Over the past few years, our team has seen a substantial increase in organizations’ desires to have data at their fingertips to be able to quickly and accurately analyze information and scenarios to make necessary updates to their operations. For this reason, Kelsey Finnegan explores 4 key areas to enhance forecasting and reporting in this Strategic Whiteboard Series video:
- Updating Processes to Include Scenario Modeling
- Utilizing variance analysis
- Implementing rolling forecasting methodologies
- Deploying a consolidated reporting platform
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Hi, my name is Kelsey Finnegan, and I’m a Principal at SC&H Group. Today we’re shooting another video in our whiteboarding series. Our topic today is enhancing business operations with flexible forecasting and real-time reporting. The four topics we’re going to cover today are scenario modeling, utilizing variance analysis, implementing rolling forecasting methodologies, and having a consolidated reporting platform.
Updating Processes to Include Scenario Modeling
The first piece that I’m going to deep dive into is scenario modeling. This has become increasingly important over the past few years as companies need to be able to quickly analyze and run different scenarios that may happen to their business. A lot of organizations have needed to be able to quickly update different scenarios and have what-if analyses if they need to close hundreds of stores, what that’s going to look like to their revenue and costs, or be able to reduce corporate operations spend and also be able to have updated plan targets. So being able to quickly make those updates across the organization is really important to be able to make real-time not only reporting but decision making. All other important components of scenario modeling include being able to do what-if analysis at the analyst level. Whether you’re a project-based operation, manufacturing, or needing to look at things from a store front, having those analysts be able to do modeling in their own worlds and then push things back into the main scenario for consolidated reporting also gives them the ability to be flexible.
Utilizing Variance Analysis
The next piece that’s important is utilizing variance analysis. Having one platform where you are able to look at your actuals down to a low level of detail, being able to compare to plan or budget numbers and ultimately reflect that against your forecast and having multiple versions of each of these is really important. This tells the story about why your business is fluctuating in a certain direction and really adds in that commentary at all levels as to why business units may be hitting revenue targets or missing their revenue targets. It gives the executive leadership a good understanding of why things may not be happening according to plan. So having that platform where you can easily access all of that data in one area is important.
Implementing Rolling Forecasting Methodologies
The next piece is implementing a rolling forecast. Where we have seen this become increasingly important in organizations is being able to have a simple methodology that analysts are able to quickly update and give their updated forecasts and numbers. Having one place where analysts are looking at your actuals at low levels of detail, being able to compare against forecasts and budgets would be the same consolidated platform where CFOs would be able to look at key metrics and KPIs. Again, making sure that everyone is looking at the single source of truth.
Deploying a Consolidated Reporting Platform
The next piece is around having a consolidated reporting platform that’s going to encompass all of the things that we’ve talked about. One version of the truth, as we’ve said has variance analysis, has the what-if and scenario modeling incorporated, as well as those rolling forecasts, are going to help your organization be able to do quick and efficient reporting across all levels of the organization. If this is something that your organization is interested in, please feel free to reach out to me. My contact information is below. Thanks.