What is forecasting and why is it so valuable?

With forecasting, you make a prediction for your business based on quantitative and qualitative data from the past. The goal is to run your business more efficiently in the future and to optimize processes. Why is forecasting, and the right approach to it, so valuable, and how do you use it? In this blog, we tell you more about it, so you know how to get started yourself.

What is forecasting?

Forecasting is making predictions for your business in the broadest sense of the word. It can be about staffing needs, spreading budgets and planning expenses, or opportunities and risks that affect your operations in any way. It's always based on data, both quantitative and qualitative. Think of figures about peak months, so you know that extra staff or stock is needed in certain months.

Why is forecasting important?

Anyone who runs a business probably knows the trouble of too little stock, a wrong estimate of the number of staff or a budget shortfall. Forecasting lets you respond to expectations, so your business takes the right steps at the right moments. Forecasting is important to limit or rule out risk factors. Here are some examples:

1. Staff scheduling

With forecasting, you look at peak moments in previous years. When is it busy, and when do employees often request vacation? When do you need extra backup? Forecasting maps this out, so you can create a good schedule in time.

2. Inventory management

According to past data, certain products are especially popular at specific times of the year. For example, seasonal products such as a clothing store's summer or winter collection. You then match your stock to this. Forecasting helps you avoid ordering too little, too much, too early or too late as much as possible. By using data, you take fluctuations in demand into account.

3. Allocating and spreading budgets

In month x, costs always rise, for example because of more staff or purchasing. Or every two years you replace certain machines and computers. These are all things to take into account in your budget. With forecasting, you look at earlier peaks and dips, so you can divide budgets better across departments and moments.

How do you arrive at a good forecast?

With forecasting, it's important that you can use data from previous years. That's why it's important to record key data. We recommend using software and analytics tools. Decide which areas of your business deserve a forecast for optimizing operations, and use the historical data. Based on trends, patterns and seasonal effects, you create a forecast for the long term (a year or more), the medium term (a quarter) and the short term (last adjustments).

Forecasting with the right software

So software is important for creating a good forecast. For staffing with error-free time tracking and clear reports, we recommend the Workforce Management System. It saves time when creating accurate schedules, and also helps you analyze past data. Monitoring is another important part. Are employees often late, do they want to swap shifts, and so on? All interesting to track, so you know why your operations are or aren't running efficiently.

Using forecasting for your business?

Forecasting is interesting for every business, large or small, it doesn't matter! Making predictions and anticipating them leads to a more efficient way of working than just guessing and hoping for the best. It can therefore save you a lot of money, time and stress.

Scheduling and forecasting with Dyflexis!

It all sounds interesting, of course, but creating a good forecast is easier said than done. That's where Dyflexis is happy to help. We offer a complete system for time tracking, leave requests, budgets and more. The Workforce Management System can be connected to calendars, POS systems, and payroll and workload APIs. Based on that, you can also generate automatic forecasts. Want to know more about the Dyflexis Workforce Management System and the benefits it can bring you in terms of time, budget and forecasting? Read more on our website, contact us or request our online demo!