Forecasting and Scenario Modelling Government Style
We learn from International reporting that Government Central Banks around the world were deliberately and willing understating risks to their political masters. In some cases they simply feared for being the bearing of bad news and party poppers. Some even pompously thought their masters might not understand the complicated financial implications of the asset bubble.
In the case of Ireland the extent of this overvaluation was a high as 15% in Q4, 2005. Asset prices were notably higher than the actual asset values. We now know for sure that most Central Banks and banks did not have the adequate financial and budgeting software reporting tools to demonstrate and accurately forecast these risks. Most of this complicated work was done on wonky excel spreadsheets. Everyone knows that a picture paints a thousand words; therefore some flexible forecasting graphs with forecasting scenario modelling would have easily demonstrated the problem to outsiders and government officials.
This dangerous anomaly was not communicated adequately. Quantrix Forecasting and Modelling Software for MXI high end reporting capabilities could clearly demonstrate these risks much more clearly with scenario modelling features and slider bar options. (See Slider Bars in Action)
So how could have proper Forecasting and Modelling software have helped the Treasury and Ministers of Finance. Chancellors and Ministers have only minutes in their busy schedules so they need a solution that can quickly identify forecasting risks and challenges. Quantrix Modeller would have made the point so clearly and effectively they would be compelled to act earlier. It goes without saying that proper financial risk analysis and scenario modelling might have intervened earlier with Northern Rock, Lehman Brothers, Anglo Irish Bank.
This situation does not only apply to the banking and property markets. It should also apply to your business as remember a forecast is defining what tomorrow's business will be. A great start should be to take the Excel challenge. Find more details on the excel challenge.
So how to do your Forecasting and Scenario Modelling Government Style? Just don't and hope for the best.