| by Pier Barattolo, Right90 |
| Most people in organizations do not trust the sales forecast. However, most people would agree that if you could take action based on a trusted sales forecast, they could drive more value in the business. In fact, leading analyst firms have stated that best in class forecasting companies can achieve up to 10% more revenue and 15% lower inventories. If there is clear value to a trusted actionable sales forecast, then what are the barriers? |
| Let’s start with the sales organization. Unfortunately the sales team works in a subjective world where market volatility, unpredictable competitor actions, and fickle customers make it hard to provide a reliable detailed sales forecast. Furthermore, many sales reps don’t have discipline or accountability to forecast consistently to reflect critical changes in future demand. However, the rest of the organization relies on objective data like confirmed orders or signed invoices to take action. When you bring together the subjective data from sales and departments requiring objective data to take action, you get a non-trustworthy sales forecast. We call this barrier the “objectivity gap.” |
From subjective to objective: closing the objectivity gap
Imagine that the sales organization monitored accuracy and completeness of the sales forecast (at a unit and SKU level.) Picture a dashboard that shows you: |
- Accuracy by regions, customers, or sales reps
- Which sales reps were consistently overly optimistic or pessimistic
- Timeliness of forecast data (by customer, product, region)
- Which forecast line items (or reps) had been updated recently (or which ones had not been updated recently)
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| With this information, sales becomes more accountable and accurate and departments can develop trust in the sales forecast. They could act on accurate sales forecast data, adjust for sales forecast bias or previous inaccuracies, and use alternative forecasts where the sales forecast is out-of-date. The dashboard could compare previous shipments, backlog to forecast from sales: not just for revenue, but also for units and ASP. Users could view the sales forecast at the top level, at a granular forecast line item level or any level in between. Given this information, an organization could monitor sales reps’ forecast to drive accountability to individual forecasts. With the proper analysis and historical performance information, an organization can develop trust in the sales forecast—and therefore—begin to act on the sales forecast to drive lower inventories and higher revenue. |
Introducing Right90
Right90 delivers an on-demand software application that does exactly what is described above. Manufacturing industry leaders like Sharp and Mellanox have utilized Right90 to trust their sales forecast, and drive their business based on insight in the sales forecast. The result: customers have seen 20% decrease in inventory, 95% forecast adoption, and 15% increase in forecast accuracy. Through patented technology and a purpose-built approach to sales forecasting, we have created an application that: |
- Captures the forecast from sales organization in rapid, highly adopted manner
- Enables management to vet the forecast – taking it from subjective to objective
- Provides unique insight into exactly how the sales forecast changes and why
- Enable executive to drive their business based on insight in sales forecast
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| If your organization would like to develop a trusted, actionable sales forecast – and achieve lower inventories and higher revenue, reach out to Right90 to see how we can help. Contact Right90 at info@right90.com or right90.com to schedule your free sales forecast assessment. |
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