Sales forecasting is an essential process for most businesses.
Sales forecasting is an essential process for most businesses. It helps guide the efforts not only of the sales function but also of finance, operations, manufacturing and customer service. Our recently released sales forecasting benchmark research reveals significant insights and best practices that can help companies optimize the effectiveness of this process. I recently wrote that most sales organizations need to make significant changes to the way they do sales forecasting. In that analyst perspective, I examined aspects of technology that can make sales forecasting a much more efficient process than it is in most organizations that use software not designed for sales forecasting.
This research finds much indecision about making changes to improve the technology for sales forecasting. Half of organizations do not plan to change their vendor for sales forecasting in the next 12 to 18 months, and only 10 percent plan to change, although 8 percent will upgrade to the current vendor’s latest version. For organizations that are planning to change vendors, the most common reason is to speed up the forecasting process (54%); fully half of this group are not satisfied with their current product’s functionality. A substantial number of organizations are dissatisfied with their tools because data gets outdated quickly: One in four ranked this first. This discontent likely reflects the more rapid flow and greater volume of data organizations accumulate today and issues derived from the use of tools like spreadsheets into which people copy and paste data with no direct link to its sources. Yet the pace of business has accelerated along with the mass of data, and sales groups feel pressure to have timely forecasts; this challenge is another reason for improving the tools in use.
Organizations use desktop spreadsheets for many activities, and while they are easily accessible, spreadsheets are not designed for 
It is not surprising that fewer than one-quarter (24%) of the sales organizations primarily using spreadsheets for sales forecasting are satisfied with their process. Our analysis shows a correlation between spreadsheet use and lack of confidence in the information for sales forecasting: Fewer than one in three organizations relying primarily on spreadsheets (32%) are confident or very confident in the quality of their forecast. Moreover, more than half (59%) said that reliance on using spreadsheets makes it difficult to manage the sales forecast efficiently. Yet despite the evidence that spreadsheets have negative effects on sales forecasting, only 38 percent of heavy spreadsheet users are planning to change their forecasting process in the next 12 to 18 months, fewer than users of SFA (48%) and business intelligence tools (53%). When such an important process as the sales forecast is left to tools not designed for the process, risk increases that sales people will not have visibility into their information, let alone timely knowledge of progress and the source of issues that should be addressed.
On the other hand, the research finds that two in five (40%) organizations use dedicated tools for sales forecasting. Most that do are rather new to the technology; three in 10 have been using it for more than a year, and 10 percent more began in the last year. Currently dedicated sales forecasting software is deployed mostly to users on the front lines of sales: 42 percent of front-line sales managers and 41 percent of the front-line sales team have it available. Those that use dedicated sales forecasting technology find value in it: More than one-fifth (22%) of them said it has improved significantly the outcomes of sales activities and processes, and half (51%) indicated it has improved outcomes slightly. Larger organizations use such applications much more often than smaller ones: More than half (54%) of very large companies that use one have been doing so for more than a year, as have 46 percent of large companies. Another 29 percent of the very large started using a dedicated application in the last year, so nearly four out of five of this size of organization have dedicated software. But more than one-fifth of participants said they have no plans to deploy dedicated software. Asked why, most (58%) said they do not know, which indicates a lack of awareness of the technology and its advantages. One-fourth more (24%) said deploying it will not have a positive impact on business, which indicates a lack of understanding of its benefits. Dedicated applications can contribute to more accurate sales forecasts, but we find that many organizations aren’t prepared to implement them or do not understand why they should.
Our analysis finds good reasons for using dedicated technology. 
