Forecasting is an evidence-based process that weights all the available evidence. The role of the forecast is to show what is probable and realistic and it should confirm that set targets are achievable. It’s often the case that targets are set ahead of time and are not supported by hard evidence e.g. this year’s target is “last year + 10% because we feel good about the business and have some evidence of increased demand.”
The forecast should be built using analytics rather than being a simple extrapolation of what’s in the pipeline. Analytics is used to interpret the opportunities, apply weighting based on historical data, and with this approach a more accurate and considered forecast is produced.