Demand forecasting predicts future customer demand using historical data, market trends, and analytics. Why is this so important? Imagine you’re a CFO preparing next year’s budget. Without demand forecasting, you’re essentially guessing how much inventory you’ll need, how many staff members to hire, or whether a new product launch will hit its revenue targets.
Accurate demand forecasting helps align every department toward shared goals, whether it’s hitting revenue targets or cutting down on wasted resources.
Different situations call for different approaches to forecasting. Here are a few variations that can help you predict demand based on your situation:
Passive demand forecasting uses historical sales data to predict future demand, assuming sales this year will closely mirror last year’s performance. It’s a simple and reliable method for businesses that prioritize stability over growth with consistent sales patterns. Finance leaders can use this type to build forecasts quickly when time or resources for more complex models are limited.
Short-term projections focus on the next three to 12 months to help businesses stay flexible in their planning. This approach is used for managing just-in-time supply chains or adapting to real-time changes in customer demand. Finance leaders with rapidly changing product lines or seasonal peaks can use short-term projections to make quick, data-driven decisions without overcommitting resources.
Active demand forecasting uses market research, marketing plans, and growth strategies to predict future demand. It’s particularly valuable for startups or businesses in growth phases where historical data may be limited and external factors like economic trends or sector growth projections are preferred. Finance leaders can use this model to make strategic decisions about expansion or resource allocation based on a forward-looking view of the market.
External macro forecasting examines broader economic trends and their potential impact on your business goals. This type of forecasting helps finance leaders factor in supply chain challenges, raw material availability, and market shifts to make accurate projections. Understanding external forces allows you to stay proactive and prepared for changes in the market.
Long-term projections look one to four years ahead to help finance leaders shape their company’s growth trajectory. They serve as a roadmap for planning marketing strategies, capital investments, and supply chain operations to prepare for future demand. Aligning long-term forecasts with business goals allows you to position your organization for sustainable growth proactively.
Internal business forecasting evaluates your operations to ensure you can meet both customer demand and growth targets. This model highlights internal limitations—like cash flow, profit margins, or personnel—that might slow down expansion. Finance leaders use it to align internal capacity with projected growth.
Demand forecasting software streamlines the forecasting process so you can plan smarter and avoid surprises. Instead of manually crunching numbers on spreadsheets or making educated guesses, these tools give you clear, reliable insights to guide your decisions.
They can help:
In the next section, we’ll explore some of the best demand forecasting software solutions available. While some tools specialize exclusively in demand forecasting, others, like FP&A platforms, provide financial forecasting and scenario modeling capabilities that enhance and complement demand forecasting efforts. The key is finding the right solution that fits your organization's needs.
Here’s a look at some of the top solutions to help you find the best fit for your needs.
Cube is a spreadsheet-native FP&A platform that streamlines financial forecasting and scenario planning, helping finance teams adjust budgets and resource allocation based on demand fluctuations.
Unlike dedicated demand forecasting tools that focus on inventory and supply chain logistics, Cube enables finance teams to budget for changing demand, model financial scenarios, and integrate demand-driven insights into financial planning. If your priority is understanding revenue trends, aligning costs with demand, and preparing for market shifts, Cube offers a faster, more flexible alternative to complex forecasting platforms.
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Pricing: Custom pricing starts at just $2,000/mo
Anaplan is a cloud-based platform that offers demand planning solutions to help businesses anticipate and manage demand fluctuations. It integrates internal and external data to provide real-time insights and enables companies to adjust their supply chain strategies accordingly. Anaplan's platform supports scenario planning and predictive analytics so that users can make financial decisions.
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Pricing: Pricing is not publicly available
Board offers enterprise-grade demand planning software to handle planning processes for large businesses. It facilitates collaboration across global teams and leverages data to identify external market drivers impacting demand plans. The platform uses financial planning and reconciliation to help enterprises align supply with demand.
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Pricing: Pricing is not publicly available
Workday Adaptive Planning offers demand and supply planning solutions for analyzing and sharing demand and supply plans. The platform uses machine learning for forecast accuracy and supports driver-based modeling for flexible scenario analysis. Workday can manage asset and labor mix, inventory and supply forecasting, and distribution planning.
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Pricing: Pricing is not publicly available
Wrike provides resource management tools to help teams allocate, track, and manage resources within projects. Its features include workload views and resource allocation tools. Wrike's platform works with Gantt charts, Kanban boards, and time tracking to support project planning and execution.
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SAP Advanced Planning and Optimization is a supply chain management tool that offers modules for demand planning, supply network planning, production planning, and global available-to-promise (ATP) capabilities. SAP APO helps with forecast accuracy, resource utilization, and supply chains. It can also provide reliable sales order confirmation dates for accurate tracking.
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Pricing: Pricing is not publicly available
The right software helps you anticipate demand trends, optimize resource allocation, and align financial planning with your company’s goals.
If your priority is financial forecasting and budgeting that adapts to demand shifts, Cube is a great fit. Cube empowers finance teams by automating data consolidation, enabling scenario modeling, and providing real-time insights—right within Excel and Google Sheets.
Book your free demo with Cube today.