1. Implementing Sales
  2. How Forecasting Works and How You Can Change It

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.