The requirements of the two are, therefore, very different; to confuse them weakens both processes. As soon as the organization introduces a bias resulting from this budgeting element the subsequent forecasts become less independent – the relationships between the elements more complex, the assumptions more clouded, and the figures less easily understood by the participants. A further problem with the organizational dynamics of forecasting is the adaptation of forecasts to changed circumstances in the external environment. It is often assumed that forecasts are immutable: the annual forecast is to be renewed in 12 months' time, and not a moment earlier; the five-year plan will only be replaced in five years' time. It is felt an admission of failure if such forecasts have to be changed. This is understandable where these so-called forecasts are actually targets to which the organization is committed. But clearly true forecasts (as opposed to budgets or targets) should be amended as and when the environment changes. The best managed organizations probably have a quarterly review of their annual forecast (and associated budgets), so that forecasts for the remaining quarters can be based on the latest information. The most sophisticated indulge in rolling forecasts whereby at each quarter a full year ahead is forecast – in other words a new fourth quarter is added to the plan. This takes much of the drama out of the annual planning cycle, and means that there is not a period in the year when the forecast may only cover a matter of days. This can happen, and often does, if the new annual forecast is only agreed in December, to cover January onwards! Even five-year forecasts may need to change quite dramatically each time they are reviewed, in this case typically on an annual basis. Over the preceding year it is more than likely that the external environment, as well as the organization's own internal environment, will have changed significantly – and in ways that were not predicted. The overall economy will have changed direction, competitors will have changed strategies, consumers will have changed their tastes. The new five-year plan has to take all this into account. The position may be different in the case of long-range planning, since it may look decades ahead. The effort involved in such a process may mean that such forecasts are repeated less frequently; typically every three to four years, rather than three to four times a year. This is acceptable when the time horizon is two decades or more – since any interim changes are unlikely to have direct impact on the shorter-term budgets – though any major changes detected should, even so, prompt an immediate review.