Demand Forecasting Can Support Enterprise Performance Management

DEMAND FORECASTING CAN SUPPORT ENTERPRISE PERFORMANCE MANAGEMENT By Larry Lapide (This is an ongoing column in The Journal, which is intended to give a brief view on a potential topic of interest to practitioners of business forecasting. Suggestions on topics that you would like to see covered should be sent via email to llapide@amrresearch.com. Ed) With the economy in a slump for quite some time, companies are getting very interested in a concept we at AMR Research have termed “Enterprise Performance Management (EPM).” We’ve seen so much interest in it that we’ve got a variety of our analysts focused on what’s happening around it, as well as established a process model for it, as shown in Figure 1. EPM goes beyond performance measurement because measurement is only one aspect of EPM since it is also important to “close the loop” within the management process. This involves identifying potential gaps against performance targets, notifying decision-makers about them, and then executing a process to resolve and close the loop on anticipated performance gaps. FORECASTS VERSUS GOALS AND BUDGETS REVISITED Lately I’ve been thinking about how forecasting can play a role ...