Are you managing risk in your forecasting and planning?
Implement good risk management for more reliable forecasts
By Bruno Leblanc, EMEA Managing Director Planning, Sigma Conso
It’s becoming increasingly difficult to make good forecasts in an unstable and quickly changing environment.
How do you assess your financial risk, foreign exchange risk, country risks and changes in competition and regulations? This task is even more difficult for a global organisation like yours that works in constantly changing markets.
In addition to these aspects, regulatory pressure has risen and compliance requirements are increasingly complex (new standards, regulations, etc.) making greater transparency and effective management indispensable at every level of your organisation.
In practice, you try to assess, manage and control your exposure to risk in order to minimise its impact at every step. But are you sure that you have the right resources? Are your processes effective? Are you using reliable applications?
Risk, the poor relation of your forecasts
Forecasting is often time-consuming, notably when it comes to collecting information from the people in your organisation and checking its reliability to ensure that group management can use it to take the right decisions. Your operations and management control teams are caught between their daily work, the obligation to provide forecasts on time, the risk of error and ongoing exchanges with subsidiaries and Business Units, and they exhaust themselves trying to take “current” risks, such as foreign exchange risk, into account.
The issue of risk is often raised and eventually minimised due to lack of time, information or simply because your tools don’t allow you to assess it correctly, measure it and make better forecasts by including it as a factor as well.
Current technology enables you to manage risk effectively
To manage risk effectively, it is recommended that you use a dedicated software application specifically designed for planning that takes both financial and operational risk into account.
It will enable you to include changes in market conditions and the regulatory environment in your projections, and to meet your compliance obligations on time, both transparently and reliably.
Using a planning application with risk management functionality provides the following benefits:
- Risks and opportunities are quickly identified letting you implement corrective action early
- You can list financial risks and opportunities, study them and track their evolution
- You can simulate the impact on your balance sheet and income statement based on the ISO 31000 standard (risk management)
- You can create a risk map and stress tests, do crisis simulations using Monte Carlo simulations and create standard reports.
Include risk management in your next Planning application evaluation. It will really make a difference.
There are many planning applications available on the market. How do you choose the best one for your organisation? Make a “risk” approach evaluation part of your study to guide your choice.
With over 4,000 clients in all business sectors (banking, insurance, industry, high technology, airports, energy, etc.), all facing a range of different risks, Sigma Conso Planning is the Planning application that includes the concept of risk as a standard feature.
Using Sigma Conso Planning gives you the benefit of innovations that provide a real competitive edge.
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