Getting SALES To Cooperate With Forecasting (Gulp!)

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cooperateThere are 2 and ½ good reasons to gain input from sales people during the forecasting process. First is to provide feedback on the financial budget vs. expected actual. And second, but most importantly to the demand planning people, is to collaborate on the final forecast for downstream planning. Of course, sales forecast vs. actual performance is a clear means for personnel performance evaluation of sales people.

Extracting a timely and accurate forecast from the sales team has been — and always will be — a challenge.  But if demand planners can gain the true cooperation of the sales team, the rewards can be great in terms of forecast accuracy.

While every forecasting situation is different, there are several common points that, if handled correctly, can result in a cooperative and beneficial effort for demand planners and sales professionals alike.  Usually this cooperative effort is the under pinning of an improved Sales and Operations Planning (S&OP) process made possible by a redesign of the way in which sales people produce their forecasts and the tools they use.

5 Beginning Keys to Success 

Success starts at the top with the head of sales – The agreement or contract that the head of sales has to sign is to absolutely require compliance and discipline of the sales people and expect in return that their inputs will influence the demand planning outcome. This in turn means that salespeople should form a contract with the business to produce the forecasted sales they provide. Measuring forecast accuracy is the best way to highlight where improvements need to be made.

Demand planning people must appreciate the change required – Since most sales people are coming from spreadsheets and informal systems of their own, demand planners need to remain cognizant of the impact of this change on their sales colleagues. Forecasting runs counter to sales people’s nature because it has the tendency to lessen their flexibility and pin them down to a contract-like commitment.

Forecast system design is critical – Considering the change, the forecasting system must meet the sales people half way (from spreadsheets) to an easy-to-use, non-time-consuming interface preferably available even on mobile devices that does not add more administrative workload. Give them a starting point (baseline forecast) to adjust and expect a reason for their overrides. Remember sales people want to focus their schedules on strategy and face time.

Carefully choose what you ask for from the sales team – Take care in demanding too much detail from the sales team’s input process. While detail is required for planning, it is the enemy of most sales professionals. Their focus is on dollars, new business and fast transactions. This implies that there is a shallow depth to the detail you can expect on a monthly basis from them.

Publicize success – Sales people are competitive by their very nature so establish an environment where they can compete openly. Choose an influential (credible amongst his peers) sales person to assist in the design and testing of the collaborative forecasting system since most sales people tend to follow credible leaders. Run prototype tests by the sales team and respond to ideas and design change suggestions by the lead sales group. If the lead group accepts it then the rest of the team will follow the winners (aka, leaders).

Building a forecasting process that meets the needs of everyone in the business can be as much a political problem as a technical problem.  Making clear what the end goals are and understanding the constraints from all sides makes all the difference in the project’s success.  If your company is successful, you can improve the reliability and accuracy of your demand forecasts by 5% to 25%. That translates into significant profit downstream.


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This post was written by John Hughes