Getting Started with Siebel Forecasting

This chapter discusses the issues in planning your use of Siebel Forecasting based on the forecasting requirements. Use this chapter in combination with Siebel Applications Administration Guide.

This chapter includes the following topics:

About Forecasting Requirements

Siebel Forecasting provides you with many implementation options. With the importance that forecasting plays in most organizations, and the variety of implementation choices available, you must fully understand these choices. A thorough understanding of your company’s business requirements can make sure that you have the information needed to improve your organization’s technology and business offerings for the entire sales organization.

The ultimate goal is to address the business requirements with less overhead and a higher level of accuracy in a more timely manner. Sometimes, the best way to understand the requirements is to look at your company’s existing process to make sure you cover the basics, and then to evaluate possible opportunities for improvement. You can begin gathering requirements with a list of the reports, screens, systems, and processes that are currently in place. From there, you can drill down on the business process to get a better understanding of the overall objectives and process.

About Forecasting Process Design

Forecasting process design is a way of evaluating the numerous forecasting options available to you. It consists of questions that assist you with requirements gathering and help you to design a streamlined, reliable, and timely forecasting process.

The questions asked during this process are:

Who forecasts?
To determine who forecasts, compile a list of the major participants in the forecasting process. These participants can include account managers, regional or geographic sales professionals, product specialists, industry specialists, overlay sales representatives, and sales managers. Each group is likely to have a different set of requirements. You can select one forecasting approach for one group, and a different forecasting approach for another group.
In some companies, the district managers create a forecast and roll it up to their managers with a committed monthly total for the sales representative. The product specialists and overlay sales representatives can rely on a less formal process by querying against the All Revenues list view to find the information they are looking for, and then using a report, a chart, or exporting to Microsoft Excel to collaborate or capture the information for later use.
Why do they forecast?
Understanding the overriding goals, principles, and objectives behind a forecast is critical. These objectives can vary from one group to another. For instance, the sales department wants to identify potential lags in revenue to redeploy resources faster. Manufacturing wants to avoid production bottlenecks by adequately predicting demand. Professional services needs to use their internal resources more efficiently. Product management wants to provide directors with visibility into the sales pipeline to better drive product specific sales.
After you clarify the goals of the various forecasting constituents, select an approach that works for each group. In general, use the simplest, most straight-forward option that meets the objectives of each group. Sometimes, a single approach works for everyone; often, several approaches are needed.
What kind of information is required?
The information requirements in sales are often very different from the information requirements in manufacturing and accounting. While it is useful to have a sufficient level of detail, too much information can be overwhelming. Typically, sales organizations focus on total revenues for each representative, or opportunity, partner, or account specific revenues. Accounting and manufacturing usually want more detail; they need to know how much of product X was booked last quarter, or how much of product Y is being shipped this quarter.
Each organization has access to the appropriate level of information. You can set up a revenue query for sales that shows only opportunity or account specific information, while setting up a more detailed query for manufacturing that provides users with details on each of the products within a given product line. Apply this same line of logic to the design of your forecast search specifications, so that they include a sufficient level of information for the users involved.
The product quantity forecasting capability of Siebel Forecasting allows you to create forecasts that display information in a hierarchical fashion. For example, you can break down revenues by product line and by product. The kind of information that you want to display in the forecasts determines the aggregation levels that you use for each field (dimension) when you create a forecast series.
How often is the information needed?
While a weekly forecast is fine for some organizations, a monthly forecast is better for others. The Revenues screen allows a sales professional, partner manager, sales manager, or executive to retrieve information in real time, while the Forecasts screen provides users with a way of copying a set of revenues and saving it for future use.
Find a balance between a more structured, scheduled forecasting process, and a less structured, less scheduled forecasting process. With the charts and reports available in the Revenues screen, you can perform an analysis without ever creating a forecast. You can reserve the forecasting process for organizations that really need a snapshot of the information at appropriate points in time.
Is management intervention and adjustment required in forecasting?
In many organizations, a snapshot of the information in the Revenues screen, with some criteria applied to filter out extraneous records, is a sufficient forecasting method. In other organizations, some level of management intervention and adjustment is required as the forecast rolls up to management and executive levels.
In general, it is best to streamline the forecasting process. With fewer intermediaries and adjustments, the forecasting process becomes more timely and less cumbersome. Where possible, the manager and the sales representative must agree on the revenue amount, the close date, the win probability, and the commit status in the Revenues screen, so that the manager does not need to intervene in the forecasting process. This allows an organization to take one snapshot of the information without intermediate steps as the forecast rolls up the management chain. It also confirms a level of agreement between the sales representative and the manager, so that the queries in the Revenues screen accurately reflect the level of anticipated business.
Do sales representatives need to adjust their total dollars forecasted?
Often, the total dollar amount that a sales representative forecasts is equal to the sum total of their forecastable revenues, on a monthly or quarterly basis. In these cases, running a query in the revenue list view, or running a snapshot of the revenues for forecasting purposes is enough to produce a corporate forecast. However, there are organizations in which sales professionals are expected to commit to a monthly or quarterly revenue amount that does not equal the sum of their forecasted opportunities.
For example, a sales representative wants to include $100,000 worth of opportunities in a forecast, even though the representative is only wants to commit to $50,000 in revenue. The Forecasts screen allows the sales representative to include $100,000 in opportunities, while adjusting the total revenue amount on a monthly or quarterly basis to $50,000. Although this can be useful in some situations, it means that the value of the revenues and the value of what the sales representative wants to forecast do not agree.

Note: Siebel Forecasting allows sales team members to enter negative integers in their forecasts.

Guidelines for Improving Forecasting Performance

This topic provides guidelines for improving forecasting performance. Forecasting performance can vary from one company to another based on network bandwidth, server capacity, database tuning, and a variety of other variables. Investigate these possible causes whenever performance issues arise.

As a preemptive move, consider the following performance objectives for forecasting:

Minimize the Number of Records in the Forecasting Table

Use a restrictive Auto Forecast Search Spec. Do not include product or revenue line item details for an opportunity unless they are needed. Only include opportunities that are committed or that meet some minimal criteria.

Consider implementing a process that batches up the revenue records or summarizes the information in the revenues table before the creation of the forecast itself. For example, a customer with hundreds of thousands of detailed revenue line items wants to summarize the related revenue line items into higher level revenue line items before creating the weekly or monthly forecast. This keeps unnecessary detail out of the forecast.

Minimize the Number of Participants

Consider the list of people who really need to forecast in your organization.

If you are creating a global snapshot, you may want only one or two people in the Forecast Series Participants list that do not have a manager-subordinate relationship. Otherwise, the auto-forecasting feature creates a manager’s forecast with the revenues in your company that qualify for forecasting, and a subordinate’s forecast with the same data.

If you are using the departmental forecast, you may not want to include managers and their subordinates at the same time.

Minimize the Duplication of Data

Consider using global snapshots or departmental forecasts. If you are using personal forecasts, consider the personal forecast without details. The manager can still view the details by drilling down on subordinate forecasts, and you reduce the number of copies of revenue information.

Minimize the Complexity of the Forecasting Process

Consider using the Revenues view for many of your day-to-day operations. You can provide overlay sales organizations and product managers with access to the Revenues views, while restricting the use of forecasting to organizations that really need it. In the global forecast scenario, you only need one forecast. Overlay sales organizations still have access to the information they need without having to make copies of the database on a weekly or monthly basis.

Minimize the Number of Aggregation Levels

Consider whether you can decrease the number of aggregation levels. The more aggregation levels that you define when creating a forecast series, the greater the impact on performance.