Forecasting

Forecasting sales for a multi-product company is a tedious and dispiriting task, not least because there is little chance of making predictions that anywhere match the outcomes. However, if the process is split into a number of stages, with full participation of the different organizational groups at each stage, then the very process of planning can produce invaluable results.

absolve helps in every part of the process. By storing a complete sales history at the lowest level of detail, various market segments can be identified and their characteristics studied. Using statistical analysis teamed with knowledge from the sales force it is possible to derive estimates of growth trends and seasonality factors in these various market segments and link these to various external factors.

At this point absolve's analytical features highlight exceptions to these patterns often pointing up an unperceived threat or a missed opportunity. By combining sales volumes with margin information then the “cash cows” can be identified and protected.

The next but ongoing step is to constantly reforecast and re-evaluate the plan on a monthly or even weekly basis. By overlaying the initial predictions with information from the various players a detailed but understandable forecast is built up. For example “hot Summer implies general growth but this cannot be met in the North East because of supply chain problems”. Top level reports can always be broken down to reveal these various assumptions and the effects of changing them.

Because forecasts are “broken back” to the lowest level it is easy to compare actual sales and review these variances against the forecast. This can be the most valuable part of the process as it forces all levels of management to communicate in a structured way, and the use of “notes” and “alerts” via the web and email makes this easy to set up.

Interpretations

“Forecasting” has many different interpretations in business.

What you forecast, how and how often, depends on individual company circumstances, your “product”, the market you're in and what the forecast is to be used for.

Mathematical forecasting techniques are of limited use where markets are not cyclical or seasonal, or are developing, since most rely on trend analysis and sensitivity to external, measurable factors.

Reliable forecasts come from those who have actual customer contact. Experience has shown that grass roots forecasts by the salespersons most closely associated with a particular product line or territory can be surprisingly accurate.

absolve provides an excellent multi-user framework within which all stakeholders to the forecasting process can work together to develop and revise business plans.

See forecasting in action:

• Corus >

See Also

Overview  Financial Modelling (budgeting, planning)  Reporting (KPIs, management accounts, allocation, consolidation)  Customer & Product Profitability  Resource Allocation and Capacity Planning 

[IMAGE:News]
News

[IMAGE:Brochures]
Brochures

[IMAGE:Contact]
Contact  DCL

[IMAGE:User Area]
User Area