Before building the revenue operating model, what horizon is recommended for long-cycle deals to calculate averages?

• A. 12 or 18 months
• B. Three months
• C. Six months
• D. 24 months

Answer: (A)

Choosing a twelve- to eighteen-month horizon for calculating averages reflects the reality that long-cycle deals unfold over more than a year, often spanning several buying stages, deployment, and onboarding. Using this window helps you capture the full revenue realization pattern, smoothing out quarterly noise and seasonality while still staying relevant to current planning. It ensures late-close revenue and ramp-up effects are included, so the averages reflect what a typical deal contributes over most of its life cycle.

Shorter horizons, like three or six months, tend to miss later-stage closings or implementation revenue, which can skew the averages and understate true, longer-term value. On the other hand, waiting twenty-four months can introduce too much variability from shifts in pricing, product mix, or market conditions, making the averages less stable for forecasting.