The Future of Planning Budgeting and Forecasting Global Survey 2017 was completed by 850 senior finance members from across the globe, making it one of the largest and most authoritative studies of its kind, building on the success of our June 2016 research.
Last year’s “Future of Planning, Budgeting and Forecasting Global Survey” set a benchmark for forecasting performance which we measure in three dimensions, namely; the accuracy of forecasting, the speed of re-forecasting and the future time-horizon over which organizations feel confident in their forecasts. Despite little improvement in the time taken to reforecast, our 2017 survey shows a modest improvement in accuracy and extending the time horizon. Furthermore around 70% of organizations say that their forecasting process is “respected”, “inclusive” and “strategic”. But disappointingly only 40% say they are insightful! In other words, huge effort is expended in the PBF process yet, in the majority of cases (60%), it fails to support management’s decision-making with the insights it needs to improve performance.
So, the obvious question is what makes the forecasting process insightful? Usefully this year’s research shines a light on the characteristics of insightful organizations and reveals what technologies they deploy in support of this goal.
CFOs clearly appreciate the importance of technology in driving better forecasting performance, for example, 80% agree that standardizing and automating the planning budgeting and forecasting process is the top technology priority for their businesses over the next 3 years. The Future of Planning Budgeting and Forecasting Survey also finds that the success of insightful organizations is amplified by the use of ‘cutting edge’ analytical tools, especially those that provide data visualization and charting. But early adopters of more ‘experimental’ methods such as machine learning and Artificial Intelligence (AI) have yet to demonstrate that these technologies have a material impact on forecasting performance. Still, it’s early days and organizations have yet to acquire the skills and experience needed to leverage fully these exciting and potentially transformational technologies.
Of course, forecasting performance is not just about technology. 78% of CFOs recognize that the key to forecasting more accurately lies in greater use of non-financial data as well as the use of rolling forecasts. To this end many CFOs are setting their sights on CRM data as a valuable source of insight.