There are a couple of ways to do sales forecasting, the messy/unreliable way, or organized and reliable way. Which one do you practice?
The old messy and unreliable way of doing sales forecasting is actually very interesting and comical. Monday morning meeting where the VP of Sales or CEO asks the sales guys to send him their forecasts of what business is going to close this month so they can discuss it with production and make important decisions on what to start planning for. The sales guys, some optimistic and never accurate, and some conservative and never accurate. They all provide their sales forecasts in spreadsheets or a plain paper with some stuff on it. The VP of Sales who is an expert in copy and paste into Excel will put the numbers together and knowing their salespeople, will add a certain percentage to this and subtract another percentage from that to come close to the numbers he/she thinks are the accurate (inaccurate) numbers. He/She gives those numbers to the President of the company and the Production manager and explains what they need so they can sell. The president of the company then says “yes, no, maybe” and then the production manager says “what, no way, yes way” and shares his/her Excel spreadsheets from the production they put together based on last month forecasts. Guess what, they over/under produced, pretty much all the time.
So what is the problem?
When a company runs a non-integrated system where Sales does not have a specific Sales Process to follow and input their opportunities of what business will close based on where the prospect is at in the sales cycle, then it is a mess. When the production department runs a non-integrated system where inventory production visibility is not available to sales or management but rather just sitting somewhere in someone’s head, then it is a mess. When the CEO or VP of Sales can’t run Business Intelligence by a click of a button (without Excel) to compare sales of last year to this year, last quarter to this quarter, increase in sales, decline in sales, then it is a mess.
If this is your reality today, you need to make a change. The change you need to make is improve the operation by implementing a fully integrated systems and processes in your company where numbers are visible and accurate.
What I am talking about here is this: Integrated End to End Business Management Software such as Enterprise Resource Planning and Customer Relationship Management. WOW, what in the world is that? That simply means, accounting software, manufacturing and inventory management software, sales force automation software, marketing automation software, order management software, shipping and receiving software, all fully integrated.
Any questions: Call Rick Chase at 800-294-2900 x 111.
Tags: Inventory Management, Production Management, Sales Forecasting, Sales Pipeline