How to Find the Right Demand Forecasting Software
Demand forecasting is a function of demand planning that utilizes historical sales data in order to estimate future demand and sales. Business processes that are influenced by demand planning and demand forecasting include-
- Sales operations
- Financial planning
- Marketing initiatives
- Supply chain planning
- Customer service capabilities
- Inventory management
- New product development
- Inventory levels adjustments
- Supply chain management
- Supply planning
- Capacity planning
- Inventory planning
- Inventory optimization
- Production planning
Forecasting software offers a wide range of benefits to its users ranging from increased forecast accuracy to real-time demand forecast updates. The long term cost savings and increase in productivity are well worth the initial short term investment.
Utilizing a forecasting software can majorly increase the accuracy of both demand forecasting and demand planning processes. Security is optimized when historical data and real time sales data is stored in a secure cloud based location.
Supply chain management benefits from demand forecasting software due to the improved forecast accuracy that software provides. Overall labor costs are significantly lowered and employee time is saved with the utilization of a faster and more reliable forecasting software as opposed to manual demand forecasting.
With so many options available, determining the right demand forecasting software is not an easy task. Before identifying and investing in demand forecasting software consider-
1. Business Needs
Companies should undertake an extensive planning process to map out exactly what their business needs and objectives are before they begin their search for an ideal demand forecast software. The best demand forecasting software for one business may lack the business intelligence capabilities required by another company.
Demand planner and forecaster professionals must critically analyze which key features a software program and planning platform need contain in order for their business to really benefit from its investment.
While most demand forecasting software contains real time updates and cloud based accessibility, not all forecasting software contains the same levels of advanced analytics and machine learning capabilities. Consider any long term objectives such as a new product release or new storefront location opening, and decide which key factors those objectives would require as well.
The compatibility of a demand forecasting software with preexisting management software is also an important consideration. Beyond meeting basic requirements, compatibility and customization are key factors for many businesses when deciding between various demand forecasting software options.
2. Demand Streams
Create a specific document to map demand streams and demand drivers making sure to factor in input and output. A process map is a great tool to physically visualize how demand streams and demand drivers associate.
Keep in mind that internal users of the forecasting software will access the program at different points in the forecasting process. For example, supply chain management and sales operations planning professionals will need to access differing data to best complete their role and responsibilities.
After a process map is finalized, business professionals can then develop planning forecasting techniques. Creating a comprehensive list of requirements that includes information such as demand planning methods and the solutions demand forecasting will ideally produce optimal accuracy levels.
3. Key Features
Businesses should research the key features of each demand planning software and how those key features would benefit their business. For example, a large corporation with locations in multiple countries may need different customer service capacities from their software company, such as customer support representatives who speak different languages.
Perhaps a company has proof of sales systems or other management software programs they want to integrate into their demand forecasting software. Real time updates and compatibility between a variety of management software and tools can make business operations much more effective, productive, and efficient.
Businesses should always consider the future demand of their business including growth and expansion. Management software must be scalable to growing operations or extendable to new locations as they open.
The best forecasting software allow users to replicate and revise demand forecasts easily. Remember, demand forecasting software is meant to benefit and simplify demand forecasting not complicate it further.
- The ability to accurately forecast customer demand patterns assists with a variety of business operations ranging from planning inventory to customer life cycle optimization. Demand management is greatly simplified when business professionals forecast demand reliably.
- Forecasting software improves the accuracy of the demand forecasting and demand planning processes. On the other hand, manual demand forecasting is both time-consuming and prone to errors.
- A forecasting software and planning solution may necessitate more diverse customer support representatives who speak various languages.
- Businesses must make sure to consider business expansions, developments, and growth, including new products and locations when choosing forecasting software.