Forecasting

Demand and revenue forecasting requires different levels of detail depending on your timeframe.

The major trap is to not clearly define how your forecast process is build … ultimately your inputs and intelligence will come from a confusing portfolio of sources and at the end, produce a wrong view or expectation.

The below view, a very theoretic one, provides an idea of what i mean with a granularity approach … you will need more detail for the short term and, at the end, only need a very high level number when it concerns looking a few years ahead.

Look at this view :

You easily see what i mean … if we were to suppose your 60 M$ business would stay stable for the years to come, you would not need to review your forecast at the same levels for each period to come … short term, you have your orderbook in place … longer term, you will know the new businesses that will come in … very long term, customer trend and input, combined with marketing intelligence will be key.

Define your process and who provided inputs … then stick to it !