{"id":90930,"date":"2020-02-25T09:00:41","date_gmt":"2020-02-25T17:00:41","guid":{"rendered":"https:\/\/www.microsoft.com\/en-us\/dynamics-365\/blog\/?p=90930"},"modified":"2023-05-31T15:21:27","modified_gmt":"2023-05-31T22:21:27","slug":"how-predictable-is-your-sales-forecast","status":"publish","type":"post","link":"https:\/\/www.microsoft.com\/en-us\/dynamics-365\/blog\/business-leader\/2020\/02\/25\/how-predictable-is-your-sales-forecast\/","title":{"rendered":"How predictable is your sales forecast?"},"content":{"rendered":"<p>Sales forecasts are wrong more than half the time, according to <a href=\"https:\/\/www.millerheimangroup.com\/in\/resources\/resource\/selling-in-the-age-of-ceaseless-change-the-2018-2019-sales-performance-report\/\" target=\"_blank\" rel=\"noopener noreferrer\">CSO Insights<\/a>. That\u2019s just slightly worse than a 10-day weather prediction!<\/p>\n<p>It turns out that sales forecasting in practice is less science and more guesswork, depending heavily on gut feel and spreadsheets for most organizations. The process is prone to bias and error and usually not robust enough to take into account all the factors that might impact sales. As a result, sales forecasts all too often miss the mark.<\/p>\n<p>Inaccurate sales forecasts not only hinder planning, budgeting, and territory alignment but also erode sales performance and investor confidence. To avoid these problems, more sales organizations are turning to automation and artificial intelligence (AI) to increase forecasting accuracy.<\/p>\n<h2>Obstacles to accurate forecasting<\/h2>\n<p>While optimism is a great motivator, it\u2019s the bane of forecasting, resulting in overinflated numbers. On the other end of the spectrum, some sellers sandbag, intentionally entering overly conservative forecasts that they can then easily beat. Then there\u2019s fear, even when sellers don\u2019t have enough quality deals in the pipeline, they continue to rely on low-quality deals in their forecasts to avoid scrutiny. Meanwhile, sales managers, overburdened and under-supported, don\u2019t investigate the commitments their sellers are making.<\/p>\n<p>Besides human nature, there are many structural barriers that pose obstacles to accurate forecasts. For example, information is incomplete, forecasts tend to look backwards, and there\u2019s a lack of intuitive tools.<\/p>\n<h2>Forecasting best practices<\/h2>\n<p>When evaluating your own forecasting processes, here are some best practices to consider:<\/p>\n<ul>\n<li><strong>Streamline and automate: <\/strong>An integrated process leads to more accurate forecasts by ensuring your data flows seamlessly from one step to the next. Manually copy and pasting information between tools isn\u2019t just time-consuming and tedious, it\u2019s also error-prone. In addition, automation enables your organization to scale and better control sensitive sales data.<\/li>\n<li><strong>Anticipate adjustments:<\/strong>&nbsp;Market, business, and competitive influences are always evolving, so your sales managers need real-time visibility and the ability to quickly adjust the forecast to reflect trends.<\/li>\n<li><strong>Do reality checks: <\/strong>Intuition has always played a role, but it leads to sales forecasting mistakes. Incorporating built-in AI to augment seller-generated forecasts ensure a more objective and reliable forecast.<\/li>\n<li><strong>Augment pipeline data:<\/strong> The typical forecasting process tracks deals using linear stages that may not accurately reflect deal progress, especially in longer, complex deals. Instead, organizations should incorporate a customer\u2019s actual journey including emails, calls, meetings, and content downloaded to better predict the likelihood of purchasing and focusing seller energy on the best deals. Here again, AI plays a critical role in harnessing large volumes of data such as account and pipeline data as well as historical performance to gauge deal progress and drive pipeline insights.<\/li>\n<\/ul>\n<p>Like the weather forecast, it\u2019s not possible to predict sales accurately all the time. But there\u2019s certainly room for improvement.<\/p>\n<p><span data-contrast=\"auto\">The new forecast<\/span><span data-contrast=\"auto\">ing<\/span><span data-contrast=\"auto\">&nbsp;capabilities&nbsp;<\/span><span data-contrast=\"auto\">of<\/span><span data-contrast=\"auto\">&nbsp;Dynamics 365 Sales&nbsp;<\/span><span data-contrast=\"auto\">and Sales Insights&nbsp;<\/span><span data-contrast=\"auto\">can&nbsp;<\/span><span data-contrast=\"auto\">help.&nbsp;<\/span><span data-contrast=\"auto\">Our new forecasting capabilities enable organizations to accurately predict sales&nbsp;<\/span><span data-contrast=\"auto\">using prebuilt intelligence<\/span><span data-contrast=\"auto\">&nbsp;and automation<\/span><span data-contrast=\"auto\">.&nbsp;<\/span><span data-ccp-props=\"{}\" data-wac-het=\"1\">&nbsp;<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Predictive<\/span><\/b><b><span data-contrast=\"auto\"> forecasting:<\/span><\/b><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">O<\/span><span data-contrast=\"auto\">rganizations&nbsp;<\/span><span data-contrast=\"auto\">can&nbsp;<\/span><span data-contrast=\"auto\">use built-in AI&nbsp;<\/span><span data-contrast=\"auto\">to<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">objectively&nbsp;<\/span><span data-contrast=\"auto\">predict&nbsp;<\/span><span data-contrast=\"auto\">revenue<\/span><span data-contrast=\"auto\">&nbsp;and&nbsp;<\/span><span data-contrast=\"auto\">complement<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">sales&nbsp;<\/span><span data-contrast=\"auto\">forecasts submitted&nbsp;<\/span><span data-contrast=\"auto\">by sellers<\/span><span data-contrast=\"auto\">.&nbsp;<\/span><span data-contrast=\"auto\">AI-generated&nbsp;<\/span><span data-contrast=\"auto\">predictions&nbsp;<\/span><span data-contrast=\"auto\">not only&nbsp;<\/span><span data-contrast=\"auto\">take into account signals and data from the current sales pipeline&nbsp;<\/span><span data-contrast=\"auto\">but also&nbsp;<\/span><span data-contrast=\"auto\">factor in<\/span><span data-contrast=\"auto\">&nbsp;historical performance to&nbsp;<\/span><span data-contrast=\"auto\">reflect<\/span><span data-contrast=\"auto\">&nbsp;the reality of the customer journey.&nbsp;<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true}\" data-wac-het=\"1\">&nbsp;<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Pipeline intelligence: <\/span><\/b><span data-contrast=\"auto\">Sales<\/span><span data-contrast=\"auto\">&nbsp;managers&nbsp;<\/span><span data-contrast=\"auto\">can&nbsp;<\/span><span data-contrast=\"auto\">track changes in the pipeline with snapshots and deal flow visualization. With snapshotting, managers can freeze the forecast data at a moment in time, to perform analysis and drive accountability. The deal flow visualization provides an intuitive approach for identifying how the pipeline has changed between snapshots, allowing managers to drill into the exact deals that have contributed to the increase or decrease in forecast commitment.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true}\" data-wac-het=\"1\">&nbsp;<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><b><span data-contrast=\"auto\">Standard forecasting:<\/span><\/b><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">Sales teams can&nbsp;<\/span><span data-contrast=\"auto\">streamline and automate the&nbsp;<\/span><span data-contrast=\"auto\">often&nbsp;<\/span><span data-contrast=\"auto\">time<\/span><span data-contrast=\"auto\">-consuming<\/span><span data-contrast=\"auto\">&nbsp;forecasting process<\/span><span data-contrast=\"auto\">. O<\/span><span data-contrast=\"auto\">rganizations&nbsp;<\/span><span data-contrast=\"auto\">can<\/span><span data-contrast=\"auto\">&nbsp;natively create and manage bottom-up sales forecasts, including customizing the forecast models, adjust<\/span><span data-contrast=\"auto\">ing<\/span><span data-contrast=\"auto\">&nbsp;the forecast, and unifying forecasting with pipeline management.&nbsp;<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-contrast=\"auto\">&nbsp;<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true}\" data-wac-het=\"1\">&nbsp;<\/span><\/li>\n<\/ul>\n<p>Visit the <a href=\"https:\/\/dynamics.microsoft.com\/en-us\/sales\/overview\/\" target=\"_blank\" rel=\"noopener noreferrer\">Dynamics 365 Sales<\/a> webpage for more information on how the new forecasting capabilities in Dynamics 365 can transform your organization\u2019s sales forecasting. Sign up for a free trial of <a href=\"https:\/\/dynamics.microsoft.com\/en-us\/sales\/sales-tool\/free-trial\" target=\"_blank\" rel=\"noopener\">Dynamics 365 Sales<\/a>. For an in-depth overview of these capabilities please read this <a href=\"https:\/\/www.microsoft.com\/en-us\/dynamics-365\/blog\/it\/2020\/02\/25\/driving-accountability-with-advanced-forecasting-in-dynamics-365-sales\/\" target=\"_blank\" rel=\"noopener noreferrer\">blog post<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Sales forecasts are wrong more than half the time, according to CSO Insights. That\u2019s just slightly worse than a 10-day weather prediction! It turns out that sales forecasting in practice is less science and more guesswork, depending heavily on gut feel and spreadsheets for most organizations. The process is prone to bias and error and<\/p>\n","protected":false},"author":5562,"featured_media":90714,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ms_queue_id":[],"ep_exclude_from_search":false,"_classifai_error":"","_classifai_text_to_speech_error":"","footnotes":""},"post_tag":[],"product":[4713],"content-type":[18],"topic":[7609],"audience-type":[7684],"audience":[4684],"ms-author":[],"coauthors":[2302],"class_list":["post-90930","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","product-dynamics-365-sales","content-type-thought-leadership","topic-automation","audience-type-sales","audience-business-leader","review-flag-alway-1593580307-456","review-flag-artif-1680214263-579","review-flag-free-1593619511-304","review-flag-new-1593580245-522"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v24.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>How predictable is your sales forecast? - Microsoft Dynamics 365 Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.microsoft.com\/en-us\/dynamics-365\/blog\/business-leader\/2020\/02\/25\/how-predictable-is-your-sales-forecast\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"How predictable is your sales forecast? - Microsoft Dynamics 365 Blog\" \/>\n<meta property=\"og:description\" content=\"Sales forecasts are wrong more than half the time, according to CSO Insights. 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