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Forecasting is Critical post 2020

insightsoftware -
September 25, 2021

insightsoftware is a global provider of reporting, analytics, and performance management solutions, empowering organizations to unlock business data and transform the way finance and data teams operate.

Forecasting is Critical post 2020

Socrates once said that “true wisdom comes to each of us when we realize how little we understand about life, ourselves, and the world around us.” While there may be spiritual merit in Socratic self-actualization, modern finance professionals don’t always have the luxury of resigning themselves to not knowing. Finance teams must have insight across all functions of the business, report timely and accurate data, and develop reliable forecasts to guide decision-making throughout the organization. In an era as unprecedented and changeable as this one, a drive to understand life, ourselves, and the performance of the business around us has never been so important.

Modern financial planning and analysis (FP&A) teams can utilize solutions that leverage data into trustworthy projections. It wasn’t always so simple to develop accurate long-term insights—today’s forecasting tools are the culmination of humanity’s long and hard-fought battle against the unknowable future. The ancient Egyptians forecasted their harvests, what we might call their revenue, according to how much the Nile flooded in the wet season. Sailors and shepherds have been either delighted or warned by the redness of the sky for generations. Oracles and astrologers have now made way for macroeconomists, seven-year business cycles, and forecasting technologies—21st century FP&A professionals are expected to aggregate financial and operational data into predictions that will guide their businesses through periods of uncertainty.

Socrates said that “The secret of change is to focus all of your energy not on fighting the old, but on building the new.” That’s the beauty of Socrates. If you scour his adages hard enough, you can always find one that resonates with modern FP&A.

insightsoftware’s Calumo solution is one that will help you see and plan ahead. Rolling forecasts and an ability to create what-if scenarios on the fly means accounting teams can stop fighting the old and direct their energy into building the new.

Forecasting Has Never Mattered More

Radical changes to businesses since 2020 has placed additional reporting, budgeting, and planning burdens on finance teams. When so many resources must be spent on staying solvent in the short term, would it be misguided to prioritize forecasting?

Consider again those sailors, whose decision-making is based on the color of the sky. Navigating when the sea is calm and the stars are bright is simple enough. But being able to plot a course in a raging storm—when the ship is taking on water and the compass is on the fritz—is a critical part of getting through hard times, and steering you ship to where you need to go. Agility is the most important quality businesses can have in volatile seas. Although the pandemic has been economically debilitating, there is an opportunity for adaptable organizations to modernize their processes, leverage their data, and plot a course through the storm.

With implementation tailored to a vast array of business requirements, insightsoftware’s Calumo product is proud of its quick return on investment (ROI) in challenging times. The low barrier to entry and high degree of self-service means both finance and business functions can leverage Calumo to build reports and forecasts specific to them. With Calumo, the whole crew can collaborate to turn the ship around and get back on course, as well as be able to quickly respond to any further changes of the current.

This last point, about agility, is why forecasting is so important. In an ideal world, businesses are driven by forecasts that are built on valid assumptions. In a pandemic, assumptions that are as little as two weeks old could already be inadequate for predicting profit, cashflow, or even solvency, meaning an inefficient reforecasting process could mean a forecast is invalid before it’s even complete. Finance managers and CFOs are having to do bottom-up forecasts based on assumptions they’ve never seen before, and finance teams are working from home, slowing communication, and reducing overall efficiency. The pandemic has proven that processes that rely on “key men” or 30-tab excel spreadsheets to forecast are no longer a viable way to drive long-term strategy. Instead, leveraging Calumo’s solution to aggregate disparate datasets into a single source of truth is the key to developing sustainable, reliable, and timely forecasts.

Streamline Forecasting With the Right Tool

In the current climate, FP&A professionals must turn to solutions that offer continuous forecasting models. insightsoftware’s Calumo product can integrate historic and diverse business data into its modeling, enabling finance teams to have true visibility, transparency, and rapid re-forecasting as assumptions (and reality) evolve.

Leveraging the Calumo product can transform forecasting in the post-2020 world by:

  • Automating reporting, budgeting, and forecasting processes to increase the efficiency of the finance team, so they can focus on analysis.
  • Desinging a solution that enables both finance and business staff to collaborate on forecasting.
  • Connecting multiple reports and updating data in real time, ensuring that everyone is working with the same set of numbers.
  • Deploying, configuring, and supporting a purpose built, cloud-based, finance-centric solution, which the Calumo team has been doing for over ten years.
  • Empowering businesses to take control of rolling and rapid re-forecasting functionality, ensuring they can respond to evolving business conditions with agility.

Applications of Forecasting Tools

Calumo’s cloud-based solution is specifically tailored to each individual client and can transform forecasting across a diverse range of industry verticals. Organizations need a robust, versatile tool to provide accurate, timely reports for their industry- or circumstance-specific financial and operational needs.

For example, the Calumo team has worked with leading property valuer Acumentis for over five years. Following two cyber-attacks during the already challenging pandemic, Acumentis’ CFO recognized the need for rapid reforecasting. Re-establishing client trust and keeping the board informed throughout a difficult period meant the development of a daily forecasting tool, updated in real time, to enable agility as the situation and economy fluctuated. Calumo has also been leveraged to develop a cutting edge 24-month rolling budget/forecast, essentially doing away with the annual budget cycle.

Another application of Calumo is seen in the university sector, where long-term financial and operational forecasting is critical to ensuring future profitability. Universities need accurate multi-year forecasting to make bottom-up and top-down adjustments based on predicted student retention and attrition rates, enrollment trends, casualization of staff, long-term infrastructure projects, and emerging fields of study. Calumo’s cube-based modelling empowers finance teams to slice and dice the data using an array of metrics, to see both granular and high-level forecasts. The University of New South Wales, Macquarie University, and the University of Canberra are all using Calumo to streamline their reporting, budgeting, and forecasting, so they can future-proof their institutions and ensure solvency as many as ten years into the future.

Forecasting Strategies to Steer You Through the Storm

Automate Your Other Processes

If your finance team spends less time “hunting”—that is, chasing numbers in spreadsheets, reconciling reports, or tracking down specific numbers from different departments—and more time “farming” good data processes, they’ll have greater capacity for analysis and forecasting. Automate your reporting, budgeting, and planning through a corporate performance management tool like Calumo to create more opportunity for value-add in other areas.

Try a Cube-Based Solution

Giving your team a multidimensional data cube to play with isn’t as intimidating as it sounds. Cubes are perfect for slicing and dicing your data according to the metrics you want, giving you a high degree of control over your reporting and a more dynamic approach to forecasting and budgeting.

Leverage Excel Formula to Make the Most of Your Data

Excel is an incredibly robust, somewhat limitless tool when integrated with the right technology. Through all-in-one solutions like Calumo, you can easily harness the power of a formula-driven spreadsheet without the technical challenges of making it yourself.

Templated Reports

Modern FP&A professionals shouldn’t be hard coding or keying their data reports. The future of reconciling reports is in templated, formula-based Microsoft Excel spreadsheets that link to a central database, ensuring your team is working with a single source of truth.

Sliding Actual/Forecast Scenarios

In a database or cube-based model, it’s possible to report based on a combination of actuals up to the current reporting month and forecasts thereafter. This slides forward as the months roll on. You won’t have to update a report ever again!

Data Visualization

To get the most out of your analysis and reporting labors, ensure you’re visualizing your data effectively. Telling the story of your analysis is an important part of modern FP&A, you want to be able to accurately demonstrate the current and future performance to specific audiences. Calumo’s inbuilt graphs and dashboards ensure you’re presenting meaningful information within a consistent, elegant design.

Leverage Empowering Technologies

The Calumo product has streamlined forecasting processes for decades. It’s a robust, efficient tool for all finance teams. You can explore intuitive, built-in scenario analysis and predictive insights with confidence, and share the right information with the right people, at the right time. Accelerate planning and decision-making with real-time updates to dashboards, accessible by users on any device.

Moving Forward With Powerful Forecasting

If “The secret of change is to focus all of your energy not on fighting the old, but on building the new,” then FP&A professionals must look to future-proofing their businesses with a reliable forecasting solution. insightsoftware’s FP&A software solutions are a versatile and proven means of empowering finance teams to leverage their data into meaningful long-term insights. Rapid and rolling forecasts are critical in ensuring resilience, encouraging adaptability, and enabling growth, no matter how turbulent economic environments become.

It has never been more important to prioritize forecasting. Organizations must leverage solutions that provide accurate, timely data to decision-makers, and ensure underlying assumptions evolve quickly. Calumo helps finance functions automate their reporting and budgeting processes, so they can invest their energy in “building the new,” and guiding the business through these stormy seas. Want to learn more? Contact us to request a demo from one of our planning and forecasting experts.