Overview: Rolling Forecasts in Enterprise
Planning and Budgeting Cloud In this overview we’ll show you the highlights
of rolling forecast, a best practice framework that helps you account for, and dynamically
adapt to, market changes and competition. Instead of using a static annual budget that
is quickly obsolete, use a rolling forecast to continuously update your plan and budget
assumptions so you can modify objectives, plans, and resources allocations to quickly
respond to industry, market, and economic changes and trends.
In a rolling forecast, new periods that you define are added to the end of the current
forecast period so you can forecast ahead by 12, 18, or 24, months or 4, 6, or 8 quarters.
This helps you reliably project future results based on actual year to date results and actuals,
the original budget, or revenue and expense forecasts for future periods.
A rolling forecast differs from a traditional annual forecast in the following ways: it’s
event-based, so you can immediately adjust your calendar forecasts accordingly, it isn’t
tied to fixed targets, and supports shifting targets so you can dynamically adjust targets
in response to business events, it supports flexible, not rigid, resource reallocations
to support your shifting targets, and it isn’t tied to accounting cycles, but aligned with
the driver-based assumptions that support your business objectives and operations. Rolling forecast gives you the foresight that
you need to be agile and proactive in a volatile market, and it can be used during your transition,
with your current planning and forecasting process. Based on the rolling forecast an
administrator defines, you can use the rolling forecast tab and the rolling forecast scenario
member to perform the following kinds of planning and analysis: driver or trend-based revenue
and expense, direct entry revenue and expense, driver-based balance sheet, driver-based cash
flow, and revenue and expense project reporting. The driver and trend-based options help you
quickly implement rolling forecast , which can be time consuming, by simply your adjusting
assumptions. In revenue planning you can adjust driver assumptions, like increasing the average
selling price of a Smart Phone to calculate revenue over a forecast range. Similarly,
in expense planning you can modify driver assumptions, like increasing the percent of
marketing events, to calculate expense over a forecast range. You can also plan expenses
by modifying trends over a rolling forecast range. For example, you can use Trend-Based
Expenses to use a different salaries trend, such as changing Year Actual Average to Prior
Year Actual With Seasonality, that you increase by 2% to recalculate rolling forecast expenses. Use direct entry to enter revenue or expense
values over a rolling forecast range instead of calculating them using drivers or trends.
You can also analyze project revenue, expense, and cash flow over a rolling forecast range.
When your administrator updates the current period, time periods are removed or added
to rolling forecast forms and dashboards to reflect the updated rolling forecast range. To use rolling forecast an administrator can
enable it as a feature for your business process, open the Planning and Forecast Preparation
task and use Rolling Forecast to select a weekly, monthly, or quarterly frequency, specify
a number of periods such as 18 months for a monthly frequency, and the number of periods. This updates all rolling forecast forms and
dashboards, and trends and drivers are populated with added time periods. In this overview
we showed you highlights of rolling forecast. To learn more visit cloud.oracle.com.