Adding the amounts of all business opportunities will appear optimistic, and directly multiplying them by fixed probabilities may not be close to reality. Forecasting needs to allow managers to understand where the judgment comes from, rather than pursuing beautiful numbers.

Difficulties in actual use

Record the expected transaction date, customer decision-making progress, budget confirmation and risk factors, distinguish employee judgments from signed contracts; save a snapshot of each forecast for review.

How to arrange functions and responsibilities

For example, if the customer has confirmed the plan but the purchase time has not yet been determined, the opportunity can be reserved, but it should not be regarded as a confirmed payment this month. Both the amount and time need to be explained.

Scenario example

Check the reasons for deviations against the actual results, and simply judge individuals without forecasting deviations; check whether there are traces on the modification date, and whether the lost order opportunity exits the forecast in time.

Check the processing results item by item

  • The forecast page can display this judgment and the last snapshot at the same time, indicating the amount, date and reason for the change in risk factors.
  • When managers ask about differences, they can find the basis from changes in customer procurement plans or changes in program scope.
  • Business opportunities of different maturity levels should be viewed hierarchically, and opportunities that have not been discussed in the budget should not be confused with opportunities that have a clear contracting node.
  • The summary number also needs to clarify whether it includes taxes and fees, whether it is cross-currency, and whether the amount is expressed in terms of the total contract amount or current revenue.
  • Forecast bias can be used to improve the caliber and information integrity. It is not appropriate to simply ask sales to fill in every opportunity more optimistically.
  • Retaining the real reasons for lost orders and delays is more valuable than modifying historical snapshots to make the numbers look better.

Verification and continuous maintenance

Forecast discussions can retain the different judgments of supervisors and sales, and indicate their respective bases. The final summary adopts a clear version. Only subsequent review can tell whether the difference is caused by changes in customers or changes in internal judgment.