Predicting the future always sounds a little magical, but we were intrigued to meet a CDO who says he actually makes business forecasts using magic instead of modeling.
While at Talend we work exclusively with healthy data, we’ve always wondered what goes on at organizations that don’t rely on data for business decisions. This time, we’re asking Cosmo about what must be one of the most important business functions at any organization: forecasting.
Just in case any new readers aren’t familiar, can you explain briefly what it means to be Chief Destiny Officer?
I’d be delighted. As Chief Destiny Officer, I do the same job any CDO does.
I provide actionable guidance across departments on all kinds of business matters.
I make sure that all teams across my company have the tools and insights they need to make critical decisions. Really, I handcraft the foundation of a forward-thinking company culture.
And part of your forward-thinking role is supporting business forecasts, is that right?
Absolutely. I’m asked to help with financial forecasting all the time — probably four times a year!
I help with sales and revenue forecasts, general capital forecasting, a little weather forecasting, you name it.
How important is financial forecasting at your organization?
It’s absolutely critical.
Once I interpret the signs and make my forecast, teams across the company decide what to do with that information and get to work like busy bees. My forecasts help all those little people plan hiring, budget for new projects, and time expansion into new markets.
That sounds like a serious responsibility. What is your process when you take on a forecasting project?
It depends on the type of project, obviously.
For example, to forecast business growth, you have to visualize your business as a living being. Then it’s as simple as seeking out your company’s inner child and meditating on what that child will grow up into.
Are there external factors that you take into account?
Absolutely! It’s so important to look beyond your company and its internal workings.
Right. For example, most organizations look at the political environment, demographic trends, national income, and so on because those factors will all have a bearing on their business operations. Is that what you’re talking about?
No, I mean more like the moon phase, and what house Mercury is in. That sort of thing. I once forgot to account for a transit of Venus, and boy did that cause problems.
Most organizations today are moving towards using artificial intelligence (AI) to enhance their forecasting models and reduce errors. Is that something you’ve considered?
Oh, I don’t like anything artificial. Especially artificial sweeteners! They make my aura go haywire.
I’m going to assume you don’t use regression analysis, either.
In that case, do you tend to forecast using a simple straight-line method, or a moving average?
I suppose you could say I use a unique hybrid of those classic forecasting models. Once a stakeholder tells me what they’d like their targets to be, it’s pretty easy.
I visualize a straight line to our goal, and I move the goalposts as necessary to get there.
That sounds like you’re ultimately just tracking performance, not forecasting.
[laughs] Do you really expect me to tell the future?
You’re right, what was I thinking? Thanks again for your time, Cosmo.
Cosmo may think he has it figured out, but we feel bad for anyone who’s counting on him for forecasts. There’s simply no substitute for healthy data.
Financial forecasting is always challenging. How do you find the right data sources to inform your analysis? Can you trust the data to be accurate and up-to-date? Many organizations struggle with data health, meaning that their data that is difficult to discover, understand, or act upon.
While poor data health can make it seem difficult to work with data, there is hope. When you prioritize the preventative measures, effective treatments, and supportive culture necessary for enterprise-wide data health, you can deliver healthy data that informs accurate, timely forecasting for any purpose. Learn more about how Talend makes your data-driven future a reality.