Futuring
and Innovation: Planning and Forecasting I
CS875-2202C-01
Unit
5 Discussion Board 2
Raphael
Brown
Colorado
Technical University
Instructor:
Dr. Cynthia Calongne
Date
Due: 03/31/22
Concepts
of Forecasting and Predictions
Disclaimer:
No one has the ability to precisely forecast the future.
However, in business, one must continuously look for changes, both in the
external and internal surroundings. As a result, it is necessary to make
informed guesses about the future from time to time. In this case, forecasting
is a vital tool for planning that may be beneficial. Allow us to learn more
about forecasting techniques.
When creating predictions regarding the future direction of a corporation or firm, forecasting is done using trend analysis and data from the previous and current periods. So, in essence, data about the company is gathered and evaluated, and analysis is performed to anticipate future situations that are likely to occur. As a result, forecasting is a critical instrument in strategic business planning.
Managers often create forecasts (at various levels,
including statisticians, specialists, economists, and consultants, among
others). They include a significant amount of data collection (both historical
and current) and data analysis. Scientific tools and methodologies are also
used in this process. Nevertheless, predicting is not a precise science at the
end of the day. There will always be some degree of speculation and observation
involved. At this point, the expertise and experience of these professionals
come into play.
The following are some essential
qualities or elements of forecasting:
· Forecasting
is only concerned with events that will occur in the future.
· It
assesses the likelihood of a future event or transaction occurring or taking
place.
· It
entails the examination of facts from both the past and the present.
· Forecasting
is the process of making predictions using scientific tools and procedures.
· However,
it also requires some educated guesses and observations.
Identifying and
comprehending the organizational structure
There are an almost infinite number of things that may
influence a company's destiny. Identification of all of these variables is
neither feasible nor desired. To generate an accurate projection, managers must
first identify the elements on which they should concentrate their efforts. As
a result, both internal and external aspects must be investigated to discover
the company's strategic components.
Predicting what will
happen in the future
Now that the groundwork has been built, the next stage
is to develop a precise and scientific projection of the future. A mix of
scientific methods and procedures is used in conjunction with professional
judgment and observations. The prediction is not a perfect strategy but rather
a map that will guide you through the future.
Determination of
Disparities
There will be no prediction that is 100 percent
correct. A thorough examination and analysis of any variances or deviations
from the projections are required. This will aid in the production of more
accurate projections in the foreseeable future.
Making Modifications to
the Forecasting Procedure
Experience and practice are essential in developing
the necessary expertise and professional judgment. With each cycle, the
forecasting process is fine-tuned even more. As a result, we can learn from our
errors and inadequacies and continue to improve our forecasting techniques.
In an odd twist of fate, although there has been a
steady fall in demand for physical books throughout time, the pace of decline
seems to have slowed and even steadied in recent years. B & N states that
commerce has grown marginally for its physical reading material. The company
expects to close just eight locations this year, down from the previously
announced intention to close six in the previous year (Wahba, 2016). There is
some validity to this increase in demand for physical books. The proverbial
pendulum seems to be swinging somehow, as Amazon established a physical bookshop
in University Village in Seattle, indicating that the tide is turning (Wahba,
2016). Amazon now plans to construct a second bookstore in the Westfield
University Town Center Mall in Southern California, with 400 more locations
expected to open around the country in the future (Van Grove & Li, 2016).
Amazon is guaranteeing that it is riding the crest of a wave of growth in book
sales at brick-and-mortar shops after the enormous transition in the industry years
ago to online reading and e-readers, as reported by the Wall Street Journal
(Van Grove & Li, 2016).
As stated in several conversations, the notion of
forecasting and prediction is a constraining approach that does not foresee enormous
upheavals in the environment and, as a result, does not succeed in constructing
alternative future scenarios beyond the "typical" sequence of events.
Forecasting and prediction methodologies may incorporate processes that provide
the results necessary to anticipate possible future scenarios; however, it is
also possible that many forecasting methods tend to focus on only a few and, as
a result, severely restrict the scope of possibilities. As explained by Dr.
Walonick, forecasting enables individuals to make choices based on factors that
can be changed to prepare for the future. In contrast, prediction requires considering
probable changes that might affect the future (1993). When predicting, Walonick
(1993) makes three assumptions that must be taken into consideration:
1. For
starters, it is feasible to forecast the future or the changing course of
events with high confidence in some instances.
2. There
will always be blind spots, some variable that appears out of nowhere.
3. In
other cases, providing projections is counterproductive since forecasts may
lead to policy changes, which can alter future results.
Dr. Walonick discussed several forecasting and
prediction methods (1993). According to some, a method known as genius
forecasting is comparable to "psychics" in that it is based on
intuition, insight, and luck (Walonick, 1993). In addition to trend
extrapolation, another strategy often used in the corporate sector is the
consensus method. Experts are brought together to debate emerging elements and
forces that may impact the future and establish practical preparedness to
anticipate the resultant changes (Walonick, 1993). Regardless of the specific
approaches used, a mix of procedures and adequate analysis are required to
generate plausible future scenarios. Although no organization or person can be
fully prepared for every possibility, they may plan for and create suitable
reactions to those considered the most probable and most influential in their
particular situation.
An example of a renowned forecast was John Elfreth
Watkins Jr., an American civil engineer who lived around 1900 and made several
predictions, some of which were realized. One such forecast seems to be about
mobile phones, and it was titled "Telephones Across the Globe."
Watkins' prognosis was as follows (according to Geoghegan, 2012):
"It is anticipated
that worldwide wireless telephone and telegraph connections would be
established. A husband in the middle of the Atlantic will be able to
communicate with his wife in Chicago, who will be seated in her boudoir at the
time of the conversation. We shall be able to telephone China with the same
ease we already communicate from New York to Brooklyn..."
The concept of wireless telephones was incredibly
groundbreaking, mainly when Alexander Graham Bell made the first
transcontinental phone call roughly 15 years later when he invented the
telephone (Geoghegan, 2012). The study placed at the time of Watkins'
prediction was one of the determining factors in making it a reality. The
telephone was conceived in 1876 and first used in large cities in 1900 when it
was widely adopted. In 1915, however, it was only after Sir John Ambrose
created the vacuum diode, followed by Lee de Forest's invention of the triode,
which amplified signals, that the first transcontinental phone conversation
could be made (Greatest Achievement, 2016). Interestingly, Bell and his financial
backers offered to sell the patent to Western Union Telegraph at the time of
invention. Still, the company declined to purchase the patent because it was
perceived as nothing more than a toy that would not amount to anything
(possibly due to a lack of foresight on the company) (ShoreTel, 2016). The
installation of a telephone in the White House in 1878, which then-US President
Rutherford B. Hayes used, was a significant factor in the success of the
telephone. The telephone was a significant factor in the success of the
telephone (PBS, n.d.). Western Union filed a lawsuit against the Bell Telephone
Company in the following years, which was lost consistently. Bell Telephone
eventually became American Telephone and Telegraph (AT & T) (PBS, n.d.).
References
Geoghagan, T. (2012) Ten 100-year predictions that
came true. BBC News. [Online] http://www.bbc.com/news/magazine-16444966
Greatest Achievements (2016). Telephone timeline.
Retrieved from http://www.greatachievements.org/?id=3625
PBS (n.d.) More about Bell. Retrieved from
http://www.pbs.org/wgbh/amex/telephone/peopleevents/mabell.html
ShoreTel (2016). Alexander Graham Bell and the history
of the telephone. Retrieved from
https://www.shoretel.com/content/alexander-graham-bell-and-history-telephone
Van Grove, J. Li, S. (2016). Amazon to open 2nd
physical bookstore, this one in Southern California. Los Angeles Times
[Online].
http://www.latimes.com/business/la-fi-amazonbooks-malls-20160308-story.html
Wahba, P (2015). Amazon Is opening an actual,
real-life bookstore. Fortune. [Online] Retrieved from
http://fortune.com/2015/11/03/amazon-bookstore/
Wahba, P. (2016). Barnes & Noble's stores provide
relief as online sales plunge. Fortune.[Online] Retrieved from
http://fortune.com/2016/03/03/barnes-noble-results/
Walonick, D. (1993). An
overview of forecasting methodology. Retrieved from http://www.statpac.org/research-library/forecasting.htm