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