Driver Based Forecasting
Simulate Events | Shift Projections | Predict Outcomes
Build realistic forecasting models that can handle the events-driven, uncertain, and tangled dynamics of business forecasting
— Forecast Evolution
Use predefined curves with various shapes (e.g. Natural Growth S-Curve) and durations to accurately model the evolution of a situation
— Anticipate Disruptions
Identify critical paths, dependencies, and potential risks that may arise from delays or changes.
— Handle Timelines
Estimate a range of possible outcomes based on uncertain dates and durations of different projections.
— Compose Projections
Sync start dates and durations, combine multiple timelines, or weave together a sequence of events.
Forecasting Decision Outcomes
One of the key benefits of using driver-based forecasting is that it allows businesses to better understand the underlying factors that impact their performance. By breaking down things like revenue and expenses into their component drivers, businesses can gain greater insight into what is driving their financial results. This can help them identify areas where they can improve efficiency, reduce costs, or increase revenue.
Driver-based forecasting also helps businesses to be more proactive in their decision-making. Traditional forecasting methods rely heavily on historical data and tend to be reactive in nature. They are based on the assumption that past performance will continue into the future. However, this approach can be problematic in fast-changing markets or when external factors like the economy or regulatory environment are in flux.
In contrast, driver-based forecasting takes into account the dynamic nature of business conditions. By analyzing key drivers like sales volume, pricing, and production costs, businesses can create more accurate and reliable forecasts that reflect the changing market conditions they face. This allows them to be more proactive in adjusting their strategies and resource allocation to meet changing conditions.
Another important benefit of driver-based forecasting is its ability to support scenario planning. By creating forecasts based on different scenarios, businesses can better understand the potential impact of different decisions or changes in the market. This can help them make more informed decisions about investments, resource allocation, and risk management.