For the past two decades, we as sales teams have been fixed in roughly the same conversation about our forecasts, which are largely an aggregation of opinion, heavily biased by the hope or fear of hitting or missing our targets. These opinions resemble the data in every way. There are numbers with dollar signs, revenue types, probabilities and dates. We spend thousands of hours and millions of dollars rolling up our forecasts, sweating over our progress and paths to target, only to have those efforts dismissed by finance.
Finance, by contrast, prefers to view forecasts through a different lens. Focusing less on subjective sales weightings and manager adjustments, and more on projections composed of algorithmic combinations of historical and current period bookings. The finance opinion removes sales target bias, but also lacks a connection to important leading-indicators and actionable improvements to sales outcomes.
It’s Time to Redefine Your Forecast
Most of us are familiar with these points of view, which typically result in charts similar to the one below.
Enormous amounts of time, effort, and cost are invested into these projections, only to conclude in disagreement. This materially impacts our ability to react quickly to changing market conditions, to shift our hiring and to allocate resources. We can do better.
Part of the problem is that we’ve come to accept these differences of opinion as if they are laws of the universe. And to reconcile our points of view, we have adopted band-aid processes with names like “triangulated forecasting.” However, the problem remains the same, in that the final call comes down to a negotiation of opinions between those who are least connected to the demand signals. Worse, our forecasts are often disconnected from our customer-level execution, and therefore lack insight, early warning, and actionability.
This is a particular challenge in times of flux, when changing market conditions demand our organizations to be more responsive. It’s time to redefine our forecast by incorporating the right forecasting tools and expertise to connect the dots.
This is just the beginning.
Download our whitepaper Improving Your Company’s Resilience with a Data-Driven Forecast for more insights now.