Forecasting – Essential to Every Strategic Business Decision
Call it an art or call it a science—just so long as you call it essential to the continued success of your professional services firm.
Forecasting is the material acknowledgement of the much-ballyhooed crie de coeur that time is money. The more you shell out doing stuff that’s providing no return, the more you’ve wasted. Full stop.
Every last strategic decision a person makes in his/her business should be powered by forecasting, in some shape of form.
Here are seven tips for making the most of it.
1. Pick a Method
According to the Journal of Business Forecasting Methods & Systems, there are three models of business forecasting systems. In the time-series model, data are projected forward according to one of any number of established methods, each of which works from the same basic premise: patterns from the recent past will persist. In the cause-and-effect model, there’s the assumption of an inciting incident that produces a particular outcome. In the judgmental model, managers attempt the seemingly impossible; forecasting in the absence of useful historical data, either because there ain’t any about or because they’ve been rendered obsolete
Business forecasting is an ever-more-complicated beast, emerging spectacularly in recent years as the Swiss Army knife of business tools, characterized by a vast range of tackle, from simple electronic spreadsheets to enterprise resource planning software, electronic data interchange networks, advanced supply chain management schemes and an endless stream of Web-enabled technology. Clever forecasting systems have to be able to facilitate data-sharing partnerships among businesses, accept input from a range of different data sources and platforms, operate on an open architecture and feature an array of analysis techniques and approaches. Big breath. Acquaint yourself with the breadth of considerations in play before making any commitments on this front.
3. Choose Measurement Periods that Make Sense
The success someone will enjoy with his forecasting foray is tied up significantly with the period of time he/she nominates to measure. While forecasting is inherently associated with future events, the task depends heavily on events of the past: specifically, during that period singled out for data aggregation. Pick stretches that are neither typical nor atypical.
4. Spread the Wealth
Forecasts are needed throughout an organization. From the mailroom to human resources to the reception desk; every arm of a professional firm needs to be reaching into the potential of this particular brand of predicting. Forecasts produced by an isolated band of individuals are useless. The more heads involved in this delicate and notoriously oversensitive approach to securing future business success, the more likely it will produce some joy.
There’s no promise of growth for that which is never reflected upon. Any forecasting technology worth its teeth provides the means for measuring its accuracy. Indeed, the more sophisticated the forecasting technology, the greater the need for robust accuracy measurements that take it to task.
6. Never Drop the Ball
Forecasting is an ongoing concern. It’s folly to imagine you’ve ever completed this task, can tie it tidily up in a string and move on to the next thing. Forecasts need to be measured, compared and updated…constantly.
7. Seek Help
Just as options for forecasting tools have exploded in recent times, so has the pool of folks with the expertise for advising on them. At 360 Visibility, there’s no shortage of valuable counsel available. Engage our assistance. We’ve got lots to share.