Reforecasting with SAC Predictive Planning

We all agree with that. Agile tools make re-forecasting time-efficient and effortless.

On the other hand, legacy applications or Excel pivot tables are the sad reality.

Why do finance teams need augmented forecasting?

You need the flexible planning process as never before.
Easy-to-follow forecasting methods are over. We experience too many drastic changes in the economy.

How to adopt agile forecasting and budgeting techniques?

SAP Analytics Cloud provides predictive planning. That combines Smart Predict with input-ready cells. It is for planning, budgeting, forecasting – you name it. Multiple “what-if” scenarios are the most valuable. Let’s take a closer look right now.

It is very handy-dandy tool. SAC combines computer simulation with human intelligence. In other words it is a mix of:

  • automated planning for algorithm-based decisions
  • what-if-scenarios for analyst estimates

You are a few clicks away from agile forecasting. Enjoy data-driven prediction for upcoming quarters.

This article is for business process experts, consultants and CFOs.

What is predictive planning?

Predictive planning helps with decision-making and data-inspiring actions.

This technique replaces your manual data-entry with algorithm-based recommendations around forecasting and planning.

SAC is an end-to-end integration for data wrangling, time-series forecasting and planning. It is a new wave of analytics applications for business controllers.

What are the benefits of predictive planning?

  • Gain more time on decision-making.
  • Bring insights into the unknown future.
  • Keep your organization in line with the financial position.
  • Reduce time on data wrangling.
  • Rely on input from machine learning.
  • Respond faster to changes in the business.
  • Analyze COVID-19 impact on your business with the powerful Smart Predict.

How can I subscribe to SAP Analytics Cloud?

Go to SAC website. Apply for Business Intelligence license. Pay ~20$ per month for access. That’s it! Predictive planning is yours!

Of course, you need 1 Planning Professional license for your developer to maintain the solution. All business users need only BI license to enjoy predictive planning.

Case study: organize a concert in 2021

Germany did a courage step to simulate COVID-19 spread at a pop concert. Event managers at Leipzig Arena had been experimenting with the venue environment. The audience must wear FFP2 protective masks and has contact tracers. In the meantime, scientists analyze the ventilation of the arena and computation fluids dynamics. No surprise, the research recommends reducing the arena capacity.

How can I plan my next concert with SAP Analytics Cloud?

Step 1: Design business requirements. 

Step 2: Run Smart Predict for time-series forecasting.

Step 3: Create a story with what-if scenarios and Smart Predict output.

Step 1: Business requirements.

The finance planners want to calculate ticket price, margin and expense for hosting a gig. In conclusion, they agree to use two metrics:

  • the forecasted capacity of the venue
  • historical data about past events in the arena

Keep in mind social distancing requirements change dynamically. How does it influence the capacity of the arena? 

Consequently, they need other indicators:

  • the distance between people per seat (2 seat gap is 80% of the arena capacity)
  • Staff availability (they might be on sick leave)

Time to pick your tools of the trade: Planning Model + Smart Predict + Story.

Step 2: Smart Predict

I skip how Smart Predict works because SAC documentation explains it explicitly.

Set up time-series forecasting for Actuals to predict the full year 2021. Save Smart Predict output as three versions:

  • COVID_High_Impact – it stores Smart Predict version. Keep what-if scenarios for the most sever COVID-19 restrictions.
  • COVID_Medium_Impact– it is almost the same as above. Keep what-if scenarios for the moderate COVID-19 restrictions.
  • Forecast visitors – here you save Smart Predict version as a baseline. Preferably, don’t modify this one. You will compare the version with other what-if COVID-19 scenarios. 

Step 3: What-if-Analysis

Now, welcome to wonderland for planners. Adjust forecasts with what-if scenarios.

Firstly, create a table quickly with:

  • Date (Jan-Dec 2021)
  • Forecast visitors version
  • COVID High Impact version
  • COVID Medium Impact version
  • Venue Capacity story calculation

Then calculate Venue Capacity by defining thresholds. In this case, I estimate venue capacity by three bins:

  • 90% venue capacity when up to 80% staff is available
  • 80% venue capacity when up to 60% staff is available
  • 50% venue capacity when up to 50% staff is available

Venue Capacity calculation:

IF([@Staff Availibility]>80,[#My Vanue Cap]*90/100, IF( [@Staff Availibility]>=60,[#My Vanue Cap]*80/100 ,[#My Vanue Cap]*50 /100 ) )

Finally, add 2 Input Controls to parametrize what-if scenarios. In this case I focus on:

  • Staff Availability – % of staff available. A static calculation input control (10, 20, 30 …, 90)
  • Possible Venue Cap – % of venue capacity. A static calculation input control. (10, 20, 30 …, 90)

Let’s play what-if scenarios in predictive planning!

click the image to view the demo

 Set up thresholds for all scenarios. 

Modify numeric data points.

Add or subtract the current number with % value.

The colour-coding of thresholds indicate whether the forecast is feasible.

As LabMP data visualization®, I cannot skip data storytelling! Planning with tables is less engaging and more time-consuming for your brain. Are you tired of sitting in front of the tables? Who’s not. So, graphs with narratives are the best remedy.

Your working memory stores up to 6 chunks of information at the same time.

Data visualization is brain hacker.

You decode one trend line of 12 months as a single chunk of the information.

Meanwhile, 12 rows of numbers are 12 pieces to remember.

I hope you are convinced now to the trend line on the left.

Conclusion

You can apply the above logic to a wedding celebration, warehousing, facility management, and any other business scenario.

That’s true. A gig with a facemask on your face is not the same as a good ol’ concert experience. As the saying goes, a bird in the hand is worth two in the bush. 

Anyway, I like the experiment in Leipzig the same as what-if scenarios in predictive planning.

Now it’s your turn: how do you adjust your business scenario to COVID-19 restrictions?

In the end, do you need help with predictive planning? Feel free to schedule a call with me!

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