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Product and Topic Expert
Product and Topic Expert

Predictive Planning was released in SAP Analytics Cloud two years ago. Happy birthday Predictive Planning!

These blog series detail the business value that Predictive Planning can provide. Episode 1 focuses on the most obvious value, providing an “automated baseline” forecast. Predictive Planning can prove crucial to speed up and automate the forecasting activities.

Key findings of the latest FP&A Trends Survey illustrate this well:

  • The top FP&A transformation is to enhance the planning and forecasting system

  • Only 39% of all respondents consider their current forecasts satisfying

  • The satisfaction of the ones using AI/ML to create their forecasts increases to 63%

  • Only 21% of all respondents can produce a forecast in less than 2 days

  • This number increases to 28% for AI/ML users

There is clear untapped potential to improve, speed up and automate forecasting.

So, what is the value of Predictive Planning in this context?

Most planners forecast manually. They are getting limited help from technology to perform these activities. In contrast, a baseline forecast created using predictive planning is data-driven and unbiased. Planners will speed up their day-to-day activities when relying on predictive.

This is not about replacing human-based forecast with machine-based forecast. Planners can adjust the predictive-generated forecasts with insights beyond the available data. Planners can factor in their knowledge of recent business developments for instance.

The pharmaceutical company Roche is an early adopter of Predictive Planning. Roche wanted to streamline its financial R&D (Research & Development) expense forecasting process.

Predictive Planning proved beneficial in many ways:

  • The baseline forecast automates 70% of the data points they need (14,000 out of a total of 20,000 data points).

  • It takes Roche hours to generate a multi-billion-dollar forecasting. Before this was taking their planning organization weeks.

  • Roche could free up their finance team from manual tasks. The team has more time to focus on value-adding activities.

The Roche example exemplifies the dialogue between Predictive Planning and the planners. Predictive Planning detects the unbiased trends in the data accounting for 70% of the forecast. Planners enhance the remaining 30% with their expert insight. Combining Predictive Planning and the planners’ expertise improve accuracy and processing time.

Roche recorded a SAPPHIRE testimony. They explain how they use Predictive Planning in detail.

Predictive Planning can bring forecasting automation to your organization. The next episode explores another part of the dialogue. Planners can do some hypothesis to guide predictive planning and perform scenario modeling.

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