Year 2023 marks the real beginning of a post-pandemic era and normalisation of businesses. With borders fully open, businesses face an ever-increasing competition for customer share where only those which can harvest and transform business data into actionable insights will enjoy a significant advantage over the rest.

Many businesses derive business insights from internal reports on past transactions, and while this is not wrong, it only provides a partial viewpoint by reporting backwards after your weekly or monthly closing. Here is where predictive analytics come into place – in addition to traditional backwards facing reporting, predictive analytics applies data to special algorithms to detect and project future trends about customer insights and purchasing habits before they take place. By identifying and highlighting potential risks and opportunities, such predictive analytics can be extremely valuable for organisations.

Here are the key benefits of using intelligent data to drive business outcomes:

1) Use of predictive analytics in sales recommendations to increase sales.

For predictive analytics to be applicable, companies first need to record and collect their transactional information within the same database – most companies use an ERP system for this purpose. One example of an ERP system is SAP Business One HANA, which integrates and manages an organisation’s complete workflow across all business functions such as accounting, sales, purchasing, inventory, logistics and more.

In addition, the HANA version of SAP Business One comes with an in-memory database to support actionable insights and operational analytics.

One HANA feature that is a great help to sales teams is the Sales Recommendation feature – by analysing your customers’ past purchasing behaviour using advanced algorithms, SAP Business One HANA provides real-time sales recommendations by suggesting items ordered by customers of a similar profile, the customer’s own historical purchases. To smoothen the selling process, your salesperson can view the customer’s outstanding receivables and past payment behaviour before approving a discount or confirming the quotation.

 

2) Optimise inventory stock levels by forecasting customer demand. 

Procurement of inventory is traditionally based on reviewing current stock levels and the gut feeling of experienced employees. Having excess inventory reduces liquidity and increases overheads. On the other hand, an overly conservative forecast can lead to inventory shortage.

The Intelligent Inventory Forecast tool in SAP Business One analyses historical sales data and past seasonal trends to provide estimations for demand. The forecasting model uses TESM (Triple Exponential Smoothing) and/or LRDTSA (Linear Regression with Damped Trend and Seasonal Adjust) algorithms to predict the optimal inventory volume to replenish.

 

3) Maintain good cash flow by forecasting future cash inflows and outflows. 

A healthy cash flow is key to an organisation’s financial health. SAP Business One’s Cash Flow Forecasting tool allows the user to forecast the company’s cashflow based on configurable measurements and criteria. 

Your accounts team can easily configure the most relevant Cash Flow Forecast for your organisation by including the most relevant measurements such as Opening Balance, Outgoing/Incoming Transactions, Expense Forecast, Sales Forecast and Closing Balance, as well as relevant criteria such as Recurring Postings, Recurring Transactions, Blanket Agreements, Journal Vouchers, Payment Delays and more. Your user can also check or uncheck elements to be included or excluded from the forecast – some examples include Purchase Orders, Sales Orders and more, or decide to include/exclude certain transactions based on your Certainty Level configurations to derive the most accurate forecast. 

This is a quick and easy way to monitor and track your organisation’s cash flow in near real-time and will enhance the effectiveness of business decision making within your team.

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In the new normal, predictive analytics is no longer a ‘good-to-have’ option as competition has ramped up significantly and the old ways of business may no longer be relevant to your consumers’ evolving needs.

To hear more about SAP Business One and how it can benefit your business, contact us for a further discussion. 

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• See further information on Inecom’s PSG Packages for SAP Business One.