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What are Rolling Forecasts and How to Use Them in Enterprise Planning and Budgeting?

Tanya Heise
Sr Principal Technical Support Engineer

What is rolling forecast? How can you use it in Enterprise Planning and Budgeting?

  • Rolling Forecast is a popular concept to facilitate continual planning vs. distinct planning as in Annual Plans or a regular Forecast.
  • In a Rolling Forecast companies typically plan for 12, 18 months or a rolling 4,8 Quarters.  The Forecast goes beyond the current year.
  • Forecast the entirety of the Current Year plus a portion of the following year.
  • Less focus on the “YearTotal” and more on the Rolling Forecast Range.
  • Many companies want to run both process but eventually would like to move to rolling forecast

What are the key differences between traditional budgeting/planning and rolling forecast?

Traditional Budgeting:

  • Calendar-based (Annual, Quarters etc.)        
  • Fixed targets (Sales/Profit, other KPIs)
  • Resource allocations are rigid
  • Manual account based and often connected to accounting cycles

 

Rolling Forecast:

  • Event based and real-time adjustment to calendar forecasts       
  • Dynamic adjustments to targets based on external/internal events in business
  • Forecasts and re-allocation of resources based on dynamic targets
  • Driver based on assumptions, and connected to business operations

 

Thank you to Muthu Ranganathan, Director, Product Management, for information on this topic.

 

References:

 

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