Understanding Sales Forecasts

This chapter discusses:

• Forecasts.

• Revenue and shadow forecasts.

Forecasts

In PeopleSoft Enterprise Sales, forecasts are estimates of future sales revenues based on current opportunities, their projected revenue estimates, closing dates, and other factors. If your access profile permits, you can edit forecast data and add rows to make adjustments to forecasts. You might combine the forecasts of 10 team members to produce one roll-up forecast for the team. You can view forecasts at a summary level and then filter and sort summaries for analysis.

You can generate forecast subtotals, and you can create charts to view forecasts graphically. You can also use the Combined Forecasts page and the standard download feature to export forecast data to financial modeling programs outside the database.

PeopleSoft Enterprise Sales enables you to configure forecasting to your organization's business processes and reporting period needs. Sales representatives can generate and view their own forecasts and submit them to management at the appropriate reporting times. Managers can generate forecasts for sales representatives that are visible to them on the territory tree. Senior managers can view an overall forecast of all their groups by generating one high-level roll-up forecast that provides an overview of the organization's outlook.

In PeopleSoft Enterprise Sales, sales representatives, managers, and financial analysts work with sets of data determined by their user access profiles and territory tree visibility. In this way, managers in one division have access to their staff's data but not to the data of another division.

PeopleSoft Enterprise Sales forecasts are based on:

• The structure of sales territory trees.

• Opportunity details managed by sales representatives.

• Revenue and shadow forecast allocations, which reflect the percentages of opportunity activity attributed to each opportunity team member's forecast.

Revenue and Shadow Forecasts

PeopleSoft Enterprise Sales provides two forecast variants, each with a different focus:

• Revenue forecasts are projections of an organization's opportunity activity from a financial perspective; they provide information about the amount of revenue coming into the enterprise.

  A revenue forecast is based on the opportunity team's allocation percentage. Typically, 100 percent is allocated to one sales representative on an opportunity for the purpose of revenue forecasts. However, you can distribute the allocation percentage across two or more opportunity team members. The allocation percentage for an opportunity team must total 100 percent.

  Revenue forecasts are also known as split revenues. Revenue forecast amounts are calculated by multiplying the estimated revenue amount by the team member's allocation percentage.

• Shadow forecasts are projections of an organization's opportunity activity from an operational perspective; they enable you to evaluate the performance of sales staff by comparing quotas to shadow revenue allocations.

  A shadow forecast is based on the opportunity team's shadow percentages. The shadow forecast is operational in nature. The shadow percentage for an opportunity team does not have to total 100 percent. In the event that the total is greater than 100 percent, the amount over 100 percent is double-counted.

  Shadow forecasts are also known as double counts; however, not every shadow forecast includes a double count. Shadow forecast amounts are calculated by multiplying the estimated revenue amount by the sales user's shadow percentage and then adding the shadow amount.

The following table shows three ways that you might assign revenue and shadow allocations to two representatives, SREP1 and SREP2, who are working on an opportunity. The table shows how those allocations affect corresponding forecasts: