Practical advice for better business forecasting

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SAS® Insights is a section of the sas.com website devoted to being "your top source for analytics news and views." It contains articles, interviews, research reports, and other content from both SAS and non-SAS contributors. In a new article posted this week, we added three short videos containing practical advice for better business forecasting.

Practical Advice for Better Business Forecasting

The three videos introduce articles from the book Business Forecasting: Practical Problems and Solutions:

Business Forecasting book cover

The Disturbing 52% discusses recent research by Steve Morlidge of CatchBull Ltd. In his sample of eight supply chain companies in the UK, he found that over half of their forecasts were less accurate than a naive "no change" model.

Forecasting Performance Benchmarks - Answers or Not? looks at Stephan Kolassa's critique of the validity and usefulness of forecast accuracy surveys and benchmarks. Kolassa concludes that such "external" benchmarking may be futile.

FVA: Get Your Reality Check Here shows how Forecast Value Added analysis can identify forecasting activities that waste resources by failing to improve the forecast. Using FVA, many companies have found steps in their forecasting process that just make the forecast worse!

Foresight Practitioner Conference -- for more practical advice

In conjunction with the International Institute of Forecasters and the Institute for Advanced Analytics at North Carolina State University, the 2016 Foresight Practitioner Conference will be held in Raleigh, NC (October 5-6, 2016) with the theme of:

Worst Practices in Forecasting: Today's Mistakes to Tomorrow's Breakthroughs

This is the first ever conference dedicated entirely to the exposition of bad forecasting practices (and the ways to remedy them). I am co-chairing the event along with Len Tashman, editor-in-chief of Foresight. Our "worst practices" theme reflects an essential principle:

The greatest leap forward for our forecasting functions lies not in squeezing an extra trickle of accuracy from our methods and procedures, but rather in recognizing and eliminating practices that do more harm than good.

As discussed so many times in this blog, we often shoot ourselves in the foot when it comes to forecasting. We spend vast amounts of time and money building elaborate systems and processes, while almost invariably failing to achieve the level of accuracy desired. Organizational politics and personal agendas contaminate what should be an objective, dispassionate, and largely automated process.

At this conference you'll learn what bad practices to look for at your organization, and how to address them. I'll deliver the introductory keynote: Worst Practices in Forecasting, and the rest of the speaker lineup includes:

  • Len Tashman - Foresight Founding Editor and Director of the Center for Business Forecasting: Forecast Accuracy Measurement: Pitfalls to Avoid, Practices to Adopt.
  • Paul Goodwin, coauthor of Decision Analysis for Management Judgment and Professor Emeritus of Management Science, University of Bath: Use and Abuse of Judgmental Overrides to Statistical Forecasts.
  • Chris Gray - coauthor of Sales & Operations Planning - Best Practices: Lessons Learned and principal of Partners for Excellence:  Worst Practices in S&OP and Demand Planning.
  • Steve Morlidge - coauthor of Future Ready: How to Master Business Forecasting and former Finance Director at Unilever: Forecasting Myths - and How They Can Damage Your Health.
  • Wallace DeMent - Demand Planning Manage at Pepsi Bottling, responsible for forecast, financial and data analysis: Avoiding Dangers in Sales Force Input to the Forecasts.
  • Anne Robinson - Executive Director, Supply Chain Strategy and Analytics, Verizon Wireless and 2014 President of the Institute for Operations Research and the Management Sciences (INFORMS): Forecasting and Inventory Optimization: A Perfect Match Except When Done Wrong.
  • Erin Marchant - Lead Data and Systems Management Analyst, Moen: Worst Practices in Forecasting Software Implementation.
  • Fotios Petropoulos - Assistant Professor, Cardiff University: The Bad and The Good in Software Practices for Judgmental Selection of Forecast Models.

Take advantage of the Early Bird registration and save $200 through June 30.

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About Author

Mike Gilliland

Product Marketing Manager

Michael Gilliland is a longtime business forecasting practitioner and formerly a Product Marketing Manager for SAS Forecasting. He is on the Board of Directors of the International Institute of Forecasters, and is Associate Editor of their practitioner journal Foresight: The International Journal of Applied Forecasting. Mike is author of The Business Forecasting Deal (Wiley, 2010) and former editor of the free e-book Forecasting with SAS: Special Collection (SAS Press, 2020). He is principal editor of Business Forecasting: Practical Problems and Solutions (Wiley, 2015) and Business Forecasting: The Emerging Role of Artificial Intelligence and Machine Learning (Wiley, 2021). In 2017 Mike received the Institute of Business Forecasting's Lifetime Achievement Award. In 2021 his paper "FVA: A Reality Check on Forecasting Practices" was inducted into the Foresight Hall of Fame. Mike initiated The Business Forecasting Deal blog in 2009 to help expose the seamy underbelly of forecasting practice, and to provide practical solutions to its most vexing problems.

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