Your organization has become increasingly sales and marketing focused; with the rise of the VP of Sales to much more strategic role. But, your company is still using spreadsheets for sales forecasting!
Does it bother you that such a strategic process is being run with stone-age technology? It should. The bad news: You are missing significant value and risk being overtaken by your competitors. The good news: Misery loves company. According to Ventana Research, 49% of companies are still in using archaic (Excel or home-grown solutions) methods to automate sales forecasting.
So, how do you explain to the now strategic VP of Sales why your company should move off spreadsheets or some other home-grown solution and give you weekends with your family?
Spreadsheets:
- Spreadsheet hell. When is the last time you were in a forecast meeting and you spend more time arguing who had the latest version of the “final final plan.” One of our customers actually had NINE different versions of the Annual Operating Forecast. The CEO and CFO had different versions!
- Lack of accountability. If everything is in spreadsheets, it is virtually impossible to measure forecast accuracy or hold sales reps accountable to their forecast. They can always argue “you had the wrong version—here is the correct one—and my forecast was correct!”
- Garbage in = Garbage out. Many companies use JIT or Lean Concepts for SCM and Demand Planning Applications, yet they use spreadsheets for forecasting. It seems crazy that the back-end of the cash-to-cash process is highly automated like a finely tuned machine, but the front-end is being run by an archaic process using spreadsheets. If you expect to get a great production plan based on your wonderful SCM and Demand planning application, you are mistaken; those applications take Sales Forecasts as a primary input. If the Sales Forecast is no good, then the Demand Plan will no good.
Home-grown
- Hit by a Bus Syndrome. One of our customers had a wonderful home-grown forecasting solution. One smart IT person built and maintained it. He went on a two week vacation, the system broke down and the company was literally crippled. Should your company run a strategic business process with a single point of failure?
- It’s in the IT Queue. When is the last time you re-aligned your territories? Or re-arranged your product hierarchy? Can your IT group keep up with your business changes? Typically, not. That means you get in the IT Queue and wait for your home-grown solution to catch up to changing business models. Sales Forecasting (and the VP of Sales) can’t wait for the IT queue.
Sales and marketing differentiated businesses make crucial decisions based on the sales forecast; they need to grow up from spreadsheets or they will lose to competition who prices more competitively and has faster product availability. How do best-in-class companies price competitively and have faster product availability? They are best-in-class forecasters and they don’t use spreadsheets.