of multiple Web Sites including online trading applications, warehouse process control and scheduling systems and administrative and control applications. Mr. Miller also was responsible for the design, development and administration of a Web based financial reporting system for a 450 million dollar organization, reporting directly to the CFO and his executive team. Mr. Miller has also been responsible for managing and directing multiple resources in various management roles including project and team leader, lead developer and applications development director. Specialties Include: Cognos/TM1 Design and Development, Cognos Planning, IBM SPSS and Modeler, OLAP, Visual Basic, SQL Server, Forecasting and Planning; International Application Development, Business Intelligence, Project Development. IBM Certified Developer - Cognos TM1 (perfect score 100% on exam) IBM Certified Business Analyst - Cognos TM1

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