At a time when shareholders, investors, employees and customers are looking for assurance, the ability of organisations to compile and communicate their forecasts is falling seriously short.

In a survey of more than 1,100 Australian and New Zealand CEOs and senior executives during November and December 2007, Ernst & Young found an alarming lack of confidence in the accuracy and rigor around operational forecasting and published forecast results.

Among a host of disconcerting conclusions, Ernst & Young found that:

• Only 38% of organisations had a better than 50/50 chance of accurately predicting major sales deals they would win. The remainder presumably would have actually done better had they simply tossed a coin.

• Nearly half (45%) of three month revenue and margin forecasts were wrong by more than 20% in either direction.

• Nearly three quarters (72%) of six month forecasts were more than 30% wrong in either direction.

It should be nothing less than alarming that what passes for forecasting in the 21st century frequently turns out to be little more than poorly formulated guesswork - or worse.

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