NEHANET Corporation

Forecasting Done Right: Stop the Forecasting Data Monster so you can Visit Customers.

Forecasting has always been referred to as part art and part science. The art is the human factor.

  • How well does the sales person know the customer?
  • How well can they judge what the customer is telling them and how well can they extract fact from fiction?
  • How well do they separate what they believe will happen vs. what they hope will happen.
  • How optimistic or pessimistic should they be?

The human factor will always be part of the forecasting process and will always be art and not science. The science part of forecasting is much more easily defined and much easier to impact. If you are still using Excel or other spreadsheet programs as your main run-rate forecasting tool, you are missing out on optimizing the science part of forecasting.

If you are currently using a spreadsheet as your main forecasting tool, your monthly forecasting process likely looks something like this.

  • A week or two before the end of the month, a regional forecast file is sent to each region for updating.
  • This may trigger a similar file being sent to each sales manager and/or rep within the region. A lot of what could be customer facing time is lost updating all forecast line items
  • The files are returned with the updates
  • More time is lost rolling the individual forecast files up into a complete corporate forecast spreadsheet before the corporate number is actually known
  • Once visibility into the corporate number is revealed, more time is spent trying to understand why the number is what it is
  • Additional changes and/or verifications may be requested, etc.

The bottom line is this process may take up to two or more weeks, time in front of customers is lost, and by the time the forecast is presented to the executive staff, operations, or other key stakeholders, the information is out of date. Not a good process at all!

But what is the smarter philosophy? Continue reading.