Actuals bring a forecast to life
Actuals underpin both the assumptions and the choice of architecture. The word ‘actual’ means existing in act or fact, existing now, present, current.
Actuals are the way we sanity check our assumptions and adjust the plan to keep us steering the business in the right direction, much like the pilot of a plane has to adjust for the conditions in place at this present time, or the captain of a ship adjusts course to compensate for deviations from the planned course.
Actuals undoubtedly means financial results. These can be relatively straight forward to incorporate, given the right system. Being able to integrate these quickly and easily is an important consideration.
And actual data is not confined to financial metrics. We need to compare what has transpired with our assumptions. If we planned for churn to be 3% and its only 2.5% or even 3.5% we need to be able to see the impact of this on our plan. We also need to understand there is a variation so we can get to the underlying reason. Is our churn due to poor customer service? Can we improve and get back on track?
We need to understand where our actual data is going to come from, and how that will get fed back into our model, improving our understanding of all the moving parts of our business, and whether they are helping, or hindering our progress towards our target.
This data is often stored in other systems, such as CRM systems or billing systems, and consideration is required as to how it will be incorporated into the final solution. Financial systems are notoriously poor at measuring non-financial data.
Some key questions to consider:
How will you update your forecast plan with actual data over time?
For which non-financial metrics do you need actuals?
What insight can you gain from comparing forecast against reality?
The purposeful planning programme helps tech scale-ups clarify their assumptions to create transaparent operational plans that keep investors feeling safe, secure and supportive.
