Abstract:
Lack of visibility, economic uncertainty, market upheavals... No doubt, the ability to plan and predict, establish effective strategic plan, based on forecasts built on accurate assumptions, is now a critical skill for businesses wishing to implement their strategy and manage it proactively.
As well, establish budget forecasts linked to strategic objectives, develop new relationship between the operational and the financial domain, make decisions faster and more efficiently, have a proper information system, define in a better way the objectives, roles and responsibilities of the organization’s different levels... are key issues to meet the current economic challenges and compete gaining competitive advantage.
Faced with these challenges, business managements are wondering:
- How to reduce the length of the decision-making process and gain in agility?
- How to increase the added value and reliability of forecasting processes?
This work proposes to answer these questions, introducing, in the first chapter, the concept of forecasting, contextualizing it historically and set out its main objectives and relevant applications in business field.
Particular attention will be devoted to the analysis of the Banking Industry, business that more than others require forecasting activity to comply the increasing regulatory and capital adequacy constraints and monitor the uncertainty that the economy reserve.
In this regard, in the second chapter will be presented the case of a leading Italian Banking Group, describing the models and the assumptions of the forecasting models of Operating Income and Economic Value Added (EVA) that the Bank has implemented.
Finally, the third chapter will focus on the results and output of the models that will be analysed and will lay the foundation for the final considerations of the work.
