Business Forecasting
Whatever our business, we daily try to predict what might happen, churning out forecasts on everything from the price of oil to monthly sales revenue for our next rolling budget period.
Unfortunately, forecasts and predictions just seem to have a habit of turning out wrong; for example this 1977 forecast from Ken Olson, my old CEO, “There is no reason anyone would want a computer in their home.”
The good news is that successful business forecasting is possible, but it requires businesses to learn from the industry that handles uncertainty best – gambling and casinos.
Successful Business Forecasting
Successful business forecasting comes from making sensible judgements as to risk, uncertainty and their business consequences. Most importantly, business forecasting success requires a thorough and systematic exploration of the “odds” for and against achieving the desired business outcome.
Though it’s common for business people to view the risk and uncertainty that beset their business forecasts as a threat, they’re probably wrong. Today’s world of macroeconomic uncertainty and disruptive technology has created immense opportunities for organisations that can correctly call the risks inherent in uncertainty.
Our proof? Make yourself a list of the businesses with revenues in excess of €10 billion that did not exist 20 years ago!
Crystal Ball Forecasting
Crystal Ball Forecasting are a specialist consultancy providing, consultancy, training and services to the FP&A (Financial Planning & Analysis), Finance and Treasury community across the EMEA region.
Corridor Budgeting
Our business forecasting approach follows the PWC concept of Corridor Budgeting, an approach which is designed to measure and explicitly include business uncertainty in the business planning and forecasting cycle. Specifically we facilitate the overall evaluation and quantification of a company’s total budgetary risk exposure, or that of its individual business units.
PWC research has shown that companies generally plan and forecast on the basis of one-dimensional values such as “‘Next year, we expect sales growth of 3.5%” with the inherent uncertainty being simply ignored as “too difficult to handle”.
Using our variation of corridor budgeting, we enable companies to answer more interesting questions such as “How likely are we to reach the 12 monthly budget targets, what is the most likely outcome and what factors are driving it?” Read More >>>
Oracle Crystal Ball
The implementation of corridor budgeting requires the use of a robust and easy to use Excel add-in tool capable of performing background Monte Carlo simulations and we, like PWC, recommend Oracle Crystal Ball software.
Oracle Crystal Ball is the Monte Carlo simulation tool of choice for major organisations such as the US Federal Reserve, Bank America, GSK and PWC to power their business forecasting models. It is cheap to acquire and very easy to use, being just a simple Excel spreadsheet add-in.
For large scale enterprise class implementation Oracle Crystal Ball integrates fully with Oracle Hyperion Planning and Oracle Hyperion Strategic Finance as part of Oracle’s comprehensive EPM solution. Read More >>>
Oracle Crystal Ball Consulting
Oracle Crystal Ball is a very robust and well-engineered Monte Carlo simulation tool which integrates directly with Excel but its application to business forecasting, budgeting and other FP&A, Finance and Treasury analysis needs is not always intuitive.
Crystal Ball Forecasting provide cost-effective consultancy services to assist your organisation integrate Oracle Crystal Ball Monte Carlo simulation with your business spreadsheets. We will ensure that you get a real improvement in the effectiveness of your business forecasting and business planning from your investment in Oracle Crystal Ball software. Read More >>>
Oracle Crystal Ball Training
Crystal Ball Forecasting offer a full range of Oracle Crystal Ball training courses designed to equip FP&A, Finance and Treasury teams with the essentials needed to use Oracle Crystal Ball software effectively.
The most popular course for new Oracle Crystal Ball users is the 2 day Oracle Crystal Ball Fundamentals course which has been designed to equip you and your team with the core skills and concepts needed to become productive Monte Carlo simulation practitioners. Read More >>>
We also provide advanced courses and workshops to assist you and your team to become proficient in the use of Oracle Crystal Ball and Monte Carlo simulation to solve specific challenges in the areas of business forecasting, budgeting relevant to FP&A, Finance and Treasury functions. Read More >>>
Oracle Crystal Ball Services
Crystal Ball Forecasting offer a packaged FP&A (Financial Planning & Analysis) stress testing service called Corridor Budgeting Lite for organisations considering taking their first steps into corridor budgeting.
The Corridor Budgeting Lite service is designed to enable you to quickly and cheaply trial corridor budgeting on your existing Excel, Oracle Hyperion Planning or Oracle Hyperion Strategic Finance business plans and forecasts without the need for you to distract scarce specialist staff from their other priorities.
Corridor Budgeting Lite is set up to make it quick and easy for the corridor budget processing to be moved directly in-house, whether to your Excel spreadsheets, your Oracle Hyperion Planning or Oracle Hyperion Strategic Finance implementation.
If you prefer the outsourcing model to minimise the direct resource impact on your team you can continue as a bureau service for as long as you need.
Once set up, the service is completely automated with monthly or quarterly data being directly imported from your existing spreadsheets.
Typically we are able to return the stress test results to you within 72 hours.
Results Visualisation
The results from Corridor Budgeting Lite directly match your spreadsheet lines, but to hold the interest of non-specialist colleagues you will need to present these results in a very clear and direct way. To help make the results directly understandable to non-specialist colleagues we can deliver the results as a multi-dimensional animated bubble plot summary presentation to bring the data to life.
If you are not familiar with the power of multi-dimensional animated graphics watch this 4 minute BBC Four video which turns 120,000 cells of data for 200 countries over 200 years into an easily understood presentation. We can do the same for your business forecasting and budget presentations.