What Are The Forecasting Best Practices Of Transformation Leaders?

Gary Simon -
July 29, 2022 by Gary Simon

Gary Simon is Chief Executive Officer FSN and Leader of the Modern Finance Forum for CFOs on Linkedin.

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Finance leaders are facing the most turbulent trading conditions for more than a generation. The odds of recession are rising, US inflation has hit a 40-year peak, the “Great Resignation” has denied organisations the people they urgently need to go to market, stock markets have slumped, exchange rates are beyond volatile and, although abating, there is still the threat of a fresh round of Covid. Forecasting business performance has never been so challenging. 

Yet, even in these extreme circumstances, there are organisations that forecast much more dependably than their contemporaries.  

FSN’s research identifies that “transformation leaders,” those finance leaders who say they have completely transformed their planning, budgeting and forecasting systems outperform those that have not commenced their transformation journey by a considerable margin. For example, they are three times more likely to be able to reforecast within 24 hours than their contemporaries and 33% more likely to be able to forecast within plus or minus 5% accuracy. They are also three times more likely to be able to forecast out further than 12 months. 

These differences are impressive and especially valued in these difficult times. So, the obvious question is what do transformation leaders do differently? 

As one might expect, technology plays a significant role. Transformation leaders have typically invested in a unified, modern cloud-based planning, budgeting and forecasting software. This capability allows them to more easily manage and share data as a corporate asset, and it is this “data mastery” that sets the foundations of a repeatable and dependable forecasting process. But it is more subtle behaviours and practices that really distinguish transformation leaders from their contemporaries. 

Agility is Top of Mind

Agility has become the watchword of the last few years. The ability to reforecast quickly and accurately is crucial to responding to highly changeable market conditions. Techniques such as rolling forecasts help enormously but are not the whole story. Agility comes through the ability to focus on what matters (i.e. what is going to ‘move the dial’).   

So, transformation leaders focus like a laser on the big things that they can control, like recurring revenues and workforce salaries. Josh Schauer, VP Finance insightsoftware explains, these are the biggest elements of income and expense in a software house and once these are determined it gives a great deal of confidence in the resulting forecast.  Added to which, insightsoftware reforecasts weekly, which gives it deep familiarity with the business drivers, allowing it to respond agilely to change. Forecasting weekly also means that the finance team never has to confront the complexity that builds up over a quarter and is difficult to explain after a three-week delay. Schauer knows week by week how the business is performing. 

Stakeholder Involvement 

It is the business leaders at the sharp end of the business, rather than the finance function that possesses the day-to-day knowledge of the dynamics of the business and how it is trading. According to Schauer it is these stakeholders that should be guiding the finance function through the forecasting process, and he meets with his functional heads weekly, partnering with them to take soundings on business direction and performance. 

Scenario Planning

Outside of the regular reforecasting process, transformation leaders pay considerable attention to scenario planning. This focuses on things that are less predictable but nevertheless can swing the performance needle quite drastically. Rising interest rates, currency fluctuations and the Great Resignation are good examples. Schauer, likes to take these elements separately to start with, predicting the floor and ceiling levels for each of these factors and then seeing what actions can be taken to mitigate the extremes. Then it’s a case of putting the scenarios together to capture the interdependencies that inevitably affect outcomes as a whole.     

Schauer also has an eye to the more distant future, looking at the “next big thing” on the horizon and starting to consider the potential impact on the business. 


Even in more volatile and extreme times, transformation leaders can forecast with a higher degree of confidence than their contemporaries. Having the right technology and specialised planning, budgeting and forecasting solutions is a pre-requisite but it is cultural and organisational elements that often make a difference. Focusing on the things that matter week to week, with the right stakeholders and with an eye to the future, enables an agile and confident response. The proof of the pudding is in the tasting! Schauer says his weekly forecasts are 98% accurate.

Watch our on-demand webinar What Are The Forecasting Best Practices Of Transformation Leaders?” and discover how Josh Schauer, VP of Finance at insightsoftware and one such transformation leader, has introduced forecasting best practices that continue to support his finance function through an ambitious acquisition programme.

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What Are The Forecasting Best Practices Of Transformation Leaders?

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