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Author's profile photo Maheedhara VRSireesh

External Forecasting using SAP IBP

In this blog post, I am going to discuss the feature External Forecasting, which is going to be released in SAP IBP 2205 version.

What is External Forecasting?

SAP IBP already offers several Forecasting Algorithms, but the External Forecasting Functionality can integrate SAP IBP with any Forecasting algorithm that is running in RStudio or Visual Studio.

Why do we need External Forecasting Models?

  • Though SAP IBP provides many Forecasting Algorithms, it cannot cover every business requirement.
  • Use the latest features and developments in AI/ML functionalities to provide better forecasting results and improve Forecasting Accuracy
  • Use Algorithms specific to an Industry eg. Retail customers can use LSTM and ARIMA-LSTM models for better forecasting results
  • Using Artificial Neural Networks and Recurrent Neural Networks might provide better forecasting results for Non-Linear data patterns.
  • The Forecast Models based on ML will get better over time as they are constantly trained on new data and have an edge over static models.

what are the advantages of off-the-shelf statistics tools like RStudio or Visual Studio?

  • New Algorithms and new functionalities for existing algorithms are developed regularly in these tools. Ex: A Combination of ARIMA and Convoluted Neural Networks can give better results
  • These Algorithms can be executed in Cloud using cloud services like AZURE ML Service making execution faster, reliable, and efficient
  • The quality of different algorithms can be evaluated faster, and One algorithm can be quickly exchanged with another one
  • Integrate 3rd Party services like weather forecasts using API Feeds which may impact forecasts

How does this work?

The external algorithm running outside of SAP IBP gets the required input from the SAP IBP system, it calculates the forecast and sends it back to SAP IBP. There it is leveraged the same way as the forecasts calculated by internal algorithms. You can add one or more external algorithms to a forecast model. When you do so, you can also specify custom parameters and independent variables that should be considered by the algorithm.

you can add the external algorithm to your forecast model the same way as you add any others. To enable the use of external forecasting algorithms in SAP IBP, you need to set up the new SAP_COM_0830 communication scenario in SAP IBP. Please refer to 3170544 for more information.


So far we understood what is external Forecasting, how it can help customers in their SAP IBP Journey, and how you can use it in your implementation. Using this feature can help customers to use any custom Algorithm they want while using SAP IBP. I do hope you found the information in External Forecasting interesting. Please comment if you need more information

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