How Is Predictive Analytics Driving Changes In Business Planning?

Predictive analytics is becoming much more prominent for manufacturers and wholesale distributors in business management and planning, an article on TechTarget.com reports. Business planning is going to increasingly rely on real-time analysis and cloud reporting this year.

Thanks to enterprise resource planning (ERP) systems moving to the cloud, data is now far more accessible. By overcoming the obstacles of siloed data and uncommunicative applications, the cloud is helping organizations to reach a heightened level of collaboration. This trend toward collaboration is extremely prevalent in business planning for companies that have an eye on the future.

Once hesitant to explore the cloud, businesses are now adopting cloud applications faster than ever. One reason for the recent spike in cloud adoption is the lower cost of cloud ERP solutions.

“In-memory databases and analytics should begin moving into the price range of a lot more companies, giving them greater flexibility and speed in adapting the models they use to project revenues and other metrics...” says Robert Kugel, senior vice president and research director at Ventana Research.

Suddenly, managers are able to gain insight by generating forecasting and demand planning reports within seconds. Cloud ERP enables more efficient and predictive business planning by storing the entire company’s data within a single database, which is able to be used by several analytical modules and applications. Budgets and rolling forecasts are easily viewed with a click of a button, and this is changing how businesses make management decisions.

The success of cloud ERP is evident in recent reports that show the enormous growth in adoption of these systems.

“…A recent Forrester survey of more than 1,100 purchasers in companies of all sizes showed that 34 percent already use Software as a Service (SaaS) for some aspect of their core financial processes, such as planning and budgeting, an increase of 18 percent over the previous year. In addition, 27 percent plan to make similar moves in the next two years, up six points over the prior year,” the TechTarget.com article reports.

During times of economic hardship, organizations often resist investing in new applications and technology. However, CFOs should avoid that path if they want to see increased revenue and profitability.

“…CFOs should make this the year they get serious about using predictive analytics to increase revenues and profitability in the accelerating economic recovery, rather than making the most of stagnant resources — the most common approach in the recession,” the article recommends.

It’s clear that ERP is moving to the cloud along with predictive business planning. Distributors that implement cloud ERP are going to find that predictive analytics is the logical next step in improving the performance and efficiency of their operations.

Source: TechTarget.com, January 2014