It has long been expected that automation of the sales force could help address longstanding issues in the sales forecast. In practice, this has not been the case. Likewise, you would assume that refining the management of potential bookings and revenue would be an organization’s top priority. This too has not happened; for many organizations creating the sales forecast continues to be a manual process of intense labor and data manipulation done within spreadsheets. The importance of the sales forecast to the financial and operational performance of a business is obvious; now gaining attention is the integrated business plan that finance and operations groups have been establishing, which my colleague has written about (See: “Integrated Business Planning – More Important Than Ever“). In creating the sales forecast and monitoring the continuous elements of the process, sales operations people need to do everything they can to accomplish integration, aggregation, approval and distribution of the sales forecast and to enable analysis of it as well.
This is the area where Right90 competes, offering an on-demand application as part of the cloud computing movement. It provides a sales forecasting application in the rental model of software as a service (SaaS), which makes the tool available not just for Sales but for finance and operations management to address the revenue performance of the organization. This broader focus and improving sales forecasting through dedicated tools is increasing in importance, as I found in our benchmark research on sales forecasting and demand planning. An acute issue is accuracy: Only 16 percent of participating organizations have 90 percent or better accuracy in their forecast, and in almost half of organizations, people “game” the forecast to their own advantage.
These and other findings lead us to advise sales, operations and finance executives to work collaboratively to make improvements. Right90 addresses this need with a set of capabilities that as well as core sales forecasting enables input directly from the source sales and account managers in its Sales Forecast Capture, statistical forecasting and integration of the forecast into Salesforce CRM, Oracle CRM, SAP and Oracle ERP. This mix of capabilities can help organizations improve their sales forecasting process.
The sales forecast can be an indicator of an organization’s sales performance, and this impacts manufacturing and operations functions, and if problems are known and addressed, it could dramatically improve the accuracy and value of it. Right90 has realized this and introduced new capabilities to apply analytics to the process. Last year the company introduced Right90 Change Analytics, which examines changes to determine why they have occurred and their impacts. These capabilities provide a consistent way to discover the drivers of change, which could be from specific sales activities, price changes, losses to competitors or changes in customers’ behavior. This step toward optimization and management of the forecast is followed by a new offering, Right90 Trust Analytics. It provides the means for any person in the organization to examine and perhaps improve the quality of the sales forecast through the application of analytics.
This new application has a simple interface to determine the trust value of the forecast based on history or credibility and can be used as a key management method in the sales organization. The intuitive elements of it are easily seen in a demo of the application working. These new optimization capabilities help users move from just sales forecasting to addressing sales performance management, as this focus is a valuable presales activity that other suites do not address currently. Right90 has mapped out the steps to achieve a best-in-class sales forecast, but now it must convince customers of the value proposition and reasons to focus on its improvement. For most sales organizations, the value can be improvement within a one quarter time frame of forecasting, which is one of many processes and underlying systems that need to be improved. Most importantly, Right90 begins to examine the “trust factor” and provide a benchmark of how organizations of all sizes and vertical industries are performing with their sales forecast.
The business challenge for Right90 is not the quality or focus of its products but making clear to organizations what will happen if they don’t make improvements and what the material value could be to their sales, financial and overall business performance. Right90 should focus on the relatively simple activity of helping organizations transition from manual forecasting with spreadsheets, which the bulk of organizations do today and also directly provide a means for this transition as a specific service. Helping organizations first understand the lack of accuracy and quality in their current forecasting efforts and then provide the tools to migrate are critical steps for Right90 to gain faster adoption.
The company recently brought on Arthur Wong as CEO to help lead it to the next level of growth and guide it to execute and, I hope, focus on the key activities and communications required to become a larger software company. Right90 will need to further expand its approach to demonstrate value to finance and operations and show how it can become an integral component of an organization’s sales and operations plan and the demand and sales and operations planning (S&OP) processes. It is also critical for Right90 to address the daily activity of the sales pipeline that every sales organization knows is where output becomes input to the sales forecast.
Automating the sales forecast is necessary to improve it and is essential for every organization that manufacturers or sells products and services. For tools providers this is a significant market opportunity globally. Right90 has an innovative approach to automation with Trust Analytics to achieve the best possible forecast based on history and a self-improvement optimization technique that could be an exciting way to generate improvements for sales organizations. With Trust Analytics, Right90’s emphasis on the “trust factor” should find an audience and be one of the most interesting advancements in sales analytics and performance management in 2010.
Mark Smith also blogs at ventanaresearch.com/blog.