How should I structure my forecasting process?

Intelligence360 is a flexible forecasting tool that supports many different forecasting processes, but we do have a recommended approach. This approach is one we've seen used to great success in creating repeatable and accurate forecasts for teams.

First, lets talk about the high level concepts in forecasting

Segments

A segment is a part of your business that you forecast independently from other parts of your business, and you need a separate number for. You should independently set quotas for your segments.

Ex. New Business and Renewal are very common business segments

Ex. Recurring and Non-recurring are very common business segments

You can see how the segments are different enough, that you'd set separate goals against each one.

Types

Forecast types drive the forecasting process. Here's a good article from Forrester. Companies typically pick the "types" based on the numbers they want to be able to report to their board

• Commit means that, based on the seller’s best estimates, the sales process will complete by the close date reflected.

• Best-case means the sales process may complete by the close date, given an ideal set of circumstances that the seller documents and shares during forecast meetings.

• Judgement/Call means, based on the seller's best estimates, what they think they will actually close within the period.

There are other names for types that you might use or hear

• Less Likely vs. Best Case

• More Likely vs. Commit

Or

• Upside vs Best Case

Or

• Manager Call vs. Judgement

The general intent of these different names is the same. What am I very confident will happen, what might happen, where do I think I'll actually end up (usually in between commit + best case) are the most common.

YOU DON'T HAVE TO DO ALL OF THESE!

Some companies roll up just the commit, or just the judgment number. You know what you need for your board, and InsightSquared can support that.

Now let's drill in:

Commit (Opportunity Supported + Adjustment)

• This should include all your won opportunities, and opportunities you think you will win with a high likelihood. In a review, you'll be testing your exec sponsors, ensuring there's highly qualified budget, and reviewing a strong use case and proposal. DE-RISK YOUR COMMIT!

  • Forecast accuracy and coaching for commit deals:

    • Did you close the deals you thought you were going to?

    • Did you make the number you committed to?

Best Case (Opportunity Supported + Adjustment)

• This should include only deals you think you might win, but haven't won yet, and aren't in your commit. In a review, managers should be looking to drive to reaching an exec sponsor, highly qualified budget, and a strong use case. COACH COACH COACH your best case!

  • Forecast accuracy and coaching for best case:

    • How much of your best case did you end up closing?

    • Did that allow you to exceed your commit, or just reach it? Why?

NOTE: Some teams think about best case as including everything in Commit, this is possible in IS2, but not recommended as it puts more of a data entry burden on reps. We recommend adding best case to commit to achieve the same result.

Judgement (Adjustment only)

• This would typically only be an adjustment, having the rep evaluate their whole pipeline for what they think they will actually hit as a number, independent of the opportunities they have.

  • Forecast accuracy and coaching for judgement

    • Did you make the number you thought you would? How far off were you? Why?

As your teams complete the forecast, you are now producing data through your hierarchy.

Reps: They are tagging deals as commit/best case

Managers: They are rolling up and assessing the quality of their reps commit and best case, and coaching reps against the criteria/process

CRO/Leaders: Now you have bottoms up guidance on whether your team is going to make the corporate goals, whether those goals are supported by high quality pipeline, measurement of whether you are on track for the period to date, and lots of data to manage to.

This approach can produce accurate and repeatable forecasts for your team.