Predictive Forecasting

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An unbiased view into the future

Although it is nearly impossible to predict the future, forecasting future market development and customer needs is an essential component of corporate strategy and planning. To meet this challenge, strategic planners, financial controllers and Business Intelligence experts seek out the best tools, techniques and solutions to give them a competitive edge in business forecasting.

Predictive forecasting can help guide a company in growing more profitably and respond quickly to changes. The identification and processing of relevant data is key to a view into the future that is as unbiased as possible.

What is Predictive Forecasting?

What is Forecasting?

Long-term strategies and costs can be more effectively planned with a specific tool: the forecast. Forecasts can be used in finance, marketing, human resources and other departments of a company. Forecasts are useful to minimize the risk of making the wrong decisions that end up being costly for the organization.

What is Predictive Forecasting?

The Predictive Forecast is an extension of the classic business forecast. It can be used to find new causal relationships based on new data. These enrich the available data set and provide a better forecast output. The predictive forecast can be continuously improved with every additional connection between data that is uncovered and utilized.

From data pattern to forecast

A forecast can be made with both qualitative and quantitative methods. The qualitative approach is generally based on customer surveys or industry expert opinions.

In the quantitative approach, historical data, real-time analysis or causal relationships, or “data drivers”, serve as the basis for recognizing data patterns and making forecasts. For this purpose, models are created which are based on mathematical and statistical algorithms or with modern methods such as machine learning. Various methods are also used, such as clustering, driver analysis or regression analysis.

Forecasting versus Predictive Forecasting – What is the difference?

Although they sound similar, forecasting and predictive forecasting are two different problem-solving techniques.


Forecasting means prediction and is a technique that predicts the future value of selected data by looking at specific trends. This can be done either by qualitative forecasting, for example using a sales representative’s detailed knowledge of customer accounts, or by establishing quantitative correlations with other influencing variables. Ideally, it should give statements on the attainability of the existing goals and point out the need for action within a company. Thus, forecasting complements other business components such as strategic or operative planning.

Predictive Forecasting

Predictive Forecasting is an extension of classic forecasting. It considers a multitude of inputs, values, trends, cycles and fluctuations of the data in different business areas, in order to make predictions. It is a powerful, comprehensive data-driven approach that can be used to provide better support to the overall corporate planning and corporate performance management process.

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How Predictive Forecasting can drive your business forward

While forecasts are useful for developing internals, predictive forecasting also helps businesses generate unbiased, comprehensive, analytical insights to support improved decision making. Advanced predictive forecasting techniques use forms of artificial intelligence (AI) such as machine learning to predict more detailed, specific results, often with probability. This is usually done by viewing a large amount of historical and real-time data to identify patterns.

For example, predictive forecasting can help predict the company’s revenue for the coming year based on the forecasted development of specific variables such as search queries, competitor prices and extraordinary events. The impact of each driver can be analyzed individually, helping the company better understand market trends. Predictive forecasting is an automated forecasting technique that allows continuous adjustment of forecasts to help the company identify new opportunities and risks early and grow profitably.

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