Where are the Real Opportunities for Forecast Improvement?
The key opportunities for enhancing forecast accuracy and reliability with statistical forecasting applications lies more in a mastery of the forecasting system versus using domain expertise to the machine produced forecasting end result. In fact, most companies have no idea how much their planners are increasing or degrading the forecast using the system.
While a lot of companies have invested in expensive forecasting systems there is a huge gap between the available functionality and what is used. As an example, few planners ever change the models beyond the expert pick functionality provided by the system or use other attributes to improve the model fitment.
This is different in a specialized forecasting firm with trained manpower who would master the system functionalities and techniques to improve the model fitment and hence the forecast accuracy.
How outsourced team can help the scenario
Apart from bringing in the system and subject matter expertise as mentioned above that helps in improving the statistical accuracy, there are other benefits that the outsourced team brings in.
Firstly the team remains dedicated to the job in hand unlike an in house one, which may be distracted by number of other internal issues. This further provides outsourced team an opportunity to dive deeper into the numbers for analysis like demand sensing and real reasons behind the forecast errors. As a result the function is able to bring about better and more insightful forecast reports that helps in continuous process improvement.
Wondering how would a collaborative planning process work with outsourced team
Of course the collaboration of numbers with various internal functions and especially sales team would usually not be outsourced. It must be remembered that the idea of outsourcing does not indicate that internal planning function is completely dismantled.
Outsourcing team helps you to add expertise and capacity to your planning function rather than replace it. With high quality numbers at your disposal, the in house professional has much productive collaboration and discussion with the other functions and also gains superior confidence within the organization. The extra time capacity allows the valuable time to gather business information to pass on to the outsourced team for incorporation in the system.
Outsourced forecasting team when used as an extension of the in house team can work wonders for the planning function. Think of it as a special services team kept out of the day-to-day noise and distractions of the company with a sole objective of process improvement and consequently contributing directly to the bottom line.
The engagement may not work well if it is used completely as clerical activity outsourced or expected to bear the complete burden of planning process. It will tango when the expertise is divided well between the two teams and bring in the desired results.
Have more questions or concerns on the outsourced forecasting or want to know more about how we help organizations as an outsourced team? Write to us on email@example.com with the subject “Outsourced Forecasting”.