Last Updated: December 14, 2022
Prevedere recently teamed up with Forrester for a panelist discussion on the impact of predictive AI on forecasting and planning. In the webinar, Mike Gualitieri, VP and Principal Analyst at Forrester, Andy McCartney, Director of Product Marketing at Prevedere, and Greg Phillips, TEI Consultant at Forrester, discussed how AI/ML decision-making solutions are going mainstream and the need to rethink traditional business planning. This blog recaps the webinar and highlights the key points from the discussion, including a summary of Forrester’s Total Economic Impact study of Prevedere.
The world is changing faster than ever before and forecasting methods must evolve to keep up
In the past, most companies relied solely on internal historic data to predict and plan for future performance. External forces were simply viewed as a constant as market conditions remained stable. However, that’s not the case anymore, and as economic volatility continues to accelerate, companies that look internally to plan are left with major blindspots. From continued COVID shutdowns to supply chain disruptions to general economic uncertainty, Andy McCartney explains Prevedere’s “goal is to help organizations remove those planning blind spots that can be so costly to businesses”.
By leveraging external data with predictive AI solutions, companies can remove critical blindspots so that they can plan with more confidence and visibility amid heightened uncertainty. The use of AI technologies in business planning has already skyrocketed in recent years and is quickly becoming a standard practice, especially as more enterprise management software incorporates AI abilities. Mike Gualitieri explains that AI “is strategic, it’s a fundamental technology and every enterprise will use it whether they build AI applications themselves, and certainly by software that has AI incorporated into it”. By removing these blind spots and identifying driving forces with predictive AI, business leaders are better positioned to act quickly either to mitigate potential risk or seize growth opportunities.
AI removes bias from the decision-making process, leading to more market-savvy planning teams
While predictive AI solutions can operate on their own, the real power comes from augmenting artificial intelligence with human intelligence. Mike explains, “what makes us very special as compared to computers is that we can actually make decisions based upon limited information…Now the positive side of that we call intuition. The negative side of that though is cognitive bias where we fill in blanks”. Removing this cognitive bias from the decision-making process can be extraordinarily valuable, particularly because predictive AI can uncover external forces that business leaders would have never thought of before.
Augmenting human intuition with predictive AI results in more data-driven decisions made more efficiently. Mike emphasizes that a combined approach “is going to allow companies to scale human intelligence”. From an operational standpoint, Andy highlights that it “makes planning teams more market savvy. They understand what really drives their businesses. It creates a more data-driven culture, less gut feel, less biased and way more data-driven”.
Forrester finds that investing in Prevedere’s solution yields long-term benefits like scalability, flexibility, and improved operational processes in addition to the dollar ROI
To determine Prevedere’s Total Economic Impact, Greg Phillips explains that Forrester “interviewed a US chemical manufacturer, total size about three billion in annual revenue with dozens of US production sites”. While the company in question was able to forecast short-term results from their sales pipeline, Greg explains there was “no true empirical framework to understand the economic drivers of their business and their potential impact”. According to Greg, the insights that Prevedere provided helped them “reduce inventory right off during an economic slowdown. Improved forecast accuracy also helped them avoid the cost of transporting additional raw material as they strove to catch the upside of the cycle”. During a three-year period, the company ultimately saw returns of 345% benefits worth $3 million and a NPV of 2.3 million dollars.
As Forrester highlights in their TEI study, investing in Prevedere’s predictive AI solution proves to be extremely valuable, both in terms of hard dollar ROI and the less tangible benefits. Beyond cutting costs and managing inventory more efficiently, Greg highlights how Prevedere helped create “a harmonious way of analyzing the businesses across each of the units”. For more information on Forrester’s Total Economic Impact Study of Prevedere’s Advanced Predictive Planning Solution, download the full report here.