24Forecasting

This chapter contains the following:

Your sales organization can forecast opportunities by sales territory for each forecasting period and managers can adjust those forecasts as required. There are two broad forecasting scenarios that require different setup:

  • Scenario 1: Forecasting by Opportunity Owner

  • Scenario 2: Forecasting When You Use Sales Territories to Assign Opportunities

Scenario 1: Forecasting by Opportunity Owner

Individual salespeople own their opportunities and forecast them. The forecasts are passed up the management hierarchy for adjustment and approval. Your organization doesn't use geography, product, industry, or other territory dimensions to assign salespeople to opportunities. If your sales process meets these criteria, then setup is as simple as selecting Yes for Enable Sales Forecasting in Setup Assistant. The application sets up everything you need:

  • Sets up a sales territory hierarchy that mirrors your sales resource hierarchy, with the individual salespeople as territory owners.

  • Assigns opportunities to the territory of their owners. This means that opportunity revenue is automatically included in the forecasts of the opportunity owner.

    When new accounts or opportunities come in, managers assign ownership to one of their salespeople and the application automatically includes those accounts and opportunities in each owner's territory.

  • Keeps the sales territories in sync if your resource hierarchy changes.

    If you do update the sales hierarchy and want to see the changes reflected in your forecasts right away, then you must run the Refresh Territories from Resources process. The process is set to automatically run before each forecasting window freeze.

  • Rolls up forecasts up the sales resource hierarchy.

  • Enables quarterly forecasts.

  • Creates monthly forecast submission windows, so the sales organization can adjust forecasts and pass them up the management chain. All you have to do is adjust the forecast submission window dates.

  • Makes it possible for your sales organization to forecast product totals.

If you enable forecasting by opportunity owner in Setup Assistant, then each resource can only be in one territory (their own) and you can't use sales territories to assign opportunities by geography, product, industry, or any other dimension.

Scenario 2: Forecasting When You Use Sales Territories to Assign Opportunities

You assign opportunities to sales territories by geography, product, industry, and other dimensions. You may have multiple salespeople from different parts of the sales organization involved in the sale. The opportunity owner is not necessarily the sole person forecasting the revenue. If your implementation meets any of these criteria, then you must set up sales territories and enable assignment using the Set Forecasting Options task. You can't use Setup Assistant.

Setup Overview

Here are the steps for setting up forecasting for the two forecasting scenarios. You can open these from the Sales offering in the Setup and Maintenance work area.

Step Description Navigation Where to Get More Details

1

If your implementation fits the second scenario (you use sales territories for assignment), you enable Forecasting by clicking Submit on the Select Forecasting Options page.

Setup and Maintenance > Sales > Sales Forecasting > Select Forecasting Options

See the topic: Enable Forecasting If You Use Sales Territories for Assignment

2

Enabling Forecasting using either method creates quarterly forecasts for the next year and monthly forecast submission windows for each.

The forecast submission windows are created automatically, without accounting for the different number of days in each month, weekends, or holidays. For these reasons, you may need to adjust the starting and ending dates of each window to conform to your company's schedule.

Setup and Maintenance > Sales > Sales Forecasting > Select Forecasting Options

See the topic: Adjust Forecasting Windows and Set Forecasting Options

3

You can change other forecasting options on the same page:

  • Increase the number of quarters you can forecast at the same time.

  • Specify criteria for including opportunities in the forecast.

  • Set the number of levels of the sales catalog hierarchy managers can adjust forecasts by product revenue.

  • Display a different chart on the Forecasts landing page.

  • Hide the Products tab on the forecast page to disable forecast adjustments by products.

Setup and Maintenance > Sales > Sales Forecasting > Select Forecasting Options

See the topic: Adjust Forecasting Windows and Set Forecasting Options

4

If you didn't hide the Products tab, permitting sales managers to adjust forecasts by product, then you should specify what kinds of adjustment types the managers can make.

You don't want sales managers entering their best case forecasts, if the VP of sales isn't interested, for example.

Hide the unused forecasts adjustment types by editing the ORA_ZSF_SHOW_METRICS lookup type.

Setup and Maintenance > Sales > Sales Foundation > Manage Standard Lookups

See the topic: Specify the Types of Forecast Adjustments Sales Managers Can Use

How Forecasting Works and How You Can Change It

Your sales organization can start forecasting as soon as you enable forecasting using any of the available methods: the Sales Setup Assistant, the Quick Setup page, or the Select Forecasting Options task. The application automatically creates all you need to get started:

  • Quarterly forecasts for each sales territory for one year.

    Each quarterly forecast automatically includes all won opportunities and all opportunities with a win probability greater than 70 percent with close dates that fall within the quarter. Lost opportunities are never included in forecasts.

  • Monthly forecast submission windows.

    During each forecast submission window, salespeople and their management adjust their forecasts and submit them up the management hierarchy.

How It Works

Sometimes forecasting sales isn't much better than gazing into a crystal ball. Forecasting depends on the accuracy of your pipeline data, and that's a problem. Sales prospects often lie about what they want to purchase to gain a better bargaining position. Salespeople get lazy about entering deals or they withhold information because they're scared others will steal their hot prospects. Your sales application can't make anyone truthful, but it does provide a structured process that encourages salespeople to enter what they know, and holds them accountable. Each month, salespeople submit their quarterly forecasts to their managers. The managers review the forecasts, adjust the forecast amounts, if necessary, and submit them up the management chain. Your organization gets a historical record of the monthly forecasts that lets you evaluate how well you're doing. Here's how the process works as delivered:

  1. Salespeople review their pipeline and their forecasts.

    The Forecasts work area displays a dashboard with a summary of revenue forecasts by territory and quarter. The forecasts are compiled automatically from all won opportunities with close dates in the quarter, and those with 70 percent or greater win probability. Salespeople choose the territory they want to view (callout 1 in the screenshot). A bar chart shows the amounts for the forecasts, won revenue, and open pipeline (callout 2). By default, a second summary chart displays a bar chart that shows forecasts by time period. If you use quotas, you can instead display a visual indicator showing in percentage of quota attainment with a numeric summary (callout 3). The page also indicates if the forecast is submitted, how it was changed, and how much pipeline remains to be submitted.

    Screen capture of the Forecasts page showing a
sample forecast for a quarter.
  2. Salespeople can review the list of opportunities included in the forecast and drill down to edit the opportunities. Their changes are automatically reflected in the forecast by the Refresh Forecast process.

    Here's a screenshot of the Review Sales Forecast page. The page summarizes the forecast amounts, the forecast window dates, won revenue, and open pipeline.

     Review Sales Forecast page with sample data for
the salesperson's territory
  3. While editing opportunities, salespeople can manually exclude or include opportunities from the forecast by altering the win probability and the close date.

  4. Each month includes a monthly forecast submission window. The submission windows typically start after a monthly sales call. During the monthly submission window, territory changes are frozen, and salespeople can submit their forecasts for review by their managers.

  5. When they review forecasts, managers see a dashboard that's very similar to what salespeople see. The dashboard summarizes the forecast revenue for the quarter, and makes it possible to compare the forecast with won revenue and the pipeline. But, instead of summarizing individual opportunities for the quarter, the manager dashboard summarizes the forecasts of all the territories in the territory hierarchy below the territory the manager selected. Managers can view at a glance which subordinates submitted their forecasts and the trend of the latest updates.

    Here's a screenshot of the forecast detail managers see. The highlighted table lists the forecasts for the territories under the manager's territory in the sales territory hierarchy.

    Screenshot of the Forecast page showing the Territories
tab. The image highlights the table listing forecasts for child territories.
  6. Managers can drill down into their subordinates' forecasts to see the details. After their subordinates submit their forecasts, managers can adjust them, and submit their own forecast up the management hierarchy. Sometimes managers know a deal is coming that a salesperson hasn't entered properly, so adjusting forecasts gives those higher up in the management chain a more accurate picture of what's happening in the pipeline. Managers can adjust the individual opportunities on the Forecast Items tab, or they can make adjustments by products (Products tab).

    There are multiple ways available for managers to adjust their forecasts. They can adjust the forecast amounts or change the product quantities. And they can enter their best-case and worst-case forecast estimates.

    Managers can drill down into forecasts to see who adjusted what and when. The changes in forecasts are also indicated by icons. Hovering over an icon displays details about the change. Here's a screenshot of a portion of a forecast. An up arrow indicates the forecast has increased since the last time the forecast was submitted. Hovering on the icon displays the details.

    Details of a forecast page showing forecast changes
for the quarter. In this example, the forecast is for Q3-2019. It
shows a current forecast of $2,390,000 with a previous forecast of
$0, and a forecast change of $2,390,000.

About Forecast Submission Windows and How You Adjust Them

By default, the application automatically generates the quarterly forecast periods and forecast submission windows for each month for one year.

  • Each quarterly forecast starts on the Start Date and ends on the End Date.

  • There are nine rows in the table. Each row represents a monthly forecast submission window.

  • There are three monthly forecast submission windows for each quarter.

  • Each forecast submission window starts on the Territory Freeze Date and ends on the Due Date.

    During the submission window, salespeople and managers get to submit and adjust their forecasts. The application continues to update the forecasts automatically if new opportunities meet the inclusion criteria you set. The application doesn't allow any territory changes during the submission window.

The application uses the default parameters entered in the Forecast Period Parameters region of the Select Forecasting Options page to generate the windows. By default, each submission window starts on the first day of the month and ends on the last day of the month. Salespeople and managers can submit their forecasts at any time.

Here's a sample schedule of the quarterly forecasts and submission windows the application generates:

Forecast Name Start Date End Date Territory Freeze Date Due Date

Q2-2019 -2019/04/30

4/1/2019

6/30/2019

4/1/2019

4/30/2019

Q2-2019 -2019/05/31

4/1/2019

6/30/2019

5/1/2019

5/31/2019

Q2-2019 -2019/06/30

4/1/2019

6/30/2019

6/1/2019

6/30/2019

Q3-2019 -2019/07/31

7/1/2019

9/30/2019

7/1/2019

7/31/2019

Q3-2019 -2019/08/31

7/1/2019

9/30/2019

8/1/2019

8/31/2019

Q3-2019 -2019/09/30

7/1/2019

9/30/2019

9/1/2019

9/30/2019

Q4-2019 -10/31/2019

10/1/2019

12/31/2019

10/1/2019

10/31/2019

Q4-2019 -11/30/2019

10/1/2019

12/31/2019

11/1/2019

11/30/2019

Q4-2019 -12/31/2019

10/1/2019

12/31/2019

12/1/2019

12/31/2019

The application automatically generates new submission windows at the end of each quarter, so there's always a year's worth of submission windows. Your organization can modify the start and end dates of each submission window by entering new dates in the Territory Freeze Date and Due Date fields. If you do adjust the dates, then you must continue to adjust these dates as the new quarters get generated.

Here's how forecasting works before each territory freeze date:

  • The application compiles the forecast from opportunities that meet the forecast criteria.

  • Salespeople and managers can't submit their forecasts or adjust them. All changes are made by editing the opportunities themselves.

  • Changes to the territory and sales catalog product hierarchy are automatically synchronized to the forecast.

  • Salespeople and managers can change the opportunity lines and the changes are automatically reflected in the forecasts.

Here's what happens after each freeze date:

  • Salespeople and managers can edit, adjust, and submit forecasts for review up the management chain.

  • Territories are frozen. Any changes to territories and product hierarchy aren't reflected in the forecasts.

  • Changes to revenue items are synchronized to forecast items.

  • Salespeople can adjust and submit their forecast between the Territory Freeze Date and the Due Date.

After salespeople submit their forecasts, their managers can review and adjust them. Salespeople can change and resubmit their forecasts until managers submit theirs. After the due date is reached, each forecast becomes read-only and can't be adjusted any more.

How You Change How Many Quarters You Can Forecast At the Same Time

By default, you can only forecast one quarter at a time. However, you can forecast two or three quarters at the same time. Just enter a 2 or a 3 in the Number of Concurrent Forecasts field in the Forecast Period Parameters section of the Select Forecasting Options page and regenerate the forecast submission windows.

How You Can Change What's Included in Forecasts

By default, the application automatically includes in each forecast all won opportunities and opportunities with a win probability greater than or equal to 70 percent with close dates that fall within the forecast period. Only sales territories that have the Forecast Participation attribute set to revenue can participate in forecasts.

What You Can Change How

Change the win probability required to automatically include an opportunity in the forecast.

On the Select Forecasting Options page, Unadjusted Forecast Criteria section, specify a different probability.

You can let salespeople override the automatic criteria and decide what opportunities to include in forecasts.

On the Select Forecasting Options page, Unadjusted Forecast Criteria section, select the Enable Forecast Criteria Override option in the Select Forecasting Options page, Unadjusted Forecast Criteria section.

Prevent opportunities from getting left out of forecasts when salespeople forget to enter a close date and win probability.

You can set up your sales method to ensure that opportunities aren't left out because of incomplete data entries. For example, you can make entries in the Win Probability and Close Date fields required for the later stages of the sales process and you can have the application automatically prefill the win probabilities themselves when salespeople move an opportunity to a particular sales stage.

You can also set up your sales method so that a particular sales stage defaults a win probability that

Make sure that an opportunity at a particular sales stage gets included in forecasts.

When setting up your sales method, you can specify a default win probability. By entering a default of 70 percent for opportunities in the Agreement sales stage, for example, you ensure that all opportunities in the Agreement stage are included unless sales representatives change the win probability manually.

You can enable forecasting on individual line items separately.

By default, the win probability and close date are set for the whole opportunity. To forecast individual revenue lines, you can expose the Win Probability field for the lines in the Edit Opportunity page using Application Composer. See the Implementing Sales guide for details on this and other advanced features.

Forecast Adjustment Options

By default, managers can adjust the submitted forecast revenue by opportunities on the Forecast Items tab and by products on the Products tab of the Edit Forecast page. Adjustments on the Products tab are especially handy when sales managers want to forecast products that aren't yet entered as part of an opportunity.

  • You can specify the level of granularity for the product adjustments. For example, you can enable adjustments just for broad groups of products, or down to the individual product. By default, the application enables adjustments two levels down from the sales catalog root. The adjustments that managers make are visible to their own managers after they submit the forecasts.

    Here's a screenshot of the Products tab on the Edit Forecast page. The page shows a sample sales catalog hierarchy, which extends four-levels down to the individual product. Callout 1 highlights a product forecast line selected for adjustment.

    Screen capture of the Edit Forecast page Products
tab showing a sample sales catalog hierarchy, which extends four-levels
down to the individual product
  • If you don't want managers to adjust forecasts by products, you can remove the tab entirely by deselecting the Enable Product Totals option in the Product Tab section of the Select Forecasting Options page.

Enable Forecasting If You Use Sales Territories for Assignment

Here's how to enable forecasting if you set up sales territories to assign opportunities by geography, product, or other dimensions.

  1. In the Setup and Maintenance work area, go to the following:

    • Offering: Sales

    • Functional Area: Forecasting

    • Task: Select Forecasting Options

  2. Select Enable Forecasting.

  3. Click Submit.

    The application runs a background process to generate your forecast windows and forecasts using the application's default option settings. The application generates quarterly forecasts for one year with a forecast submission window each month. After the process completes, your sales organization can start reviewing your forecasts right away. You can also change the forecasting defaults on the Select Forecasting Options page.

Overview of the Sales Forecasting Options Page

The Select Forecasting Options page is the Swiss Army knife in your forecasting setup, so it's worth getting an overview of the tools at your disposal. Here's an overview of the different page sections and what you can use them for.

Section Name Overview

Forecast Period Parameters

The application generates the forecast submission windows using the default parameters entered in this section when you enable forecasting and at the end of every quarter.

The generated submission windows are displayed in the Scheduled Forecasts section where you can adjust them to conform with your actual forecasting schedule.

The automatically generated submission windows are approximations only, so you must adjust the dates manually. You can also enter different parameters to generate entirely different set of submission windows.

Unadjusted Forecast Criteria

Here you specify the win probability the application uses to determine which opportunities to include in the forecast. You can also permit salespeople to include any opportunity they want.

Product Tab

Selecting the Enable Product Totals displays the Products tab on the Edit Forecasts page. Sales managers use the tab to adjust forecasts by product group rather than by territories. Deselect Enable Product Totals to enable adjustments by territories only.

Metrics

All forecasting metrics are enabled automatically, but you can use this section to change what chart is displayed in the Forecasts landing page. If you want to enable the display of the chart comparing forecasts to quotas, select the Quota option and disable the Enable Forecast Trend Graph option in Additional Settings. You can ignore the other options. They aren't used any more.

Additional Settings

Use this section to enable the forecast trend graph as the second chart on the Forecasts landing page, and to make it possible for managers to enter notes about their forecast adjustments.

Scheduled Forecasts

The application displays the generated forecast submission windows in this section. You must manually adjust the dates of each submission window.

Adjust Forecasting Windows and Set Forecasting Options

After you enable forecasting, you can adjust the monthly forecast submission windows the application generated, change the criteria for including opportunities in forecasts, and set other forecasting options.

  1. Open the task Select Forecasting Options from the Setup and Maintenance work area:

    • Offering: Sales

    • Functional Area: Sales Forecasting

    • Task: Select Forecasting Options

Adjust the Forecast Submission Windows

The application generates the monthly forecast submission windows using the parameters specified in the Scheduled Forecasts section.

  1. Review and adjust the monthly forecast submission windows the application generated in the Scheduled Forecasts section of the page. Each window starts on the Territory Freeze Date and ends on the Due Date.

  2. If you want to specify a different set of forecasting periods or want to forecast more than one quarter at a time, you can enter different parameters in the Forecast Period Parameters section. You must then regenerate the scheduled forecasts and submission windows by clicking Submit. Here's an explanation of the fields in this section:

    Field Explanation Provided and Suggested Values

    Forecast Period

    Typically a quarter. Each forecast includes only those opportunities set to close in the forecast period.

    Quarter

    Adjustment Period

    This read-only field displays the type of period you selected when you set up your accounting calendar. Typically, this is a month.

    You can't edit this field.

    Forecast Frequency

    Enter the number of submission windows you want to generate for each forecast period.

    Because you are holding a forecasting call each month and there are three months in each quarter, the value is 3.

    First Forecast Due Date

    The date you want the first submission window to end relative to the forecast period. The application takes the forecast snapshot at the end of the day.

    The First Forecast Due Date has the default value of 31 and the After the forecast period start date option is selected. These settings create the first forecast submission window, which ends on the last day of the first month in each quarter.

    The application generates the subsequent submission windows based on the number of days you enter here and in the Territory Freeze Date field.

    First Territory Freeze Date

    The number of days before the end date when you want the submission window to start.

    Any sales territory changes after this freeze date are ignored and applied only to subsequent forecasting windows.

    For the forecast submission windows to start at the beginning of each month, the number provided is 31.

    Number of Concurrent Forecasts

    Specified how many quarters you can submit forecast for at the same time.

    The default value is 1, so by default, you can forecast only one quarter at a time.

    Entering a 2 or a 3, makes it possible for you to submit and adjust forecasts for two or three quarters every month.

    Number of Scheduled Periods

    The number of forecast periods you want to view.

    Managers can only adjust the forecast for the current period during the submission windows you generated, but you can view the forecasts for subsequent periods.

    The number of forecast periods is set to 4 (four quarters) for the whole year. You can change the number of forecast periods.

  3. If you modified forecast period options, then click Submit.

    The application runs a process to regenerate the forecasting periods and updates your forecasts. The Select Forecasting Options page is unavailable until the processes completes. When the process completes, the generated submission windows appear in the Scheduled Forecasts region.

  4. Click Submit when you are done.

  5. The application automatically generates new submission windows at the end of each quarter. You must continue to manually adjust these windows as they are generated.

Set Forecasting Criteria

The application includes in a quarterly forecast any opportunities that close within the quarter and match the forecast criteria you set in this section.

  1. By default, the application includes opportunities with a win probability greater than or equal to 70 percent. You can change the probability to include or exclude more opportunities. It's a good idea to specify a probability that matches the default probability of the appropriate sales stage in your sales method.

    Note: By default, the win probability is set at the opportunity level. To forecast at the level of individual revenue lines, you can expose the win probabilities for the lines in the Edit Opportunity page using Application Composer.
  2. Selecting the Enable Forecast Criteria Override option makes it possible for salespeople or their managers to include or exclude an opportunity from a forecast while editing regardless of its win probability. If you select the option, then salespeople can make a selection from the Include in Forecast list while editing an opportunity.

  3. Select the Enable nonrevenue forecasting option if you want to generate separate forecasts for overlay territories.

Specify the Granularity of Product Adjustments or Disable Adjustment by Product Entirely

By default, sales managers see the Products tab on the Forecasts page and can adjust forecasts by product. You can make these changes:

  • Specify number of sales catalog levels sales managers can adjust in the Product Hierarchy Depth field. By default, managers can adjust product groups up to two levels below the catalog root.

  • Hide the Products tab and disable adjustments by product entirely, by deselecting the Enable Product Totals option.

Change the Chart on the Landing Page and Turn on Adjustment Notes

The Forecasts landing page displays a Forecast Overview chart that compares your forecast with won revenue and open pipeline. It also displays a second bar chart that shows your forecast by time periods. You can replace the second chart with a chart comparing the forecast and quotas. You can also enable managers to add notes about their forecast adjustments.

  • To display the forecast to quota comparison chart instead of the forecast by time periods bar chart, make these selections:

    • In the Metrics section of the Select Forecasting Options page, select the Quota option.

    • In the Additional settings section, deselect the Enable Forecast Trend Graph option.

  • If you want to enable sales managers to add notes when they adjust forecasts, select the Enable Adjustment Notes option in the Additional Settings section. Sales managers can add adjustment notes for each forecast item. They can also create and edit a single adjustment note for summary territory adjustments or a note for summary product adjustments.

Specify the Types of Forecast Adjustments Sales Managers Can Use

Sales managers can adjust forecasts on the Products tab in a number of ways. They can adjust the revenue totals for products or groups of products, or they can adjust the product quantities, for example. A salesperson didn't get around to entering the potential sale of 20 Green Servers? No problem! The manager can add the servers to the forecast without creating an opportunity. Managers can also enter their best case and worst-case forecast scenarios. All of the adjustments and scenarios get passed up the management chain. You should decide which forecast adjustment types you want to use in your sales organization and disable the rest. There's no point for managers to enter the best-case or worst-case scenarios if their management doesn't view them.

Available Forecast Adjustment Types

Managers select the adjustment type they want to use from the Show list on the Product tab. Here are the available adjustment types:

  • Forecast

    Managers can adjust the revenue for products or product groups for each forecast submission window. And they can even enter revenue for products that aren't associated with any opportunities. These revenue adjustments get reflected in the forecast landing page charts.

  • Best Case

    Managers can use this forecast to enter their best-case scenario numbers. You can also make it possible for sales managers to view the best case or worst case forecast totals on the Forecasts landing page. You must expose the Best Case and Worst Case fields on the landing page layout using Application Composer. Some Oracle customers also write Groovy scripts to automatically enter the sum of submitted and potential sales.

  • Worst Case

    Managers can use this forecast to indicate their best case scenario numbers. A Groovy script you create could automatically enter the submitted opportunity numbers.

  • Quantity

    Makes it possible to forecast and adjust forecasts by product quantity. This is the only adjustment type not displayed in the list by default.

  • All Totals

    Displays a table summarizing the totals for all the different forecast adjustment types. Here managers can update the total revenue forecast for the quarter, rather than updating the individual monthly numbers on the Forecast selection.

Here's a screenshot of the Products tab highlighting the Show list:

Screenshot of the Products tab highlighting the
list of forecasts that show up in the Show list. The list is described
in the text.

Specify What Adjustment Types Managers Can Use

Here's how to specify which adjustment types sales managers can use:

  1. Open the task Manage Standard Lookups from the Setup and Maintenance work area:

    • Offering: Sales

    • Functional Area: Sales Foundation

    • Show: All Tasks

    • Task: Manage Standard Lookups

  2. On the Manage Standard Lookups page, search for the lookup type ORA_ZSF_SHOW_METRICS or the meaning Forecast metric options.

  3. Highlight the row containing this lookup type.

  4. In the Lookup Codes region, make sure Enabled is selected only for the forecast adjustments you want to use.

  5. Click Save and Close.