All companies have goals and by definition must have a strategy, whether articulated or not to arrive at those goals.
Of course, those goals must be realistic, but often small businesses through a combination of naivete and inexperience set goals which are impossible to achieve. Even large companies set goals which prove impossible due to unexpected circumstances, political or economic factors, or sometimes by market disruptors.
Why is Strategic Forecasting Important?
Strategic forecasting creates a link between budgets and goals but also enables users to accommodate those unexpected scenarios. This means that goals can be changed or operational strategies amended to accommodate changing circumstances. A strategic forecast needs to be fluid and flexible incorporating multiple “what if” scenarios so that these changes or potential changes can be explored. By integrating a strategic forecast into your business planning and budgeting process the business will be better prepared and will create more accurate forecasts.
Using a good strategic forecast, the business can set targets that match the company’s goals, those targets though need to be built from the bottom up so that each assumption can be tested. In many forecasts, the sales forecast is simply the end goal. However, a strategic forecast would build that sales forecast from the bottom up by looking at conversion rates, marketing budgets, economic growth rates and a myriad of other factors. In this way, the fundamental forecast will be more accurate and if problems become evident then goals can be amended or extra resources allocated to underperforming areas to ensure that they are achieved.
This approach enables the four strands of budgeting, strategic forecasting, and planning to be drawn together to take account of the environmental, economic, available resources and competitive drivers that define and shape the businesses outcome.
What’s Wrong With Excel?
Excel has been the traditional budgeting and strategic forecasting tool for a number of years, but, as many studies have proven, the majority of excel models contain fundamental flaws, therefore compounding the difficulty that companies have in achieving their goals. Businesses, that then attempt to build in the necessary flexibility and sophisticated scenario planning into an already flawed model create a recipe for disaster. ProForecast has taken this complexity and built it into an easy to use cloud-based application which enables companies to build sophisticated strategic plans, quickly, accurately and inexpensively. Plans that can be shared and in which the logic and assumptions can be easily tested and replicated, so creating adaptable, accurate and flexible scenario planning.
Try ProForecast on a FREE trial now and experience the best in strategic forecasting.