Will your company achieveitstargets? How will your business develop? Are relevant changes to be expected?
These are key questions insales controlling. Theforecast helpsyou to answer them. Properly structured and implemented on the basis of data, you can recognize deviations from targets at an early stage and take countermeasures. Your sales department does not need a crystal ball to look into the future, buta transparent, data-supported basis for analysis, for example CRM software with reporting and forecasting functions. How does forecasting work and what needs to be considered? Find out more here and how you can motivate your team to centrally provide the required data in the required quality.
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An important part of sales management is the correct handling of trends and external influences. Misjudging future developments can have serious consequences for a company. However, since no human being can predict the future, you need the most reliable automated tools possible, such as CRM software, to help you with this.
What is forecasting?
Forecasts are required in various areas of the economy. In business administration, the short definition is something like this:
A controlling tool that helps you to estimate whether you will achieve your targets. The forecast looks at short, medium and long-term targets. It is used by business and sales management and enables precise sales management.
The basic purpose of a forecast is to evaluate certain parameters and data in such a way that aforecast for the future can be derivedfrom them. This involves acomparison of target and actual values. Although a simple estimate can also be created without structured data from the historical development of the company, "on instinct" so to speak, it is only withintelligent digital tools that you areable to evaluate various data and includeexternal influences such as trends, seasonality or economic developments.
For these reasons, forecasting is very important in many companies. The more data and factors the sales team includes in the forecast, the more reliable the forecast will be. Motivate your sales team, for example by using a CRM app, to provide new data and more details ad hoc - even on the go.
Different forecast variants at a glance
Forecasting intervals can be defined in very different ways; every company needs to find its own rhythm. In any case, regularity is crucial in order to recognise changes in certain periods. Especially when important decisions are to be made, it makes sense to analyse over longer periods of time.
What forecasting methods are there?
Inquantitative forecasting,the more data available, the better the forecast. Both individual internal and external data and standardized mathematical formulas, from which certain interest values are determined, serve as the basis.
If little or no data from the past is available,qualitative forecasts can be used. These collect data from surveys, market studies or subjective assessments by experts, among other sources, which is why they are less accurate and time-consuming. However, they are well suited as a basis for developing new products, where the needs and opinions of customers play an important role.
What technical factors influence forecasts?
In order for forecasts to be meaningful for a company and to help with planning, the following points should be taken into account:
1. Datensätze
Wie schon erwähnt gilt: Je mehr Daten eingespeist werden, desto aussagekräftiger wird ein Forecast. Wichtig ist zum einen der Vergleichsdatensatz aus historischen Daten, um neue Daten richtig interpretieren zu können. Zum anderen sind es erhobene Daten zu Werttreibern (wie Umsätze, Erträge, Bilanzen, technologische Innovationen, Image des Unternehmens, Marken, Kundenbeziehungen, Auftragsbestand oder Referenzen) und Effekten (wie Saisonalität oder Markt-Trends). Wollen Sie Effekte einbeziehen, müssen Sie entsprechende Zahlen aus externen Quellen einfließen lassen.
Die Detailtiefe der Daten-Sammlung hat Einfluss auf die Effizienz der Auswertung. Eine CRM-Software gibt Ihrem Team einen zentrale „Ort“ um Daten zu sammeln sowie zu detaillieren und hilft Ihnen daraus wichtige Kennzahlen zu identifizieren.
2. Automatisierung
Unternehmensdaten und Verkaufschancen sind im CRM-System bereits vorhanden. Daraus resultierende automatisierte Forecasts bieten Unternehmen große Arbeitserleichterung, da das Datensammeln aus diversen Tabellen entfällt. Mit entsprechender Software werden also Zeit und Ressourcen gespart, Fehler minimiert und der Forecast steht jederzeit zur Verfügung.
Wie kommen aussagekräftige Daten in unseren Forecast?
Ihr Vertriebsteam bekommt und erarbeitet täglich viele Informationen. Geben Sie ihm ein CRM-System an die Hand, das den gesamten Prozess von der Leaderstellung über die Verkaufschance bis zum Verkauf unterstützt. Denn damit stehen Ihnen automatisch alle eingepflegten Daten für Prognosen zur Verfügung. Ein Cloud-CRM oder eine CRM-App motivieren Informationen gleich nach Erhalt, auch von unterwegs, ins CRM-System aufzunehmen. Win/Win!
In addition, digital systems cover different scenarios and data consistency is more reliable than with human information processing. Once set up, software automatically creates the desired reports on the dates you specify.
3. artificial intelligence / machine learning (ML)
AI can help to increase the quality of yourforecasts. In particular, typical human errors or inadequacies can be eliminated, such as
- Overly optimistic forecasts due to overestimation
- ignoring more distant problems and the associated negative developments
- Forecast distortions due to deliberate disinformation (due to hierarchy/power) or unconscious misinformation (knowledge that exists in the heads of employees and/or is distributed at various locations)
By organizing data from different sources in a central database, machine learning methods such as time series, gradient boosting, neural networks and pattern recognition can be used to create forecasts.
How does a forecast work? From theory to practice
If you want to create forecasts, there are various ways to do this. Subjective experience and manual evaluations are the simplest form of a forecast, usually in the form of an Excel spreadsheet. This makes perfect sense for small businesses. However, it is difficult to get to grips with large amounts of data in this way.
A good way to create reliable forecasts is to useCRM software withappropriate functions, such as that from GEDYS IntraWare. Here, all valuable data is collected centrally, and evaluation and analysis can be implemented with the help of developed algorithms. If you store your targets by product, sales employee and territory, everyone involved has an immediate overview of the current status and can identify any differences from the target.
The data stored centrally in the CRM system, which can be analyzed for your sales team, includes
- Company and contact data
- Historical operating data
- Product interests and opportunities
- Purchased products and cross-sale options
- Licenses and user numbers
- Ratings of products and services
- Service data, e.g. from ticket management
- Cost/benefit comparisons
- and many more
What is the difference between forecasting and planning?
A forecast serves as an outlook into the future and has a strong influence on the operational direction of your company. Measures to achieve targets are not part of forecasting but fall under planning. If a forecast depicts future developments, planning can react to them.
Two simple examples to illustrate this: weather and school cones
Suppose you are planning your birthday party in the summer. Due to the time of year, you are assuming a party with sunshine and warm temperatures. However, if the weather forecast shows deviations - in the form of rain, for example - you can react early andplan to put up a tent. Just like a company forecast, a reliable weather forecast is based on a solid database.
Another example: As a manufacturer of school cones, you could easily plan years in advance, because school enrollments in Germany take place at the same time every year (fall). The more pupils there are in each year group, the more bags you could theoretically sell. But what would happen if school bags went out of fashion or a competitor offered more attractivebags? Forecasts alert you to such problems and enable you to plan accordingly - for example, introducing new products or marketing measures at the right time.
Conclusion: use a CRM system with forecasting in your company
CRM software with forecasting functions offersevaluations based on data-supported analyses. Automatically generated forecast reports and dashboards are transparently available to everyone. This means you don't use valuable resources for manual evaluation, but invest them sensibly in forecast-based planning and ensure your businesssuccess.
Sources:
Whitepaper Best Practice Digital Forecast - Upheaval in planning, reporting and forecasting | Prof. Dr. Claus W. Gerberich (05/2019)
Possible applications and limits of automated forecasts | News from the Digitization Center | FH Upper Austria Faculty of Business and Management (06/2021)
https://www.haufe.de/controlling/controllerpraxis/forecast-controlling/methoden-des-forecast-controlling_112_453404.html
https://www.controlling-wiki.com/de/index.php/Forecasting
https://de.wikipedia.org/wiki/Prognose
