For many service organizations, the holy grail is the ability to accurately forecast future demands so that they can proactively address any shortcomings and better position themselves to exceed customer expectations. This is no small feat, especially in the ever changing service industry. Some would argue impossible. However, rather than just burying our head in the proverbial “summer sand” (it is beach season in North America after all) and throwing up our arms in defeat, let’s explore what forecasting is really about and whether it is possible for service organizations to achieve this heralded milestone.
Forecasting, whether in service or any other industry, requires a combination of understanding past performance, a notion of what will occur in the future and an understanding of how well you are positioned to meet that future state. For those that read our May 23 blog post or read our Service Performance Framework position paper those criteria should sound somewhat familiar. Forecasting, just like any other business concept, is not achieved through black magic or the employment of a fortune teller, but rather through good old-fashioned hard work. In fact, the very same kind of work that is required to implement a performance management framework. Further, we would argue that accurate business forecasting can only be acheived through the implementation of a performance management framework. The Service Performance Framework that we advocate, requires a) metrics to understand past performance, b) an intimate understanding of your processes and people so that the results being delivered can be explained and c) the ability to know, in advance of making a change to your processes and people, the outcome of that change on your business. These, coupled with a basic understanding of future events (e.g. we will acquire a business, launch a new product) are the ingredients to achieve the holy grail in service — accurate forecasting of future demands. So, the bottom line is that before an organization can even think about forecasting future events, it should have a strong performance management framework in place.
This is for sure not a simple topic and certainly not something that can be adequately addressed in a blog post. That said, we’d like to know what you think. Post your comments or observations and let’s see where this thread takes us.