If you want to hit the booking and revenue targets required to operate a business, you have to manage your sales forecast and pipeline. Optimally you should be able to monitor and act upon them any day of the week and make adjustments whenever you need to. Unfortunately, most organizations have to wait until they finish their manual efforts at the end of the month or quarter, or they miss critical changes in deals and behavior because they rely only on reporting from their sales force automation (SFA) software.  

I have seen this gap in hundreds of sales organizations, including one that I worked with in the 1990s. The SFA package I used then could not supply enough information about the activities that determined changes to the forecast and the potential of the sales pipeline. It kept little information on changes in the movement of sales opportunities and had no capability for time-series analysis to assess small changes to the sales forecast. I had to build some custom sales analytics on top of the application to provide what sales staff needed to be effective. 

Today, 20 years later, not much has changed with SFA. Providers like Microsoft, Oracle, salesforce.com and SAP all have the same issues that they are beginning to address with new applications, and our research identifies a high level of dissatisfaction with SFA’s ability to meet the needs of sales operations and management. 

Managing the changes that happen between the time a sales opportunity is created to the time it is booked is essential to helping sales people sell. The lack of change tracking and time-series management in SFA is one of the reasons why applications for sales forecasting and pipeline management exist, and they should be part of any organization’s sales performance management portfolio. Our most recent benchmark research in sales performance management found forecasting and planning to be the most important application for sales, and focusing on increasing revenue and improving the efficiency of sales processes was the most important benefit from new investments organizations made.  

Along these lines I have been tracking Cloud9, an application provider that initially addressed sales pipeline management and now has expanded to include sales forecasting. The combination of the two into what Cloud9 calls intelligent sales forecasting complements the company’s existing Pipeline Accelerator applications. 

I recently had a chance to review the Cloud9 sales forecasting application and its value with its sales pipeline application. The new application supports the sales forecast and commitment process. At the top level you can manage forecasts as scenarios to determine optimistic and pessimistic variations from the baseline. This ability gains importance as sales executives work with finance and operational management to develop the potential of the sales organization. Once guidelines and policies and the sales pipeline are rolled up into a forecast, you can communicate the forecast to sales managers and reps for review. After any adjustments, deviations and overrides are completed, the forecast can be submitted for commitment. This approach is like how sales organizations operate making it easy to adapt to existing processes and be more efficient in time required for forecasting.  

The application includes notification and collaboration features to enhance interactions with the sales team. Critical is the ability for sales managers and leaders to work toward an agreed-upon forecast through overrides and adjustments to the bottom-up pipeline for a sales team, territory, district, region or whatever level is being adjusted. To do this Cloud9 includes a one-click look at the past behavior of a sales rep or geography or even a customer to see the probability of a deal or forecast occurring. The quick review of a rep lets you see his or her ranking on the team and overall, along with an accuracy ranking in the form of bar charts. From within the application you can make comments directly to specific reps. In addition the application captures changes to the forecast and pipeline and provides a built-in quick audit review that makes it easy to see what has changed without having to view a separate report that loses the context of the review. 

Cloud9’s forecasting dashboard can provide the agreement and commitment status of the current forecast process and also display the pipeline change under it so you can determine what has changed. The application enables you to examine changes to opportunities moving in and out of the pipeline, from business closed, to deals that have leaked out from deletion and are not just lost, to ones that might have been bloated from setting the deal size too large. The software displays unique visualizations to help you examine opportunities from aging, accuracy and potential. Cloud9’s approach is validated with our benchmark research in sales analytics found that sales organizations rank usability for evaluation criteria and the ability to drill and navigate into the analytics as important capabilities they need. 

Managing a sales forecast and pipeline has always been difficult. Many organizations use spreadsheets or business intelligence software, but those are not designed for the process and lack specific tools to manage this critical sales process. Spreadsheets can also introduce errors and waste time and resources. Also many have expended countless amount of time running reports from their SFA and then email but have found wasted time and lack of any context for taking action for improvement. Nevertheless, for those in sales operations who need to perform additional spreadsheet-level analytics, Cloud9 has an Analyst Suite that can help access its data from Microsoft Excel with an integrated add-in or import data from other systems. 

Having sales organizations participate in the sales forecast and pipeline process is critical to ensuring that everyone is working together on the plan and that any issues are identified early and corrected. Timeliness is critical in sales; our benchmark research in sales forecasting found that 63 percent of sales organizations take more than one week to create and compile a sales forecast, which indicates serious room for improvement. Cloud9 can address needs in sales forecasting through its analytics and collaborative capabilities, which are designed for this essential process. If you use salesforce.com you will find Cloud9 integration very useful to streamline forecasting and pipeline management on its SFA. The software can help not just sales but finance and operations work together to effectively plan the revenue generation activities of their business. 

Regards, 

Mark Smith – CEO & Chief Research Officer