CRM On Demand Report - Are We Good At Predicting The Future?

Report # 3 - Are We Good at Predicting The Future?

(click here to return to the blog article - Three CRM Reports I Cannot Live Without)

Of the three reports we've discussed, this is the most complex, but once understood, provides amazing insight.  Some quick background. CRM On Demand takes a snapshot of our sales data on the 31st of every month - just like a camera takes a picture. Snap!  What we can do is view each snap shot to see how how the picture changes over time.  With that analogy in mind, the pipeline fiscal year and pipeline fiscal date tell us what day the "picture" was taken.  The expected revenue and closed revenue is the subject of the picture.

So the way to read the first line is like this:

On Janauary 31st of 2009 the sum total of our 2010 opportunties was $15,191.  (In Janaury of 2009 we clearly didn't have a lot of contracts on the books for 2010.)  As the year when on, that didn't change until June of 2009, when we identified more 2010 work and the total prediction for 2010 increased to 228,582.  In November it increased again.

As the year 2010 begins you can start to see actual 2010 business start to close while the predictions for the year continue to rise.  As you can see from this sample data, the total predicted value is still above the actual values when we arrive at the end of the year.  What does this mean - it means the forecasts are overly optimistic.  Only by first acknowledging how forecasts pan out against actual data can we being to acertain the quality of future forecasting.

Note: As the data makes clear, this data is redacted, but you get the gist, right?