Last Updated: August 30, 2023
Economic Volatility, Tech Market Uncertainty
Overall, economic volatility can lead to real challenges for the tech industry, including reduced demand and investment, shifting consumer behavior, disrupted supply chains, and a range of changes in market dynamics. This impact can vary based on the severity and duration of the uncertainty and the specific subsectors within the tech industry.
What if your organization could add a layer of customized economic-based planning insight for any tech product, service or segment, and be able to ‘market-validate’ short, medium and long term business plans?
What do you mean by ‘market validate’
The vast majority of tech organizations still create business plans based on internal data, typically leveraging historical KPIs such as customer orders or cost of sales as the drivers of forecasts. Amazingly, very few attempt to incorporate external factors into the plans, yet 50+ percent of the business performance is based on those external influences.
The way to market validate plans is to somehow identify and quantify these external factors, and then blend them into operational or strategic plans. The resulting final forecast has a greater probability of matching the actual outcome of the KPI in question, resulting in more effective and successful business execution.
Prevedere’s Advanced Predictive Planning can achieve this
Prevedere’s Advanced Predictive Planning (APP) data, modeling and intelligence enable tech companies to achieve market-validated planning.
This layer of predictive insight is created by firstly correlating a predetermined KPI (e.g. laptop demand) against millions of model-ready macroeconomic, industry, trade and consumer leading indicators from thousands of sources such as Bureau of Economic Analysis, World Bank, Fed reserve, IMF, and Google Trends. The identified indicators are then injected into Prevedere’s econometric modeling platform, which creates, simulates and backtests thousands of models via machine learning algorithms.
The most predictive model generates monthly, quarterly and annual forecasts. These are economic baseline forecasts, which are then blended with internally generate forecasts. The result is a market-validated final forecast that significantly reduces forecast misses, which results in a range of cost efficiencies, go to market opportunities and competitive advantage.
Goal = smarter and higher quality planning across all tech segments
This class of predictive insight/foresight has multiple use cases across tech (and other industries). Here are a few across tech:
Software / Services
With insights from Prevedere’s economic-based planning, software companies can proactively adjust their marketing and sales strategies for both profitability and competitive advantage. Services businesses can allocate their resources, including skilled personnel and infrastructure, according to upcoming predicted economic shifts.
Semiconductor companies are vulnerable to market volatility. Economic-based planning intelligence aids in identifying and mitigating risks associated with economic fluctuations, whilst also being able to focus on growth and expansion initiatives. During downturns, they can concentrate on operational efficiency and maintaining stability.
Hardware / Equipment
Armed with Prevedere’s market-validated demand forecasts, hardware companies can optimize manpower, raw materials, and production capacity. By aligning their strategies with economic trends, hardware and equipment companies can anticipate market shifts, make proactive adjustments, and grow their market share in their industry segments.
For example, a $60b global provider of tech products, solutions and services
… has created 8 AI predictive models for their most prominent lines of business, including laptops and printers. Each of these demand models is based on unique leading indicators and drivers such as consumer confidence, corporate tech spend, semiconductor demand, China exports, GDP and disposable income. The resulting consensus models and forecasts are used for monthly, quarterly and annual planning, enabling market-validated plans and go-to-market strategies. Forecast misses were reduced by 4-8% in the first 12 months.
Thank you very much for your time today.