Implementing Rolling Forecasts with NetSuite Planning Tools

Implementing Rolling Forecasts with NetSuite Planning Tools

In today’s fast-paced, ever-changing business landscape, financial planning and analysis (FP&A) teams are under increasing pressure to provide timely, accurate, and forward-looking insights to drive effective decision making. Traditional annual budgeting processes, which can take months to complete and are often outdated soon after they’re finalized, are no longer sufficient in a world where market conditions, customer demands, and competitive dynamics can shift rapidly and unpredictably. 

Leading organizations are increasingly turning to rolling forecasts as a more agile, adaptable, and responsive approach to financial planning. By providing a continuous, rolling view of future performance, rolling forecasts enable FP&A teams to quickly identify and respond to emerging risks and opportunities, and to dynamically align resources with strategic priorities.

Understanding Rolling Forecasts

At their core, rolling forecasts are a dynamic, driver-based planning methodology that projects key business metrics over a rolling time horizon, typically ranging from 12 to 18 months into the future. Unlike static annual budgets, which are developed once a year and remain largely unchanged, rolling forecasts are updated on a regular cadence, often quarterly, to incorporate the latest actual results, market intelligence, and management assumptions.

The defining characteristics of rolling forecasts include:

– Continuous planning and forecasting: The time horizon covered by the forecast continuously rolls forward with each update cycle, so the organization always has an up-to-date view of future expectations.

– Driver-based modeling: Projections are built up from a focused set of key business drivers and metrics, such as sales volume, pricing, headcount, productivity, rather than detailed line-item budgets.

– Flexible, adaptive assumptions: Key assumptions and drivers are regularly revisited and adjusted based on the latest internal performance data and external market signals. 

– Forward-looking, action-oriented insights: Rolling forecast outputs are used to inform strategic decisions, set management priorities, and align resource allocations on an ongoing basis.

By adopting a rolling forecast approach, organizations can elevate their FP&A capabilities and position finance as a strategic partner to the business. Some of the key benefits and advantages of rolling forecasts include:

1. Increased agility and responsiveness: Rolling forecasts provide management and FP&A teams with an always up-to-date view of projected financial performance and key leading indicators. This enables organizations to spot and react to changes in the business environment more quickly, and to make proactive, informed decisions to capitalize on emerging opportunities and mitigate potential risks.

2. More effective resource allocation and investment prioritization: With a clearer and more current line of sight into future performance, organizations can dynamically shift human and financial resources to the highest-value initiatives and investments. Rolling forecasts support a more agile and flexible approach to resource allocation that can adapt to evolving market conditions and strategic priorities.

3. Improved forecast accuracy and reliability: By incorporating the latest actual results and revisiting key assumptions on a frequent basis, rolling forecasts tend to be more accurate and reliable than traditional static annual budgets. This helps build greater confidence in the numbers and enhances the credibility and influence of the FP&A function.

4. Streamlined, efficient planning processes: Adopting a quarterly rolling forecast process, rather than a time-consuming and labor-intensive annual budget cycle, can significantly reduce the overall effort and elapsed time required for planning activities. This frees up FP&A teams to focus on higher-value, strategic activities such as scenario modeling, decision support, and performance analysis.

5. Enhanced cross-functional engagement and buy-in: Effective rolling forecasts require active participation, input, and ownership from a wide range of stakeholders across the organization, including business unit leaders, operational managers, sales and marketing teams, and the executive suite. This cross-functional collaboration promotes greater alignment, accountability, and commitment to the forecast.

Overcoming Rolling Forecast Challenges

For many organizations, the concept of rolling forecasts represents a significant change in mindset and approach from traditional annual budgeting. Implementing and sustaining rolling forecasts can come with a number of challenges and obstacles, including:

1. Cultural resistance to change: Shifting from an entrenched annual budget mentality to a more dynamic, rolling forecast culture can be difficult for some organizations, particularly those with long-standing planning processes and performance management approaches. Overcoming inertia and gaining buy-in and adoption from key stakeholders across the organization is critical for success.

2. Process and system redesign: Implementing rolling forecasts often requires significant changes to an organization’s planning processes, calendars, and technology stack. Legacy on-premise systems and manually-intensive spreadsheet-based processes are often ill-suited to the data integration, driver-based modeling, collaborative workflow, and reporting requirements of a rolling forecast approach.

3. Data integration and quality challenges: Effective rolling forecasts depend on timely access to accurate, consistent, and granular data from a wide range of financial and operational source systems. Aggregating, reconciling, and normalizing this data can be complex and time-consuming, particularly in large organizations with disparate systems and processes.

4. Skill and capability gaps: Developing and maintaining rolling forecasts requires a different mix of skills and competencies than traditional budgeting, including expertise in driver-based modeling, scenario planning, variance analysis, data visualization, and business partnering. Building and scaling these capabilities across the FP&A function may require significant training, coaching, and talent acquisition efforts.

5. Stakeholder alignment and engagement: Rolling forecasts require orchestration and active participation from a broad network of stakeholders spanning the organization, from the executive suite to front-line managers and individual contributors. Engaging these diverse stakeholders and aligning them around common processes, goals, and deliverables can be challenging, particularly in large, complex enterprises.

NetSuite: A Powerful Platform for Rolling Forecasts

Despite these implementation challenges, a growing number of organizations are successfully adopting rolling forecasts as a central component of their FP&A strategy and operations. Many are harnessing the power of cloud-based planning platforms like Oracle NetSuite to streamline, automate, and scale their rolling forecast processes.

NetSuite Planning and Budgeting is an enterprise-class, software-as-a-service (SaaS) solution that is purpose-built to support sophisticated, driver-based planning and forecasting. Some of the key features and benefits of the NetSuite platform for rolling forecasts include:

1. Unified data model and seamless integration: At the core of NetSuite Planning and Budgeting is a single, unified data model that integrates financial and operational data from across the enterprise, including the general ledger, sub-ledgers, CRM, HR, and other source systems. This unified model provides a consistent, trusted foundation for rolling forecast processes, with built-in data quality and validation checks.

2. Flexible, multi-dimensional modeling and scenario planning: NetSuite’s powerful modeling engine allows FP&A teams to rapidly build and maintain driver-based forecast models that are aligned with their unique business structures and needs. Models can incorporate a vast range of financial and operational drivers, complex calculations and allocations, multiple scenarios and versions, and rolling time horizons. On-the-fly what-if analysis and scenario modeling allows teams to assess opportunities, risks, and trade-offs.

3. Intelligent process automation and workflow: NetSuite automates many of the manual, time-consuming tasks associated with rolling forecast processes, such as data integration, model consolidation, report distribution, and stakeholder notification and follow-up. Built-in workflow and collaboration capabilities support cross-functional participation and accountability, with threaded conversations, process notifications, and submission tracking.

4. Self-service, mobile-ready reporting and analytics: NetSuite provides rich reporting and analytical capabilities to help FP&A teams monitor and analyze rolling forecast performance, including interactive dashboards, data visualizations, variance analyses, and drill-down and drill-through to underlying details. The platform’s web and mobile interfaces enable 24/7 access to rolling forecast data and insights.

5. Enterprise-class scalability and security: As a cloud-based, multi-tenant SaaS platform, NetSuite Planning and Budgeting provides exceptional scalability, performance, and availability to support the most demanding rolling forecast use cases. The platform is built on a robust and secure architecture, with rigorous data protection, disaster recovery, and compliance capabilities.

Implementing Rolling Forecasts with NetSuite

For organizations looking to adopt rolling forecasts on the NetSuite platform, there are several proven implementation strategies and best practices to consider:

1. Scope and objectives definition: Start by clearly defining the goals, scope, and desired outcomes for your NetSuite rolling forecast implementation. What specific pain points and limitations in your current planning processes are you looking to address? What benefits and advantages do you hope to gain? Which areas of the organization, and which financial and operational processes, will be included in scope?

2. Readiness and capability assessment: Conduct an honest assessment of your organization’s current state readiness and capabilities for adopting rolling forecasts, spanning multiple dimensions such as data availability and integrity, planning process maturity, systems and tools, team skills and bandwidth, and executive sponsorship and support. Use this assessment to identify gaps and risk areas, and to develop targeted mitigation and improvement plans.

3. Iterative, agile implementation approach: Resist the temptation to boil the ocean, and instead embrace an iterative, agile approach to rolling forecast implementation. Start with a focused pilot or proof-of-concept in one area of the business, and leverage quick wins and lessons learned to progressively expand and refine the approach over time. An agile methodology allows for faster time-to-value and continuous process improvement.

4. Collaborative design and development: Effective rolling forecasts require close partnership and collaboration between FP&A teams, IT specialists, and business stakeholders. Assemble a cross-functional design and development team to shape key requirements and design choices, such as forecast segmentation and dimensionality, driver definition and linkage, scenario modeling, process workflow and calendar, and reporting and visualization.

5. Robust integration and data management: Reliable rolling forecasts depend on timely, accurate, and complete data from a wide range of source systems. Invest upfront in robust data integration and management capabilities, including automated data extraction and loading, data quality monitoring and remediation, and master data management. Leverage NetSuite’s built-in integration and data management tools wherever possible to accelerate implementation.

6. Comprehensive user adoption and training: Recognize that effective adoption of rolling forecasts requires significant change management and training efforts across the organization. Develop and execute a comprehensive training and communications plan that engages key stakeholders, builds understanding and buy-in for the new approach, and equips users with the skills and knowledge needed to participate effectively in the process.

7. Continuous process optimization and maturity: Treat your NetSuite rolling forecast implementation as an ongoing journey, not a one-time event. Establish mechanisms for continuous process monitoring, feedback collection, and optimization, such as regular process reviews, user surveys, and performance benchmarking. Use these inputs to identify and drive ongoing process improvements and maturity enhancements.

By following these implementation strategies and leveraging the full capabilities of the NetSuite platform, organizations can successfully adopt rolling forecasts and achieve the many benefits of this approach, including increased agility, more dynamic resource allocation, improved planning accuracy and efficiency, and enhanced business partnership.

Keys to Rolling Forecast Success

Beyond the technical aspects of implementation, there are several overarching keys to success and best practices to keep in mind as you embark on your rolling forecast journey with NetSuite:

– Focus on key drivers and metrics, not details: Resist the temptation to replicate the granularity and detail of your annual budget process in your rolling forecast. Instead, focus on the critical business drivers and metrics that truly drive performance and results. Forecast at a level that aligns with how you manage the business.

– Leverage scenario planning to navigate uncertainty: Use rolling forecasts as a vehicle for active, ongoing scenario planning and contingency analysis. With NetSuite’s powerful modeling and analytics capabilities, you can continuously model a range of potential futures and develop proactive plans to capitalize on upside and mitigate downside.

– Foster cross-functional engagement and accountability: Rolling forecasts are a team sport, requiring active participation, input, and ownership from stakeholders across the organization, including finance, operations, sales, and executive leadership. Build cross-functional engagement into your NetSuite process design, with clearly defined roles, responsibilities, and deliverables.

– Invest in skills and talent development: Recognize that adopting rolling forecasts may require building new skills and capabilities in your FP&A team, such as driver-based modeling, scenario planning, variance analysis, and data visualization. Invest in focused training, coaching, and talent acquisition to ensure you have the right mix of expertise to support your rolling forecast goals.

– Make insights actionable and results-driven: To maximize the impact of rolling forecasts, the resulting insights and analyses need to drive tangible action and improved outcomes. Use NetSuite’s reporting and visualization capabilities to deliver forecast results in intuitive, accessible formats, and partner closely with business leaders to ensure insights are translated into concrete plans and decisions.

– Think holistically about planning and performance: Integrate rolling forecasts with the full suite of planning and performance management processes, including long-range strategic planning, capital allocation, management and statutory reporting, and performance measurement. NetSuite’s integrated platform enables seamless alignment and information flow across these interrelated processes.

Conclusion

Implementing rolling forecasts in NetSuite can be a game-changer for organizations looking to increase agility, improve resource allocation, and drive better business outcomes in the face of continued volatility and uncertainty. By providing an ongoing, forward-looking view of projected performance, rolling forecasts help leaders make more proactive, informed decisions and adapt quickly to changing market realities.

The keys to rolling forecast success in NetSuite include designing a flexible, driver-based model aligned with your unique business needs; leveraging NetSuite’s powerful modeling, scenario planning, and workflow capabilities; fostering cross-functional collaboration and accountability; investing in the right skills and talent; and delivering actionable, results-driven insights.

With the right approach and the robust capabilities of the NetSuite platform, organizations can elevate their FP&A game and position finance as a valued strategic partner to the business. By adopting rolling forecasts, finance teams can enhance their impact and influence while helping their organizations navigate an uncertain future with greater confidence and resilience.