Key takeaways
- Inventory forecasting has become a financial concern, not just an operational one, according to Zaeem Batavia, VP of Global Sales for Descartes Ecommerce
- CFOs are increasingly involved in ecommerce technology decisions because forecasting directly impacts profitability and cash flow.
- Spreadsheet-based planning breaks down quickly as channels, SKUs, and sales events multiply.
- Ecommerce businesses can respond by bringing finance and operations together early and adopting forecasting tools designed to handle complexity.
Ecommerce leaders entering a new fiscal year face familiar pressure, but under very different conditions: More channels, more sales events, and increased complexity across inventory, fulfillment, and finance. But what has changed most is not ecommerce itself. It’s the cost of getting your forecasting wrong.
For years, responsibility for inventory forecasting sat squarely with operations teams. Today, that line no longer holds. Forecasting decisions now affect margin, capital allocation, and financial risk at a level that pulls finance leaders directly into the conversation.
Table of contents
- Why inventory forecasting has shifted beyond operations
- Why this matters for ecommerce businesses right now
- What we are hearing from the market
- What business leaders can do in response
- How to get started
- FAQs
Why inventory forecasting has shifted beyond operations
Historically, ecommerce teams focused mainly on getting products listed on the right channels and fulfilling orders on time. Forecasting was straightforward and intuitive, often handled by the warehouse operations team.
They used simple minimum and maximum thresholds, supported by spreadsheets and manual adjustments. That approach worked when sales cycles were predictable and channels were limited, but that’s rarely the case anymore.
To stay competitive and keep growing in a slower ecommerce market, brands now run multiple promotional events each year. They sell across marketplaces and direct channels, managing inventory across warehouses and retail locations.
In this complex environment, simple forecasting is no longer enough. And operations leaders frequently lack the financial expertise, tools, and bandwidth to avoid costly mistakes.
Why this matters for ecommerce businesses right now
Forecasting mistakes have always been costly. What’s changed is how often they occur and how quickly their effects compound.
Increased number of promotional events
Many ecommerce businesses now run five, six, or even seven major sales events per year. Each one introduces risk if your inventory is not positioned correctly across locations.
Overbuying to stay safe often results in markdowns and margin losses after the event. But on the flip side, underbuying leads to stockouts and missed revenue while damaging customer relationships.
Mistakes impact financial wellbeing
Inventory-related mistakes directly affect profitability, cash flow, and working capital. As a result, forecasting is no longer something operations teams should independently handle while finance teams review results after the fact.
Forecasting is now a core input into financial planning and risk management, and Chief Financial Officers (CFOs) are rising into a surprising new role: Researching and vetting inventory management solutions.
What we are hearing from the market
According to Zaeem Batavia, VP of Global Sales for Descartes Ecommerce, this shift is clearly evident in buying conversations over the past several fiscal years.
CFOs lead inventory management software purchases
“It was almost unheard of five years ago for a CFO to kickstart an ecomm software purchase,” Batavia says. “We’re seeing a dramatic shift today where CFOs are initiating a buying process for ecomm businesses struggling with inventory forecasting.”
That involvement is not theoretical. Finance officers are leading the conversation, asking detailed questions about how forecasting tools account for real-world complexity.
“They want to understand if the tool will take into consideration not only their volume of sales, but their seasonality, return rates on certain SKUs,” Batavia explains.
Businesses lack visibility into forecasting workflows
He also notes that many businesses are discovering a blind spot in their internal process when it comes to forecasts.
“They’re realizing they’re managing just huge spreadsheets behind the scenes,” he says. “They actually don’t know what people are doing.”
This lack of visibility and understanding makes it difficult for leaders to mitigate inventory-related risks, especially during busy seasons.
Forecasting challenges cost businesses time
In Batavia’s experience working directly with ecommerce teams, this planning effort can consume a surprising amount of leaders’ time.
“Brand leaders would typically consume, up to the running to peak season, 50% of their time just figuring out these types of problems,” he says.
At this point, leadership realizes forecasting is no longer just an operational challenge or a financial risk. It’s a cross-functional problem that requires an integrated solution.
What business leaders can do in response
The most successful ecommerce businesses are adjusting their approach in three important ways:
- Involve finance earlier. Forecasting requirements are now defined jointly by operations and finance, not handed off after decisions are made. CFOs lead the charge in solving forecasting-related problems.
- Document the forecasting process. Conduct an audit of your current workflows. This includes who makes buying decisions, what data they rely on, and where vulnerabilities and inefficiencies exist.
- Consider technology solutions. Evaluate technology based on its ability to model complexity, not just track inventory levels. Tools must account for seasonality, returns, multiple locations, and channel-specific demand.
As Batavia puts it, "Separating finance and operations is no longer sustainable. We’re very much seeing that the finance function of an ecomm business and the operational function are interleaving, creating an approach to forecasting that we’ve never seen before.”
By leveraging the combined strengths of operations and finance, your business can navigate complex forecasting challenges and mitigate risk.
How to get started
If forecasting is creating friction across teams or uncertainty in financial planning, the next step is not to hire more planners or build more spreadsheets.
Start by bringing finance and operations together to define what accurate forecasting should look like for your business today.
From there, evaluate whether your current systems can support that reality. If the answer is “No,” Descartes is here to help. Ask us about inventory management solutions to meet your needs.
FAQs
Forecasting now directly affects cash flow, margin, and capital allocation. CFOs need confidence that inventory decisions will support financial goals, not undermine them.
Forecasting becomes a financial risk when overbuying ties up capital, underbuying limits revenue, or inventory must be discounted to move excess stock.
Spreadsheets are difficult to maintain as complexity increases. They lack real-time visibility, are hard to audit, and do not scale well across channels and locations.
Leaders should look for tools that model real demand drivers, integrate financial considerations, and reduce reliance on manual planning without oversimplifying complexity.