4 Tips for Collaborative Forecasting
Fight financial uncertainty through collaboration.
With Covid 19 entering the vernacular, finance teams have the unique opportunity to move beyond trend analysis into a more strategic and influential business unit. With a complete organisational picture, finance teams can lead the operational business units to ensure they are confident in forecasts and projections to make effective, decisive business decisions.
But in this environment the command and control leadership style is not always going to yield the best results.
We must combine the ability and knowledge of the whole business with a shared strategic vision.
Deloitte’s recent Future of Work Study found 65% of the C-Level executives surveyed have a strategic objective to transform their organization’s culture with a focus on connectivity, communication, and collaboration.
In my 10 years working in software implementation I have experienced the best and worst in team dynamics. I have been blown away by how fast and agile some teams were before it was buzz word. I have also seen the worst practices, project blow out, product not fit for purpose or the team doesn’t work well enough to even spell efficiency.
The lessons I have learned from the most effective teams. They collaborate. They trust each other and they work together on a shared goal they believe in.
Here are my top 4 tips on how to use collaboration to enhance your forecasting.
Transparency
In these uncertain times sandbagging and infighting over resources can make collaboration difficult. An emphasis on shared goals can enhance the process leading to an honest and transparent communication structure.
Transparency really is key for forecasting, where the numbers have come from and how they have been worked out. Less information means less certainty for your business. Team members can never be certain if the goal posts are changing or if the numbers are realistic.
If sales teams are given sales forecasts with no other information it’s likely they will feel that the forecast is unfair and spend more time trying to understand where the targets came from or arguing their fairness than focusing on sales or adapting their sales strategy.
On the other side it’s important that the sales team is confident in sharing their client and industry knowledge with other areas of the business. If Covid 19 has meant that most companies have postponed their purchase orders until the next quarter they need to ensure internal expectations can be managed.
Capital investments, Hiring and other growth strategies without the correct information can put the company in jeopardy.
Increase Awareness
When it comes to forecasting, finance teams can be operational silos. They have visibility to total company finances and sometimes don’t see value in including other business units to meaningfully contribute to reforecasting efforts.
Break down these operational silos, get more input and on the flip side give more results. Add more people to the forecasting process, work together to ensure all stakeholders are getting actionable insights.
Ensure the forecast process is scalable. It must be able to grow without adding additional complexity or disrupting the forecast. Additional users should increase the outputs and efficiencies of the forecast.
With new users comes new awareness of what is possible, what’s available and open the business to new areas of innovation. When your business is working towards shared goals and having their voices heard not only will the accuracy of the forecast improve but so will the general culture.
Right tool for the job.
With working from home on everyone’s radar now we are familiar with Zoom, Webex, Slack and a host of other tools. You might feel like you have the right tools for the job. These are meeting replacements and can stifle the efficiency gains collaborative forecasting can offer.
Apply tools that really enhance productivity. When it comes to Finance tools, ensure that your chosen technology allows for collaboration on all levels, data tracking, approvals and scenario planning should seamlessly work without constant manual intervention.
Many ERP’s advertise these abilities but often do not have the full functionality required. I really like a tool like Prophix for this. Integrating data sets, sending out collaborative, trackable documents and then managing all this through a simple workflow interface is really powerful.
With the right technology in the right hands a collaborative forecast process should reduce your time to insight.
And finally process.
Process improvement.
Everything is process improvement.
Your forecasting process should have clear measurable objectives. And once the process has been executed the entire forecast should be measured against these success factors. But the story doesn’t end there, constantly look for ways to streamline the process while increasing accuracy.
Constantly look for ways to innovate the process. Static forecasting methodology becomes stale quickly in today’s environment. With shared strategic goals constantly collaborate on what adds value.
Think of forecasting as a living thing. Growing, developing and learning.
Collaborative forecasting can give your business the tools it needs to map its way though these uncertain times. It has to be dynamic and it has to have buy in from the whole company hierarchy. From the CFO to the storeperson knowing what the sales are going to be, why they are changing and adapting to that change is enhanced with a collaborative forecasting process.
