The Purpose of Forecasting
Forecasting in the simplest terms is a business’s way of predicting the future using mainly historical data as the input. Just as a weather forecast allows you to plan your outfit for the day ahead, a business forecast enables the organisation to prepare for the future by implementing actions which confront or counteract changes in the economic climate.
Due to operating in an uncertain environment it gives organisations an estimation of what the future will hold, thus, allowing the business to make informed decisions. The more accurate the forecasting, the more effective the business strategies and project plans which stem from it will be.