Predictive planning has become the gold standard of planning. Adding a predictive element to planning and forecasting practices offers finance an opportunity to pivot and re-plan faster, produce more accurate forecasts, and understand the impact of more scenarios on the bottom line.
Top-down, bottom-up, side to side, whichever way you plan, predictive planning can simulate the entire up and downstream effects. While implementing a robust predictive planning program might seem like a giant technology project, you don’t have to go from analog to AI overnight.
The FP&A Trends report, Maximizing Potential: Unleashing the Power of Predictive Planning & Forecasting within xP&A, provides finance teams with a helpful guide to advancing predictive abilities via a staged approach.
This article will summarize FP&A Trends’ research and break down:
- FP&A Trends’ predictive planning and forecasting maturity model
- The five stages of predictive planning and forecasting maturity — and how to determine where you stand
- How to advance to the next stage
What is the predictive planning and forecasting (PPF) maturity model?
FP&A Trends developed its predictive planning and forecasting maturity model from a series of interviews with organizations that are actively investing in PPF capabilities. The model outlines the ideal PPF implementation journey based on a staged approach. The stages are:
- Basic: Minimum viability, which is the most elementary phase
- Developing: Managing and recognizing the need to change
- Defined: Mastering the concepts and starting to understand predictive planning
- Advanced: Measurable and utilizing predictive analytic tools
- Leading: Mature, fully balanced integrated PPF across the organization
And, the PPF maturity model is based on three dimensions:
- Model content
- Predictive analytics usage
- Use of technology
Implementing a mature PPF program can't be done overnight, but companies can move towards maturity by following the practical steps detailed in this model.