Have you ever felt like you’re driving your business blind by only looking through the rear-view window? Traditional business reporting gives you visibility on what has happened over the last month, last quarter, or last year. While historical data is certainly important, it is often historical or “rear-view window” data. It is often too late to react to a trend or opportunity revealed by a standard report. By the time you identify a trend or opportunity through a standard report, it may be too late to capitalize on it or avoid a catastrophe. This is where Predictive Analytics within Microsoft Dynamics 365 Business Central shifts the paradigm.
Here is how Business Central’s Predictive Analytics empowers you to make more intelligent decisions, sooner, and more profitably.
1. Optimizing Inventory with Demand Forecasting
For companies with inventory levels, it is a constant balancing act between having too much in stock and tying up cash flow and incurring additional costs for storage and having too little in stock and risking losing sales and alienating customers.
Business Central utilizes its capabilities in predictive analytics to examine historical sales data and current market conditions to create Demand Forecasts for companies with inventory levels.
The Decision: Instead of making educated guesses on how many of something to order based on historical sales data, you use artificial intelligence to predict future demand.
The Result: You save costs and maximize the effectiveness of your purchasing budget.
2. Mastering Cash Flow with “Smart” Predictions
Cash flow is lifeblood to any business. One of the most stressful things about being a business owner is worrying whether you are going to have enough cash to meet those bills and taxes that are coming due next month.
Business Central offers a Cash Flow Forecast chart that goes beyond simple due dates. With Azure AI, it can learn the payment patterns of your unique customers.
The Insight: Perhaps it recognizes that “Customer A” is a Net 30-day customer but pays in 45 days.
The Decision: Cash Flow Forecast automatically takes this into account and updates the payment date.
The Result: With this information, you can secure financing or put off expenses before a cash shortage occurs, rather than scrambling when checks start bouncing.
3. Mitigating Risk with Late Payment Prediction
Offering credit to your customers is an essential part of sales. However, it is also an area of risk with “bad debts.” Hunting down late payments is a tedious task. In fact, at times it may even harm your relationship with the customer if you end up chasing the wrong one.
What Business Central Does
Late Payment Prediction is an extension available on Business Central, developed by Azure AI. It analyses all your outstanding invoices and assigns a “risk score” to each of your customers based on its prediction of late payment.
The Decision
With Business Central, you have an opportunity to be strategic with your collections. If a customer has a “high risk” score, you may send a friendly reminder a few days before the payment is due. Conversely, if a customer has a “low risk” score, you may wait a few days after the payment is due to avoid annoying your customer.
The Result
With Business Central, your accounts receivable team becomes efficient, and your cash flow improves without annoying your customer.
4. The Competitive Advantage: Data-Driven Agility
The ultimate advantage of using predictive analytics with Business Central is agility.
In a changing marketplace, the companies that succeed are those that can change direction quickly. If your ERP system is warning you about a potential drop in sales or cash flow problems weeks in advance, then you have time to react.
You are not fighting fires; you are preventing them from happening.
Conclusion
Predictive analytics is no longer something only the titans of industry with the deepest pockets for IT can afford. With the integration of these features directly into Business Central, Microsoft has put the power of big data into the hands of SMEs.
If you are ready to stop looking in the rearview mirror and start looking through the windshield, then it is time to tap into the predictive potential of your Business Central solution.
