I have always suspected that most sales forecasts contain a bit of optimism. That�s how companies miss the moment for layoffs, spiraling down into bankruptcy. It�s also how people like Dennis Koslowski and Andrew Fastow report to analysts that they are going to make money in the quarter when, indeed, they did not.
A company�s own sales staff is difficult enough to keep track of. It�s all over the region, the country or the globe, spending your money in search of sales. Salespeople are notorious for keeping leads to themselves, and for fudging probabilities to make their projected numbers. They have to be optimists or they would not be able to endure the life of a salesperson.
To make matters more complex, many companies don�t even have a direct sales force; they sell through networks of distributors and manufacturer�s representatives. The largest companies employ multiple channels.
Realistically, this means a VP of Sales, in order to make accurate forecasts, would have to be in touch with all the reps, all the distributors, and all the salespeople that touch his organization. And that all those people would tell him/her the truth. Many of these people and their organizations are not under his control � nor can he easily communicate with them. They�re outside the organization. Before XML, collaboration outside the organization was impossible. Now it�s merely imperfect.
Because this process is, at best, fraught with guesswork and inaccuracy, factories are built and never used. Unnecessary leases are signed, locking companies into long-term expenses. Warehouses are full of inventory with no buyers.
Or, on the other end of the spectrum, the company is not ready for increased demand. Intel shut down a General Motors line once during my brief tenure with the company, because someone had mis-forecasted GM�s demand for a certain embedded controller. Intel didn�t schedule the factory time to produce GM�s part. General Motors, which was putting together automobiles on what it thought was its own schedule, was thus brought to a halt by a supplier�s faulty forecast.
Thus, much is currently made of fixing the supply chain and the demand chain � or of how to keep the manufacturing processes rolling without breaking the bank. The supply chain is �where do I get the materials to produce my product?� , while the demand chain is �how many of these am I going to need for the next quarter?�
Another complication is that most techology sales are collaborative. This means more than one person, and often more than one company, is involved in a sale of any magnitude. A customer has a problem. A manufacturer�s rep dreams up a solution to this problem, a solution requiring his manufacturer�s part. This is called a design win. But let�s say this part is a chip, and it�s going on a board, and the board is going into a computer. How do the chip supplier, the board manufacturer, the computer assembler, and the marketing company handle their joint responsibility for getting this product to the end user?
Who actually made the sale? Who gets the commissions? When? How does each company time their inventory to meet the demand for this single product? How do they communicate with each other? What�s in the pipeline, or funnel, that constitutes the sales process?
The complexities involved in these technology sales have created a big business opportunity for Escend Technologies (www.escend.com), the leading sales and order management solution for manufacturers and representatives.
Escend Technologies (www.escend.com) provides sales process solutions for the semiconductor and electronic components markets. Its product enables manufacturers to deploy �funnel management� solutions without massive IT investments in infrastructure, services and support. Its customers include fortune 1000 electronic component manufacturers.
Escend�s new offering, Analytics and Reporting, provides complete sales funnel management, including opportunity analysis by confidence or sales stage. The funnel may be viewed by key customer, sales territory, product line, month, quarter or year.
�The key benefit of this product is its ability to provide automated updates of business trends to management in MS Outlook,� says Mike Penta, Escend VP of Marketing and Business Development. �Management can see design wins by product line or business unit, and Sample Request Trends by product line and sales territory.�
Visibility into the sales pipeline has historically been cloudy for manufacturing companies that use multi-channel commerce strategies, as well as for their reps, who must track their own designs through global manufacturing processes to ensure compensation. Escend�s software may provide a light at the end of the tunnel.
