Download - Better Way to Develop Business Forecasts
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A BETTER WAY TO DEVELOPBUSINESS FORECASTS
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of forecast to PLAN FOR ITS FUTUREEvery business relies on some form
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But most of the times
Sometimes forecasts are accurate THEY ARE NOT
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But Consistently they are:
TIME CONSUMING
HARD TO DEVELOP
RESOURCE INTENSE
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Days, weeks and sometimes months planning their long range forecasts
COMPANIES SPEND
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UNFORTUNATELY!!!No book, class or training course teaches
how to forecast properly
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Managers develop their own forecasting methodologies
AS RESULT
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INCONSISTENT AND NON REPEATABLE FORECASTS ACROSS THE ORGANIZATION
LEADING TO
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They spend days trying to:
Justify underlying assumptions
Roll up all their forecasts
Rationalize the overall final number
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THIS TAKES AWAY TIME FROM Actual planning and execution to just developing
revenue numbers
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FORECASTINGDOES NOT NEED TO BETHIS DIFFICULT
NOT ANYMORE!!
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With a logically structured forecasting methodology and smart quantitative tools, companies can develop more
ACCURATE, REPEATABLE and RELIABLEforecasts in minutes
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?SHOULD FORECASTS BE DEVELOPED?
SO HOW!!
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Finance and Management
Factory operations
Product Management
Sales
BUSINESS FORECAST
First, get the right parties at the table
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Finance and Management
Factory operations
Product Management
Sales
BUSINESS FORECAST
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Then get top management’s financial targets and expected market conditions
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DATA BASED BASELINE REVENUE FORECAST
$300
$250
$200
$150
$100
$50
$02011 2012 2013 2014 2015 2016 2017 2018 2019 2020
82,0%
81,0%
80,0%
79,0%
78,0%
77,0%
76,0%
Actuals Forecast
Use these estimates and data on historical performance to develop a baseline forecast
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Finance + Management
Factory operations
Product Management
Sales
BUSINESS FORECAST
Then utilize sales feedback to account for potential new, existing or lost business
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UTILIZE A SIMPLE SALES PIPELINE TOOL TO CAPTURE SALES INPUTS
Part Number Customer Industry IndustryPeak Expected Annual Volume
Expected Price ($per unit) Probability Status Expected Start
Project Lifetime
AZ349C-52 Precision Microelectronics Technology / Semiconductors AlphaDigi Life Extension 1,900,00 1,42 High Proposal Jan 2016 3
AZ349C-52 Argo Chemical Industrial Chemicals Argo Fertilizer Plant 234,00 1,42 Medium Proposal Jan 2016 3
AZ349C-52 Otis Appliances Industrial Argo Fertilizer Plant 2 1,234,00 1,72 Medium Samples Jan 2016 3
AZ349C-52 DynaRob Military / Robotics Extended Battlefield Robot - 13,100,00 0,92 High Proposal Jan 2016 3
AZ349C-52 Precision Microelectronics Technology / Semiconductors AlphaDigi Life Extension 19,00,00 1,42 High Proposal Jan 2016 3
AZ349C-52 Precision Microelectronics Technology / Semiconductors AlphaDigi Life Extension 19,00,00 1,42 High Proposal Jan 2016 3
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Calculate total expected revenue of all opportunities in the pipeline and expected time frame
Total value of revenue from expected new
opportunities
Expected total revenue
• Probability of success • Time into future • Sales success rate • Typical product ramp up rate
WEIGHTED FACTORS
REVENUE CALCULATION
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Finance + Management
Factory operations
Product Management
Sales
BUSINESS FORECAST
Then include product management inputs about new, upcoming or soon to be obsoleted products
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Product Extension
DeclineMaturityGrowthIntroduction
Sale
s Calculate potential revenue from upcoming new products and planned obsolete products based on historical ramp up and down curves
REVENUE PER PRODUCT LIFECYCLE STAGE
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Finance + Management
Factory operations
Product Management
Sales
BUSINESS FORECAST
Finally, include factory inputs to ensure manufacturing capacity is capable of supporting the expected total revenue
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Adjust total revenue based on factory’s feedback on available capacity to support upcoming demand
CAPACITY ANALYSIS
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IS EASIER SAID THEN DONEGood comprehensive approach
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MULTIPLE EXCEL FILESCollaboration with
is not the best way
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MANAGERS NEED A RELIABLE COLLABORATIVE PLATFORM to easily and quickly gather inputs from all parties and quantitatively analyze data to
develop an overall forecast
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Finance + Management
Factory Product Management
Sales
KEY STAKEHOLDER INPUTS
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SMART DATA ANALYSIS
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EASY INTUITIVE MANAGEMENT DASHBOARD
A single dashboard to develop business forecasts in minutes
SMART DATA ANALYSIS ENGINE
SALES PIPELINE MANAGER
PRODUCT LIFECYCLE MANAGER
FACTORY THROUGHPUT MANAGER
A COMPLETE BUSINESS FORECASTING PLATFORM
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NO MORE CONFUSION WITH MULTIPLE SPREADSHEETS
AN EASY WAY FOR ALL KEY STAKEHOLDERS TO COLLABORATE
SINGLE SOURCE OF TRUSTWORTHY DATA
SMART DATA ANALYSIS FOR FACT BASED FORECASTING
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