Organizational and methodological issues of the forecasting process – Literature review and forecasting process design model
Abstract
This study systematically reviews and discusses the existing literature with regard to forecasting process organization. Although there have been various calls in literature to address the forecasting process design more comprehensively, a vast amount of literature is still concerned with purely comparing forecasting methods. In total, 179 papers are examined and organized along the input, generation, and output phases of the forecasting process. The review investigates research questions arising with respect to data management, method selection and application, the handling of unintentional and intentional biases with respect to forecasting, the interaction between system and human components with the forecasting process, and performance measurement and incentivation regarding the final forecasts. The findings are synthesized into a forecasting process design model that highlights the interdependencies among different forecasting tasks and components. The analysis emphasizes top management support, appropriate resource endowment, organizational commitment, training and learning possibilities, and cross-functional communication and collaboration as crucial for an effective forecasting process management. Establishing a separate forecasting function entirely responsible for the forecasting process organization and closely linked to corporate planning and management seems to be a promising approach. Further research combining different disciplines within business management should be conducted to better understand the contingencies arising within forecasting process design.