A recent article in The Times© – Exchange rates threaten to derail Hornby – reminded me not only of the fun I had as a child playing with Scalextric® model cars but also about the perils of not being able to forecast and manage the impact of exchange rates. Most organisations, to a greater or lesser extent, are affected by volatile currencies whether through purchase of components and raw materials, overseas subsidiaries or sales to emerging markets. Indeed the increased globalisation of trade makes the need to understand the impact of exchange rates – for most organisations – ever more important.
For organisations operating and selling using different currencies, a forecasting system that only operates in £’s, should not be an option. Tools such as BPC will enable organisations to forecast in as many currencies as required, provide reporting currency capabilities, enable “Best Case – Worst Case” evaluation and to understand the impact when rates are not to plan.
Exchange rates are only one example of business variables that we have developed forecasting solutions to help manage, others include inflation, pension costs and energy rates. Forecasting systems cannot predict what exchange rates are going to be – if they could we would be very rich – but they can help organisations anticipate and manage change.