Business Forecasting’s Roles by Larry Lapide, Ph.D.

Topics: Forecasting, Future, Planning Pages: 12 (2154 words) Published: April 18, 2013
Business Forecasting’s roles
By larry lapide, Ph.D.

(This is an ongoing column in
The Journal, which is intended to
give a brief view on a potential
topic of interest to practitioners of
business forecasting. Suggestions
on topics that you would like to see
covered should be sent via email to
llapide@mit.edu)

O

ne of the trends I noticed during
my 30-plus years in the business
world has been an evolution
towards greater professionalism in the
business forecasting function. What used
to be a job someone took on for a short
period of time is now viewed as a longterm career path. I recently heralded this fact in a column I wrote for Supply Chain
Management Review magazine (January/
February 2010) titled, “The Forecaster’s
New Role,” in which I discussed all the
ways in which business forecasters should
support supply chain managers. That
column was written for those managers.
This column is an adapted version of it
that is geared towards elaborating all the
ways business forecasters might support
all managers in their companies.

Business Forecasting
BacKgrounD
I have been affiliated with the Institute of
Business Forecasting & Planning (IBF)—
recently appended with “& Planning” to
reflect its focus on the Sales and Operations
Planning (S&OP) process—for over
12 years. I sit on its advisory board and
have participated in its events, write this
JBF column, and conduct introductory
tutorials. Some time back, I took note that
they started a professional certification
program for business forecasters and

14

began conducting the annual Executive
Forecasting & Planning Forum events for
forecasting and planning management.
During the last Forum (Oct. 2009 in
Orlando), I realized that the IBF has
helped to elevate business forecasting
into a profession, one in which one
could have a career. The event had midcareer forecasting and planning managers enthusiastically discussing their roles,
especially those being played during these
tough economic times when demand

larry laPiDe
Dr. lapide is a research affiliate at
Mit and a lecturer at the university
of Massachusetts, Boston campus. He
has extensive experience in industry,
consulting, business research, and
academia, and has a broad range of
forecasting experiences. He was an
industry forecaster for many years,
has led forecasting-related consulting
projects for clients across a variety of
industries, and has researched as well
as taught forecasting. He was also a
market analyst researching forecasting
and supply chain software.

uncertainty has risen dramatically.
Forecasting jobs are readily available as
companies seek to get a good handle on
future demand to survive, and thrive as
the economy rebounds. The demand for
forecasting and planning software products
and consulting services is also robust.
Forecasters often got little respect in
the past. To start off my “Designing a
Business Forecasting Process” tutorials, I
show a cartoon with the caption: “Darn it,
Fenster, I don’t care if you ARE dyslexic.
Stop referring to the demand planner as
‘That Damned Planner.’” I use it to point
out that forecasting is really a no-win
job. If forecasts are too low, others are
happy that they “beat the numbers”; if too
high, others are not happy because “the
forecasters were too optimistic.” Lastly,
if by some remote chance the forecast is
perfect, others will happily say they “made
their (not the forecaster’s) numbers.”
Why take a job in which you are
virtually never right? My advice is not
to make forecast accuracy your primary
mission because business environments
are fraught with too much ever-changing
demand uncertainty and forecast errors.
Instead, the mission is to consistently
produce the best forecasts possible based
only on facts and clearly articulated
assumptions; professionally with no
emotion. Over time, this gives forecasters
the credibility needed to convince others...
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