who drives quantification of the future?

ECSCIA, European Centre of Supply Chain Information Architecture

Who drives quantification of the future?


“Who” = an organizational function


“Drive” = Set direction and be empowered to enforce it


“Quantification” = Expressing as numbers


“Future” = Yesterday on steroids


Forecast : To define a future state

Plan : Define how to reach a future state


Forecast can be a dictating starting point

Forecast can be an inspiring starting point

Or simply just there, an ever changing reference

Choice of view on the role of forecast sets the framework for planning


There is a lot more room for politics in forecasting than in planning

No one really expects predictions to be right

Forecast errors are forgiven forgotten

Errors in actions based on forecast are not


Old new stuff:

“Digital”


…….Information technology changes forecast methodology

Technology allows for perspectives

Technology allows for teamwork

Technology allows for addressing whole (supply chain) networks

Technology empowers new parts of organization

blah blah blah…….


“New digital” is fast and embraces change.

“New digital” relies on “old brick”” to deliver.

Old brick is limited by lead times and cost of being ready.

Old brick still needs to prepare

Old brick still needs forecast

Old brick still needs planning


Smarter & faster means that organizations change from hierarchical

pyramids to spherical adhocracies

Hierarchic Adhocracy


…..Roles and processes in forecast and planningchanges as organizations change…..

..…Information structures change…..


Goodbye to long planning cycles,

It´s always on


Forecast Plan

In prehistoric days….


Forecast

Plan

Not so long ago….


ForecastplanForecastPlanForecastPlan...

Now….


Converged rather than

Integrated business planning?

IBP “CBP”


Yep folks,

“Converged business planning”


As organizations change from hierarchical pyramids to spherical adhocracies,planning process, tools and information structures follow to support

SalesSupplyDev

FinanceSales

SupplyDev

Finance Sales

SupplyDev

Finance

Hierarchic and sequential ….CBP….Cover the “transition period” with “IBP….”


So…planning is no longer a matter of communication cross organizational borders. It is a matter of functions working

together as if there where no borders.

How about forecasting?


Old hierarchical brick operates separate forecast processes,

creates separate forecasts in separate organizational silos.

At some time forecasts might be merged in some process and tool but that is a ”bolted on” retroactive activity

Old brick loves retroactive ”align with….”


ALIGNFinancial forecast

Sales forecast

Material forecast

Product Portfolio forecast

……..forecast

……….forecast

……….forecast

……..forecast


“Align” forecast in an hierarchical organization means fixing things

downstream, “after the fact”.

That takes too long time, uses too much energyand doesn´t meet up to the pace of new digital.


New digital requires a single, coordinated number. Time is short, there isn´t room for retroactive coordination

between multiple processes. Forecast can no longer be separated and (at best…) aligned in late phases. All stakeholders need to

apply perspectives on the same base forecast in the same cycle


Volume

Financial dimensions

Customer dimensions

Product dimensions

Geography dimensions

Technology dimensions

Channel dimensions


Transition from separated forecast processes producing separate forecast to a converged process applying

multiple perspectives on a single base doesn´t just change technology and process.

It changes the organizational balance and roles.


In hierarchical organizations, traditions puts finance in the driver seat of the forecast process.

In the spherical adhocracy, finance is reduced to a formula.

Hierarchic Adhocracy


strategic

tactical

operative


So, who drives quantification of the future?

It’s a team effort

who drives quantification of the future?

Business