A Complete Guide to Intelligent Forecasting
What is Intelligent Forecasting?
Intelligent Forecasting is a transformational practice for generating both economic baseline forecasts and executive foresight using a combination of data, advanced analytics and economist interpretation. Intelligent Forecasting provides accuracy and agility, enabling economic based decisions for execs and planning professionals, whether in finance, FP&A, S&OP, category management, supply chain, or demand forecasting.
The Intelligent Forecasting process creates AI-sourced predictions and specific economic outlooks for business, whether at total organization, country, division, brand, channel, category or product levels. Repeatable and systematic modeling is central to the prediction process, a proven and accurate method with no room for guesswork, gut feel or bias. The forecasting process and applicability is explained in more detail below.
The Intelligent Forecasting Process
Prevedere’s Bruce Kolodziej and Andy McCartney walk through the 4 step process of Intelligent Forecasting
4 Frequently Asked Questions
Intelligent Forecasting is all about combining macro data, augmented intelligence and predictive analytics for maximum forecasting and planning impact. People often ask these follow-ups about Intelligent Forecasting:
What Does the Process Predict?
Intelligent Forecasting predicts future performance (e.g. US demand by quarter/month, CAGR) up to 3 years ahead, for a specific business metric + scope, based on machine learning analysis of the leading economic indicators of that business.
Is This a Forecasting Replacement?
Intelligent Forecasting is not a forecasting replacement? It is accurate, reliable and highly complementary to traditional forecasting, providing mission-critical economic insight and risk/exception guardrails for future business.
Tactical or Strategic Benefit?
Prevedere’s Intelligent Forecasting solution provides BOTH tactical and strategic outputs: economic baseline forecasts + scenarios for planners, and economic foresight of future operating conditions for executives.
Nice-to-Have or Mission Critical?
If businesses don’t incorporate economic-based Intelligent Forecasts into their strategy and planning, they are flying blind into increasingly volatile markets. Mitigate risk and gain competitive advantage of future market conditions.
Industry Use Cases for Intelligent Forecasting
Food and Beverage Industry. Multiple Forecast Scenarios Injected Data-Driven Insights into the Planning Process.
Historical models of demand for products and categories no longer valid in increasingly volatile economy. Prevedere identified food and beverage geographic leading indicators by product for their business. Built and tested three econometric scenarios by major product categories, then provided forecast to the Insights team each month. Impact: 97.5% forecast accuracy from back-tested models. 70% shorter time to build economic scenarios. Scenarios used by leadership, sales, marketing, and supply chain for planning.
Chemical Manufacturing Industry. Intelligent Forecasting Added Economic Forecasts and Foresight to Enable Agile Planning
Global chemical company realized that historical models of demand for products and categories were no longer valid due to Covid and increasing market volatility. Organization needed more accurate and timely forecasts, based on actual economic drivers of their business. Prevedere identified product and geographic leading indicators for multiple business units, built and tested thousands of models, delivered (95.2%) accurate forecasts and demand foresight for global divisions and executive leadership.
Luxury Automotive Industry. Marketing Use Case Where Client Identified Drivers for Market Share and Increased ROI.
Major luxury auto manufacturer wanted to know unique leading indicators for demand among affluent auto purchasers. Wanted to be smarter and more aggressive in their planning in order to gain market share. Prevedere identified leading indicators for macro, regional and channel factors, and created live monthly rolling forecast models. Impact: Identified drivers of market share unique to their brand versus competitors. Improved marketing ROI by 14%, increasing spending power by $12 million dollars.
New Data - New Forecast Models - New Intelligence
From Leading Industry Analyst Ventana Research
"Organizations that are considering using AI to enhance the accuracy and value of their planning and budgeting efforts should explore and identify the external factors that are most consequential for their performance. Those that do incorporate external measures will have a clearer picture of how and where to address operational shortcomings, and will be able to utilize AI more effectively to support more accurate and valuable predictive and prescriptive business planning." Robert Kugel. SVP & Research Director
Learn More from a Recent Blog Series
Explore more about who in the organization benefits, which industries leverage, and the data science behind Intelligent Forecasting
Intelligent Forecasting is a breakthrough that increases the accuracy, efficiency, and timeliness of planning and forecasting. Its impact is being felt across the enterprise, from the senior executive team to FP&A and the Office of the CFO, to operations. This blog post identifies five roles and organizational functions that derive real benefit.
With market certainty out of the window for the foreseeable future across almost all industries, accurate predictions of the future are no longer a luxury, but an absolute necessity. This blog post introduces 5 industries that Prevedere has delivered forecasting and economic intelligence solutions to over the last 10 years.
Data Science Challenge
It may be possible for internal data science teams to actually develop Intelligent Forecasting solutions manually, but they would face challenges. This blog post explores more of the data science and statistical methods utilized during the process, and the 2 specific challenges to building in-house solutions from scratch.
Intelligent Forecasting Industry Leaders
Large enterprises across these industries are leveraging Intelligent Forecasting to deliver economic intelligence to enable their go-to-market strategies
Quotes from Intelligent Forecasters
"Intelligent Forecasting provides us with the competitive advantage of knowing when to expect downturns or upturns in our categories, allowing us to change course when necessary." CPG Customer
“Our challenge is production - with Intelligent Forecasting, we create a more accurate picture of demand with associated production and inventory needs.” Manufacturing Customer
“Prevedere’s predictive model was exponentially better than our track record of forecasting and re-forecasting. It builds confidence in the business.” Retail Customer
“With Prevedere, we’re able to quickly test our assumptions on what drove performance changes in the past. This allows us to make decisions with greater confidence.” Logistics Customer
Learn more from industry reports and thought leaders
Forrester Intelligent Forecasting Research Study
Prevedere commissioned Forrester Consulting to conduct a Total Economic Impact™ study to examine the return on investment that enterprises can realize by utilizing Intelligent Forecasting. Analysis showed customer benefits of $3 million and an ROI of 345% over three years. The client improved the quality of regular forecasting, resulting in reduced inventory costs, and accurately anticipate international shifts saving millions of dollars.
Institute of Business Forecasting Webinar
This town hall style webinar explores the merits and relevance of predictive analytics and intelligent forecasting in today's and tomorrow's demand planning environments. It includes Prevedere customer Kraft/Heinz, and CEO Rich Wagner. The thought leaders answer questions and examine the pros and cons of intelligent forecasting technology now available, diving into the tools, methods and data to compare them to more traditional forecasting techniques.
Thought Leader Roundtable Webinar
Rich Wagner, Prevedere CEO, sits down with industry thought leaders Doug Laney, Dr. Barry Keating, and Nick Vandesype to discuss advancements in business planning and Intelligent Forecasting. Dr. Barry Keating, faculty at the University of Notre Dame talks about the future of forecasting. Nick Vandesype, predictive and algorithmic business analytics lead at Deloitte, discusses how the office of finance can implement Intelligent Forecasting.