The three horizons of forecasting
Forecasting is incredibly important for finance directors and, when done correctly, is much more beneficial than just approximate predictions, says Gill Ringland.Forecasting, for all its faults, is an integral part of business planning in every organisation, whether this is looking at sales and profits for the next 12 months or the next five years. We can integrate forecasts of the economy, business environment and the competition into these. Forecasts aim for accuracy, although predicting the future is fraught with pitfalls, as we have seen with recent election outcomes; each stream adding to the forecast increases the risk of error, which leads many to regard forecasts as no more than staring into a crystal ball. Futurologists make predictions on a daily basis and have developed tools to assist the process, which may assist you to lessen the risk and uncertainty in your forecasting.
This is an extract from the Business & Management Magazine, Issue 252, March 2017.