Forecasting

With Lumel EPM, you can easily generate a rolling forecast by using methods such as period range, average of period range, or applying formulas to initialize the forecast. Leverage the integrated time intelligence and time extension features to create half-yearly forecasts or fiscal period forecasts. In this section, discover how to configure forecasts, close the forecast once actuals are available, update forecasts, distribute deficits, and extend forecasts.

1. Generating a forecast

To create a forecast, select the Forecast Measure option from the Home or the Plan tab. The forecast dialog box allows you to configure forecasts for open (future) and closed (past) periods.

1. Measure name: By default, the forecast measure is named ‘Forecast’. This field can be updated to a relevant column name.

2. Forecast Period: The time frame for which the forecast is being generated. Lumel EPM's time intelligence determines the open period, which begins with the current month/quarter and can be adjusted to meet your specific needs. The periods preceding the current month or quarter are automatically closed, but you can disable this if necessary.

3. Closed Period: The new forecast measure will be created for past or closed periods as well. If you have actual data for 2024 and are creating a forecast for 2025, then 2024 will be regarded as the closed period. Lumel EPM provides two options for populating closed forecasts: Measure and Formula.

• Measure: The Linked Measure dropdown option allows you to select native measures, data input measures, formula measures, or other forecast measures as the source for closed periods. For instance, if you select Revenue - a native measure, the closed periods will have their values from this native measure as per the corresponding months/quarters/years.

A sample result after applying the 'Revenue' native measure for the closed period:

In another example below, we have chosen a formula measure (Gross Profit) for the closed periods while forecasting profit.

Here is a sample result after applying the 'Gross Profit' formula measure for the closed period:

• Formula: Select 'Formula' from the dropdown, and you can write custom formulas and leverage Lumel EPM's extensive selection of built-in formulas to populate closed forecasts.

4. Open Period: Lumel EPM offers a range of options to configure forecasts. Forecast values can be sourced using one of the three options: native visual measures, formula measures, or values entered using the data input option.

• Measure

If you already have projections in your data source, you can populate the forecasts for open periods from a native measure with the Measure option.

In the example below, we used a formula for the closed period and projected native measure values for the open period.

You can hide the native measure after creating the forecast to avoid displaying the data twice.

• Formula

You can apply formulas to native or visual measures to generate forecasts. In this example, we've created a revenue forecast by multiplying 1.1 to the projected revenue (a native measure), assuming a 10% increase.

• Data input

You can specify a default value if you choose to manually input forecast values. The default value may be a static value, a measure, a formula, or left blank.

a) Static value

The specified static value will be used as a default value when the configured forecast values are null. In the example, the forecast has been created from the ProjectedRevenue native measure which is blank for the Juices category. The static value of 5 million is used in the forecast measure as the default value.

b) Measure

You can use a visual or native measure as the default forecast value when forecasts are blank. In the example, the forecast is based on the ProjectedRevenue native measure which is null for the Juices category. The EnhancedSales data input measure has been used as the default forecast instead of displaying null values.

c) Formula

You can also use a formula as a default value. In this case, we've used 25% of the EnhancedSales data input measure as the default forecast value.

2. Configuring the forecast

Inforiver allows you to create rolling forecasts and choose different methods to populate the forecast values.

1. Target period: You can split the forecast period into shorter time frames or configure the forecast for the whole period. In this case, we have split the forecast period into 3 parts: January to March, April to June, and July to December.

You can also configure for the entire period in one shot as shown below.

2. Select source: You can choose any of the options listed below to populate the forecast-

• Blank: Enter values manually

• Use a measure

• Upload forecast from a file

If you choose to upload forecast values from a file, Inforiver will generate a template file that you can download. You can fill the forecast values in the template file and upload them to the visual.

3. Apply operation: There are 3 different methods that you can use to generate a forecast:

• Period range: The values from a specific period range will be used to initialize the forecast. In this case, we have used the sales from Q4 2023 (Copy period range) to populate the forecast for Q1 2024 (Target period). The duration of the period range should match the duration of the target period. E.g., if the target period is 6 months, then you must select a period range spanning 6 months.

• Single period: The values for a specific month will be used to initialize the forecast. In this case, we have used the revenue from December 2022 to populate the forecast for Apr to Jun 2024.

• Average of period range: The average of a custom time period will be used to initialize the forecast. In this case, we have used the average revenue from Jan 2022 to Dec 2023 to initialize the forecast.

4. Copy period range: The time frame for which to copy data from the source measure.

3. Analysing the forecast

Let's look at the forecast generated with the configurations in the earlier sections.

• Closed period forecasts

The forecast measure generated for previous or closed periods will be greyed out and cannot be edited. Refer to section 1, generating a forecast to learn more about configuring closed periods.

• Forecast using period range

In the example, we've used the Sales measure from Oct to Dec 2023, to populate for forecast from Jan to Mar 2024.

• Forecast using single period

We've used the revenue from December 2022 to create the forecast from April to June 2024.

• Forecast using average of period range

We've used the average revenue from Jan 2022 to Dec 2023 to create the forecast from July to December 2024.

3. Forecast customizations

Inforiver offers customizations that can be applied once the forecast is created.

3.1. Action for closed periods

You have the flexibility to retain the forecasted values or use the actuals after closing a forecast. Navigate to Manage Forecast > Click the edit button against the forecast measure > Action for closed periods section.

a) Overwrite forecasts (default)

The forecasted values are overwritten when the period is closed and the actuals become available. The forecast values are highlighted in blue indicating that they are linked to an actuals value - any updates made to the actuals will be reflected in the forecast. To view the underlying actuals measure, navigate to edit forecast > Linked Actuals Measure.

We've created a forecast from September to December. When the actuals become available for September and the period is closed, the forecasted values are replaced by the actuals.

b) Retain forecasts

The forecasted values are retained even after the actuals are available. This setting enables you to compare the actuals against the predicted values.

3.2. Aggregate forecast grand total

If the column grand total is enabled, you can choose whether the grand total for the forecast measure should be derived from open periods, closed periods, or both. To customize the grand total for forecasts, click on the forecast column gripper and select the desired option from the Aggregate total section.

a) All Periods: The grand total forecast will be the aggregate of the forecasts for open and closed periods.

b) Open Periods: The grand total forecast will be the aggregate of the forecasts for open periods only. The open periods in the example are 2025 Q1 and Q2, hence these will be used to calculate the grand total forecast.

The subtotal forecasts for 2023 and 2024 go blank when the Open Period option is selected. This is because 2023 and 2024 only have closed periods.

c) Closed Periods: The grand total forecast will be the aggregate of the forecasts for closed periods only. In this example, the closed forecasts for 2023 and 2024 are used to calculate the grand total forecast. The subtotal forecast for 2025 is blank as 2025 only has open forecasts. The fields highlighted in red are the closed forecasts, and the field highlighted in green is the forecast grand total.

3.3. Forecast subtotals

Similar to grand total forecasts, you can choose the aggregation method for forecast subtotals. The same 'All', 'Open Periods', and 'Closed Periods' options apply to forecast subtotals.

a) All Periods: The subtotals for the forecast measure will be the aggregate of the forecasts for open and closed periods. In the example, the fields highlighted in red are the forecast subtotals, the fields in blue are the closed periods and the fields in green are the open periods.

b) Open Periods: The forecast subtotals will be the aggregate of the forecasts for open periods only. The forecast subtotal for 2024 is blank as 2024 does not have any open forecasts.

c) Closed Periods: The forecast subtotals will be the aggregate of the forecasts for closed periods only. The fields highlighted in red are the forecast subtotals and the fields highlighted in green are the closed forecasts.

3.4. Show or hide closed periods

You can choose whether to display the forecasts for closed periods. To mask the forecast for closed periods, click on any forecast that is generated for closed periods, click on the Show/Hide icon, and choose Hide closed periods.

The forecast for the closed period is hidden as shown in the image below.

To un-hide the forecasts for closed periods, click on any measure belonging to the closed period, click on the Show/Hide icon, and select Show closed periods.