The volatility of markets and the entire business environment are major challenges in the context of corporate planning. Trends, short innovation cycles and the general fast pace of the entire society require immediate reactions to changing conditions.
Future planning and decisions based on it must take place at relatively short intervals and include up to date developments. In this way, opportunities and risks can be recognised in good time, wrong decisions can be avoided and costs can be saved. Predictive planning is a planning tool that meets these requirements. The method is based on data from the past. However, it focuses on simulations of future scenarios that can be carried out in short time intervals. The prerequisite for functioning predictive planning is a database that is always up to date. The planning method is suitable for different industries and different types of companies.
How does Predictive Planning work?
Predictive planning is characterised by a focus on the essentials. The principle consists of repeatedly carrying out simulations on the basis of historical information and data. Statistical procedures and pattern recognition form the basis for this method. It is important to identify important influencing variables, dependencies and causal relationships. On this basis, future scenarios can be simulated and the effects of entrepreneurial decisions on future developments become visible. Not only internal company variables, but also information on market developments and other external influences serve as starting data. It is important to run the simulations regularly, whether quarterly, monthly or more often if necessary. It makes sense to place more emphasis on the main influences than on the level of detail. However, the database must always be up-to-date. Simulation and planning are followed by the implementation of measures that have been identified as promising.
What are the effects of predictive planning?
Predictive planning creates more flexibility and transparency. Trends can be recognised in time and the fast-moving nature of the markets causes surprises less frequently, as early indicators for certain market developments can be incorporated into planning. The frequent use of software-supported simulations reveals developments in the business environment early enough to support the right decisions, for example with regard to resource planning, investment decisions or marketing measures. Weaknesses can be identified and eliminated more easily through predictive planning, and potentials are more readily exploitable. Seasonal fluctuations and abnormal deviations caused by other factors are recognised as such. Effects on the processes within the company also become clear at an early stage so that, for example, the organisation can be optimised or budgeting can be adjusted.
Powerful analysis and planning software is the prerequisite for functioning predictive planning. The simulation processes run on the basis of a large, often unstructured amount of data. The challenge is therefore first of all to create a uniform, easily updatable database while avoiding redundancies. Evaluations and simulations are then carried out according to various criteria. Saved results can also be incorporated into future calculations and enable even more precise analyses. Another advantage is that the planning results can be visualised and clearly presented as desired.
We support you in the implementation of predictive planning in your company. This includes setting up a uniform database as well as adapting IT support to individual requirements.
Get in touch with us if you want your company to become more flexible and adaptable on the basis of predictive planning.