Forecasting is as much an art as it is a science

What is Forecasting?

Forecasting is as much an art as it is a science. Using knowledge of past trends and likely upcoming events our objective is to predict the future as accurately as possible. In essence, a forecast is what you expect to happen.

To supplement forecasts there are also other areas to consider:

Goals – A goal is what you want to happen. Often businesses set goals or targets to achieve. By applying traditional forecasting techniques you can set business goals based on data driven outcomes. Alternatively, goals can be set by a business and forecasting used to understand if/how those goals are likely to be met. By aligning your goals with forecasting you can spot the gaps and enable better decision-making to achieve your targets.

Planning - In response to forecasts and goals, effective planning involves determining the actions required to make your forecasts match your goals. Incorporating past performance, sales forecasts, and marketing goals into your strategic planning enables informed decision-making. However, even the best forecasting can’t predict all future outcomes. Building scenario planning models enables actionable insights that can either adapt to reflect changing circumstances or identify areas to better optimise towards the goals you are looking to achieve.

Why use Forecasting?

Our clients typically adopt our forecasting services for one of the following reasons:

Marketing planning

Planning your marketing spend for the year can be a tricky business. With the objective of achieving a positive ROI, it is important to understand the impact of investing in different channels on overall sales. With accurate forecasts and transparent models, you can plan for the future while also understanding which levers to pull in order to optimise your results.

Forecasting demand

Understanding the demand for your products or services is essential to maintain control across your organisation’s touchpoints. From supply chain management, to coordination of marketing efforts, accurate sales forecasts can help a company plan more effectively.

Achieving your targets

Gaining control of your targets is essential in any business planning function. Using forecasting methods, you can set achievable goals which will gain you credibility while also encouraging employee satisfaction. Forecasting done well will also help you to understand if ‘what is expected to happen’ matches with ‘what you need to happen’ to meet your goals.

How does Lynchpin do it?

Requirements Analysis

We talk to key stakeholders within your business to identify what problem the forecast is intended to solve, and how exactly it will be used. This is a crucial step towards creating the right bespoke model for you.

Data Gathering

Next, we embark on collecting and preparing all available data that could be used in the modelling process. This stage also leverages the expertise of those collecting and working with this data on a day-to-day basis.

Exploratory Analysis

We spend time getting to know your data and find the key patterns and relationships that will drive the modelling process. This phase can deliver clear actionable insights into the factors that affect your key metrics.

Model Building

There are a range of forecasting techniques that can be applied depending on your objectives and the data available. It is key to choose the right solution for your business. Guided by the business requirements Lynchpin will chose a model that fits your needs.

Implement & Evaluate

We can provide support both in the technical implementation and change management. We have a strong belief in ongoing monitoring and optimisation, and as such encourage a process of testing and improvement to follow the initial implementation.

Trusted Expertise

Our in-house expertise ranges from traditional statistical methods such as regression and Time Series to more advanced machine learning models for example neural networks or random forests. With a breadth of skills across Strategy, Data Engineering and Data Science we can partner with you to deliver a solution that fulfils your needs.

Our services portfolio is broad and comprehensive. You may be unsure exactly what service is right for the outcomes you are looking for and your own situational needs. We’d be delighted to talk more about your business and how we may be able to help.