This article was updated on July 10, 2018.

Financial forecasting is challenging in a world full of volatility, uncertainty, complexity and ambiguity (VUCA). Change happens fast and can disrupt our ability to keep up. Each and every passing year we see events unfold that have a major impact on the global economy and the ability of organizations to make accurate financial forecasts.

With recent changes in regulations, and more coming, human capital management (HCM) is among those volatile, VUCA landscapes that HR and finance leaders need to navigate.

Look Ahead, But Not Too Far

Accurate forecasting can be difficult — even in a climate of relative stability — but the sheer velocity of change today makes the usefulness of any forecast problematic at best. The horizons are getting shorter and looking ahead can be nearly impossible when each of your underlying assumptions topples. Revisiting your financial forecasts in light of change can be crucial to the continuing usefulness of any financial forecast. You'll have to change your approach from the traditional "snapshot" to a "live streaming video."

In Indonesia, for example, where many global businesses operate, the minimum wage changes often, not just at the national level but at the provincial level, according to Forbes. Tax levels change too, making compliance in Indonesia an always dynamic effort.

The point here is simple: forecasts can, and sometimes will, need to change. Having a strong, integrated human capital management system in place can help you establish a firm foundation for flexibility, as you'll need to be ever-agile in a VUCA world.

Here are three ways to solidify your forecasting process.

1. Engage in Regular Discussion

You should talk about the assumptions underlying any financial forecast. When those assumptions are proven false, which can happen overnight, your leadership team needs to get together and reassess, modifying assumptions and the overall financial forecast. Sounds time consuming, right? Yes, but it's one of the only ways to maintain the relevancy of any financial forecast. Finance and HR leaders should partner to share HCM data and make collaborative decisions in the areas of talent and resource allocation.

2. Let Data Inform Your Forecasts

Today, trusted and complete data is the foundation for well-informed decision-making. The rapid pace of change requires putting a higher priority on data accessibility and analytics to help guide and provide context to any key decisions. According to the ADP report, Dealing with a VUCA World: HR's Investment Opportunity, having integrated structures and systems in place can support the collection and analysis of your most important data.

Successful organizations are often data-driven and leverage their talent and resources with a real-time view of data. There will always be a need to align HR strategies with the business, but to do that you'll need to look at non-HCM data, such as sales projections and project timelines, to help forecast and align HCM needs. The capacity to collect data from an HCM system that is fully integrated throughout the organization is key.

3. Bake Resilience and Agility into Your Process

You'll of course, make the best forecasts you can with the information you have at the time, but be ready to reassess. You'll always have tough choices to make in HCM, and even the most data-driven decisions present risks. It's no longer a matter of if you'll need plan B, but when. For example, a Plan B might involve supplementing full-time workers with seasonal part-time employees rather than hiring additional full-timers, or starting a retraining program if the company decides to pursue a different line of business.

Whatever your plans, if you're not integrating agility and flexibility into your HCM strategy, you're inviting trouble.

Forecasting risk is ever-present in the increasingly VUCA-centered business world. But if you have HCM systems you can trust to provide accurate data, structure your processes with agility in mind and always prepare for possible change, you should be able to make better, more informed decisions for your workforce and your financial forecasting.

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