Last Updated: June 22, 2018

China’s economic slowdown, gas price volatility, U.S. interest rate hikes … the U.S. economy is in for a bumpy road, with no immediate signs of stabilizing.

In volatile times like these, enterprises shift focus from top line revenue growth to cost reduction initiatives to maintain profit margins, and Prevedere is leading the way in helping companies leverage predictive analytics to do just that.

Here, we examine the top 5 ways companies are using Prevedere to ensure better financial performance in 2016.

1.More accurate enterprise forecasts for investors and shareholders = fewer stock price swings, preserving market capital and leadership

Each month, the headlines bring us another casualty: “{Company} stock price declines with missed forecast, CFO replaced.”

Public companies, on average, miss quarterly forecast by 13%, according to KPMG, which results in billions in lost shareholder value each year. With Prevedere, companies can now look outside their own four walls and leverage true leading macro- and micro-economic, weather and even digital traffic data that affect financial performance.

Real-time, accurate predictors allow companies to make the right call on upcoming revenue and profit. In fact, with Prevedere, customers are achieving up to 50% reduction in forecast errorwith fact-based information on all of the factors that impact results.

2. Better demand forecasting reduces excess inventory, overtime expenses, production bottlenecks and stock outs while optimizing working capital management

All operational and strategic decisions start with expectations of upcoming demand. Staffing, production, distribution, purchasing, pricing … all are dictated by the demand forecast, yet most companies miss this forecast by 15-20% or more. The reason is simple; companies are not using the right information in their forecast process, looking only at past internal data combined with assumptions supported by limited information.

Prevedere’s analytic software identifies the right external and internal drivers of demand. We have helped companies leverage global economic data on volatile markets to improve demand forecasts, resulting in millions of dollars of savings in excess inventory and increased revenue by avoiding stock out situations. In fact, a leading global beverage supplier saw an 11% forecast improvement that led to $27 million savings with Prevedere.

3. Optimal purchasing decisions based on fact-based data lead to better raw material and inventory management

Most purchasing departments rely on long-held beliefs, gut feel and intuition, combined with anecdotal forecasts from industry groups, to predict future costs of raw materials and inventory items. Now, analytics can test these hypotheses and present results in minutes as to what factors truly affect pricing. Prevedere collects millions of variables and helps analysts in procurement build fact-based models that have proven significantly accurate regarding the timing and impact of pricing swings. Ultimately, this foresight gives companies the confidence to make better purchasing decisions. For example, using Prevedere, a global steel fabricator built predictive models for annual aluminum prices that were 28% more accurate than the leading industry group’s forecast. Armed with that information, the CFO and CEO can make better decisions to outperform their top competitors.

4. Faster, more accurate contingency plans anticipate “what if” scenarios to respond to changing economic conditions

Companies are scrambling to understand how much the price of gas impacts profit for their major business units. Do gas prices truly relate to profits? If so, by how much? When will we feel the effects? Hours upon hours of debate and discussion often result in little comfort for decision makers. With Prevedere, companies systematically determine the true impact of external economic conditions on profit in minutes. In addition to a clear understanding of the relationship, our software allows companies to easily create “what if” scenarios and create the necessary contingency plans to protect profits.

5. Eliminate time spent gathering data and reduce data subscription costs 

Prevedere was initially built for a global fortune 500 company to solve the challenging process of hunting and gathering relevant data. In endless searching for external data at the request of the C-suite and business leaders, we knew there was a better way for organizations to collect and consume external data. Global data is becoming more readily available, and Prevedere creates a single repository for global external data at a fraction of the cost of expensive data providers. Millions of macro-economic factors, industry specific data, weather data, online search and social data, demographics and more are all collected, cleaned and consolidated as soon as they are released.

Not only do we collect the data, we provide an easy-to-use application that marries it with your internal data for better and faster insights than ever before. Analysts and decision makers can now spend more time on strategic planning, while saving the hundreds of thousands of wasted dollars spent on data-only search engines. For example, a leading manufacturing company saved more than $400,000 on redundant external data subscriptions.

To learn more about how Prevedere can help you protect profits during this challenging economy, contact us for a free in-depth calculation, or learn about our Financial Forecasting solution.