Setting the Right Forecast Accuracy Target: How to Avoid the Pitfalls of Too Tight or Too Loose Goal
Setting the proper forecast accuracy target is a pivotal task in any business that aims for optimum productivity and cost-effectiveness. However, defining that goal may not be as clear as one might think. Companies need to strike a delicate balance. Many organizations have goals arbitrarily set, perhaps by a previous leader, and may lack clarity on the logic behind how the goal was established.
The key to avoiding these pitfalls is effectively calibrating your forecast accuracy target. One way to examine whether your forecast accuracy target is too conservative or aggressive is by leveraging 'Minimal Interval Variance.'
Minimal Interval Variance (MIV) is a statistical concept that examines the most granular calls offered at your lowest interval level (usually 15 or 30 minutes). It's an invaluable calculation that provides critical insights into your operation's inherent variability. Comparing your target forecast accuracy with your MIV gives you a more realistic perspective of your staffing needs while accounting for unexpected variability in workload.
We have developed a simulation tool at WFM Labs to aid in your forecast accuracy calibration process. Our tool simulates different scenarios by comparing your forecast accuracy target or goal with the minimal interval variance. It leverages assumptions built on your hours of operation and the number of calls offered. Our tool gives you a basis and insights into whether your goal may be too aggressive, conservative, or well calibrated.
By comparing your forecast accuracy goal with the MIV using our new tool, you can better align your goals with reality. A significant positive deviation may indicate your forecast accuracy might be too conservative, suggesting you could afford to aim for tighter accuracy. A negative deviation, on the other hand, might imply an over-ambitious or even impossible forecast accuracy target, urging you to reconsider and set more achievable goals.
Correct calibration of forecast accuracy goes a long way in maximizing productivity and growth. Yet, this task might seem daunting without the right tools and analysis. That's where we come in. At WFM Labs, we aim to provide you with the tools and insights you need to understand better and manage your staffing needs, helping you excel in workforce management. By leveraging Minimal Interval Variance and our new simulation tool, you have a better chance to find the right balance in your forecast accuracy goals, positioning your business for sustainable success.