Rolling Forecast
A rolling forecast is a process in which key business drivers are forecast on a continual basis. Its objective is to foresee the risks and opportunities presented by a dynamic business environment revisit strategy in the light of changing business scenarios and align resources/activities for competitive advantage at periodic frequencies. Rolling forecasts are not simply periodic updates against the annual budget and are not associated with a specific financial year.
Rolling forecast enables to anticipate short to midterm outcomes and therefore influence them whereas budgets are developed for specific period on set of assumptions. Rolling forecast provides with a moving window of the future that helps them to make strategic and tactical decisions, manage cash flows, and set shareholder expectations.
Following 12 golden rules make rolling forecast more effective and enables pro-active strategic decisions to influence outcomes:
1. Focus most on top line forecast:第一步必须是销售或收入线的预测。大多数其他变量取决于销售或最高线。准备充分的销售预测应考虑到营销和促销以及新产品发布。它应该考虑市场份额，生产能力和竞争行动。它应该检查客户行为模式和管道。
2. Rolling forecasts periods must be above twelve months:The purpose of forecasts is to provide a more useful framework for decision making. So they should be done regularly and cover a period that enables leaders to effectively steer the business. It is inevitable to cut across rolling forecasts go past the next fiscal year-end, thus providing leaders with more visibility.
3. Make rolling forecast a very easy and simple process:基础预测一些关键驱动因素，而不是大量细节。从数百条细节行中汇编预测是错误的方法。在大多数企业中，很少有数字在整个期间变化很大。因此，专注于销售和成本的关键动力更有意义。鉴于每个预测容易出错，您组合的预测越多，错误将越大，因为一个错误的假设会影响另一个假设。要点是，他们可以看到带有事实数据点支持的整体视图。
4. Choose the right forecasting horizon:预测时间间隔和时间应该再保险flect the needs of the business. For example, with no physical supply chain and inventories to manage, forecasts can be done in few days. Whereas in a capital intensive business, which uses forecasts to make key decisions about production capacity requirements often involving significant capital sums, forecasts can take longer. There is no straight answer to the question of the length of the forecasting horizon. It depends on how long a company takes to make key decisions about operations, capacity, and capital spending. In other words, if the company takes two years to bring new facilities on stream, this might be a reasonable guide. In a fast moving retail business, forecasting should reflect lead times. If the business takes three months to change supply contracts or adjust marketing programs, there is no point in preparing forecasts for less than this period. The horizon also depends on the speed of change. For an airline or ocean transporters, changes are happening at lightning speed, and revising forecasts each rolling forecasts month would be advisable.
5. Unified logic and rules:Create clear methods of standardizing inputs to the rolling forecasting process. If all contributors adhere to the same rules in classifying opportunities, the forecast model is at least based on similar data standards each. Standardizing requires implementing rules for classifying opportunities or costs. Then, define the type of progress required in workflow process. Finally, assign probabilities of closure based on standard rules. Inputs must be based on facts rather than opinions.
6. Consistent and aligned rolling forecasting models：计划工具由Anaplan，Oracle和IBM等公司提供，它们具有预先建立的复杂功能，以使大型组织能够快速准备滚动预测并合并报告。团队可以建立业务规则和结构，然后随着业务的发展而修改模型，很容易适应更改，例如增加的位置，新的或停产的产品线或重组成本中心。这些工具具有强大的建模功能，使团队能够灵活地定义，比较和评估多种业务方案。这样的系统使团队可以在几天内构建模型。他们可以从ERP和总分类帐系统等其他来源导入数据定义。它们还使团队能够构建跨职能模块。
7. Shorter lead times:预测明天将发生的事情要比三到六个月内发生的事情要容易得多。较短的提前时间引入新产品或策略，越多performance measurement accurate and useful the forecasting process will be. Fast response is the real aim. The only reason you forecast is because you cannot react or respond fast enough and if given a choice of improving your speed of reaction or improving your capacity to forecast, you should always choose speed of reaction. Rolling forecast with shorter cycle time enables to predict and adopt quickly.
8. Match rolling forecast model to business requirements:模型是用于形成预测的世界的简化表示。有三种类型的模型。（1）基于“未来将是过去的延续”的假设，统计模型从历史中推断出来产生预测。该模型通常用于预测收入线路，包括消费者支出和产品销售。（2）数学模型试图理解和建模业务各个要素之间的关系以产生预测。当然，许多成本预测随收入而有所不同。（3）判断模型是产生预测的人的负责人。尽管基于判断的预测似乎很简单，但人类能够以非常复杂的方式进行建模。目的是为滚动预测的每个部分使用最合适的模型。
9. Periodic validation and comparison of rolling forecasts:经理应从他们的预测经验中学习。验证的目的不是归因于责备，而是要了解预测准确性是否在提高以及如何进一步改进。预测不准确可以与过程变异性相同。因此，团队需要更好地了解这种变异性的原因，并通过比较多个预测版本和过程改进来减少它们。
10. Sales team must own top line rolling forecast:Purpose of rolling forecast to ascertain probable performance and not targeting setting process. More accurate and realistic rolling forecast is only possible with bottom up forecast from frontline teams.
11. Rolling forecasts must not drive revision of targets or rewards:Most unbiased forecasts are not the ones leaders want to see. If you ask managers to forecast within a budget or target based system, don’t be surprised when their forecasts magically meet the agreed on budget or target. Managers know that their leaders don’t want to be told bad news. Precisely for this reason rolling forecasting must be detached from target setting, measurement, and rewards.
12. Forecasts to be changed only with consensus:While corporate team can challenge the assumptions on which a forecast is based, and therefore its outcomes, it cannot unanimously change the forecast numbers. Otherwise all credibility in the bottom up rolling forecast process will be lost. Revision can still happen with consultation and consensus by validating forecasting drivers.
Advantages of Effective Rolling Forecast:
- Improves strategic and tactical decision making process:准备良好的滚动预测为管理提供了出色的决策框架（例如，制作或购买，标记并进行了加法变化）。
- Enhances performance by identifying future gaps:滚动预测使管理人员能够专注于中期前景，并鼓励管理人员采取与同行/竞争对手或基准测试的差距，而不是他们自己的目标。
- 使管理性能,避免冲击教授it warnings:With limited future visibility, leaders are always vulnerable to the shock profit warning is nightmare for any corporation board. With rolling forecasts that are quickly consolidated throughout the group, leaders can anticipate sharp changes in performance. They should be in a better position to manage expectations and take control of events rather than driven by them.
结论
Many corporations are implementing rolling forecasts in an effort to anticipate change, but most fail to optimize the benefits because the forecasts accuracy is impacted with supervisors influence to see their expected performance in forecast. If senior executives use forecasts to micromanage or demand immediate action, trust and confidence will rapidly vanish. The forecast numbers can be validated and challenged by reviewing data points and drivers if forecasts show a significant change and managers have not explained the change beforehand. Managers should be responsible for dealing with problems and reflecting any corrective actions they have taken in their revised forecasts.
Effective rolling forecasting only works in a culture of transparency and trust. A well implemented rolling forecast performs a number of useful roles. They help senior executives to manage shareholder expectations of value creation; they enable office of CFO to consolidate and manage cash requirements; and they help operational managers to make decisions. Rolling Forecasts enables fast strategic actions to take advantage of market opportunities or counter threats in ever changing global dynamics.
