Before KPMG’s online seminar started, I must admit I was skeptical over the implications of the title “The death of traditional forecasting.” I have attended many similar webinars that allude to the promise of transformation as the deciding factor in putting tried and tested forecasting processes to bed. In reality, many of these promises involved little more than ‘rearranging the furniture;’ there was, in fact, little-to-no actual and effective change.
However, this was KPMG, and I expected more from them. I am delighted to say that I got it! Read on to learn more about my experience of KPMG’s transformational webinar and the key takeaways to take away.
The most critical point to highlight first is that KPMG’s idea of transformation is not just tweaking minor aspects of the forecast process here and there. Instead, it is an encompassing transformation that reinvents the process from start to finish.
Ralph Schatten, Finance Director at KPMG Germany, began by pointing out three key challenges he identifies in traditional forecasting:
Linking each of these challenges and using the metaphor of a seesaw, Ralph aptly notes an imbalance between input and output. He states, “You have a lot of input – time and data – but the insight that comes out of the forecast is not as big as the time you are taking to produce this forecast.” In short, modern forecasting must be faster so that output (insight) outweighs input.
Moving forward, Ralph outlines process transformation and the technology enablement required to succeed. Here, he stressed the need for a robust planning application with world-class reporting and presentation capabilities.
Ralph notes that the input aspect of forecasting is too intense and complex to address the idea of process transformation. A reduction in effort is required for businesses to redefine traditional forecasting to something more modern and effective. Some of the major highlights from this include:
Ralph offered these lessons from his extensive experience, which included the need for the finance function to take ownership of the process and the choice of technology to support it. So far, this blog has explored just the tip of the iceberg for where modern forecasting can go for organizations. Watch the on-demand webinar now for more about Ralph’s insights and how he frames the challenges.
By way of full disclosure, I should note that I spent years in the advisory practice of KPMG and have a lot of respect for the organization. In saying that, I would not risk my reputation to flatter my old employer. The views expressed in this blog are my own, and I back them wholly. I should also add that this new approach is not for everyone and requires strong leadership buy-in to achieve.
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