Effective forecasting is vital for organisations to predict market changes, use resources wisely, and make smart decisions. The Impact of predictive forecasting on corporate control study looks at how businesses can combine data analysis with human knowledge for better predictions and decision-making. Organisations must uncover what influences their forecasts, including market conditions, historical data, and economic indicators, to make better and more strategic decisions. Prioritising effective forecasting can improve your organisation's agility and responsiveness to a fast-changing market.
Forecasting is essential for managers to steer businesses in dynamic environments and to manage relations with external stakeholders.
Bottom-up forecasting has been criticised for being intentionally or unintentionally compromised by manager interests and cognitive biases. Algorithm-based calculations such as predictive analytics are considered a promising alternative to traditional bottom-up forecasting for producing neutral predictions based predominantly on historical data.
A study of two large multinational companies conducted by a team from Monash University explored how predictive analytics-based forecasts were used at a corporate level and how they contribute to managing organisations.