The Impact of Forecasting Improvement on Return on Shareholder Value
Joh T. Mentzer; Journal of Business Forecasting

Improving Salesforce Forecasting
Mark A. Moon and John T. Mentzer; Journal of Business Forecasting

Benchmarking Sales Forecasting Management
John T. Mentzer, Carol C. Bienstock, and Kenneth B. Kahn; Business Horizons

Seven Keys to Better Forecasting - Webinar with Dr. Mentzer,
March 16, 2005

5th Annual World Class Sales and Forecasting Management Conference,
May 10-12, 2005

Technology Ventures 2005,
May 18-20, 2005

• Incorporates and manages key inputs from all relevant data sources,
• Enables different functions and users to see data from their perspective,
• Manages information in an internally consistent framework,
• Provides transparency across functional silos,
• Uses Enterprise Enabled Excel which combines the flexibility of Excel with the power of an Enterprise Application,
• Enables management by exception,
• Provides right-time data – any time,
• Supports executive management by providing dashboards and scorecards with powerful drill-down capabilities,
• Enables plans to be analyzed and updated in minutes, not days or weeks,
• Enables users to do ad-hoc analysis or create scenarios, and
• Is designed to support any business process - instead of building business processes around the system.

If the perceived business value is low and the analysis is simple, i.e., does not require complex data collection, and/or is done infrequently, then doing the analysis in Excel may suffice. However, if the business complexity is high, then a more thorough cost/benefit analysis can be undertaken to see if it makes sense to do this analysis at all, or use Excel or other tools with simplified assumptions.

If the perceived business value is high, then using a more sophisticated planning system is warranted. With low business complexity – particularly with regards to simple analytics – then upgrading existing systems may do the job. However, with increasing business complexity, a more specialized tool, like a next-generation Demand Forecasting and Planning system can be a good investment. The next section outlines symptoms that point toward the need for a more advanced planning system.

• Shorter planning cycles – moving from quarterly to monthly planning cycles.
• More agile planning process that would allow for frequent updates and quick turnaround time.
• Improve forecast system to incorporate (1) sales funnel data and (2) dynamically changing product configurations.
• Better visibility into the planning process – at all levels including executive management.
• Exception alerts triggered when forecasts, sales opportunities, actual shipments or backlogs change.
• Effectively include sales and finance in the planning process.
• Better performance measurement.

• Happier customers.
• Over $500K in reduced annual inventory costs – of which all went to the bottom line.
• Over $5 million per year in increased revenue, of which 10% went to the bottom line.
• As a result the company recorded an additional $1 million in increased profits, or a 2% increase in profit margin.
• Their investment in a next-generation Forecasting and Planning system paid for itself within a few months.

• Can the company dramatically improve performance through organizational alignment?
• Would improvements in fill rates bring competitive advantages?
• Do excess inventory costs have a significant impact on the bottom line?
• Is current staffing level required to support manual spreadsheet manipulations and processing too high?
• In comparing different solutions, what issues do different solutions address, and how do they solve them?
• What are the perceived risks and costs of new system implementation versus upgrading?