The document summarizes a sales forecasting system from Incite Decision Technologies. It claims traditional sales forecasts are biased due to factors like unwarranted optimism. The system addresses these problems with an approach involving calibration of inputs, Monte Carlo simulation, and meaningful results to improve sales forecasting accuracy, prioritize opportunities, and become a learning organization. It provides graphical examples of outputs around probability distributions of revenue, identifying opportunities for resource reallocation, and tracking sales rep accuracy over time.

1. Incite!Sales: Sales Portfolio
Forecasting System
Improve Your Revenue with Greater
Accuracy in Sales Forecasts
www.incitedecisiontech.com
rdbrown@incitedecisiontech.com
678.947.5997

2. Sales forecasts are notoriously biased.
Why?
• Unwarranted optimism
• Sand bagging
• Sense of entitlement
• False precision versus accuracy
• Memorable or extreme events
• Availability of irrelevant information
• Anchoring
Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved 2
http://en.wikipedia.org/wiki/File:Double-alaskan-rainbow.jpg#filelinks

3. These effects are most noticeable in
firms with
• Long, complex sales cycles
• Low frequency, high value sales
• Little historical information on which to base
top-down forecasts
• Examples: professional services, capital
equipment firms, engineering, architecture,
construction, IT development, etc.
3Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
http://album.atomic-
systems.com/showPic.php/71307/HAM4.jpg

4. How does this affect your business?
• You fail to prioritize the best opportunities
effectively, leading to delay or failure to
close
• Income crunches and cash shortages take
you by surprise
• Production needs misalign with delivery
commitments
• The needs of your market get obscured by
false narratives, preventing effective
growth or expansion
4Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved

5. Our Sales Portfolio & Forecasting
System addresses these problems
5Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
• Avoid inherent biases in single point estimates
• Develop an accurate picture of when revenues
will most likely occur & when shortfalls are
imminent
• Reallocate resources to increase the likelihood
of closing valuable opportunities sooner
• Know which opportunities to abandon
• Become a learning organization that improves
forecasts & efficiency over time

6. The Four Pillars of the System
• Calibration – Inputs are “debiased” & put in proper form for
mathematical simulation.
• Simulation – Monte Carlo simulation operates on all inputs in
a statistically consistent manner for useful interpretation.
• Interpretation – Meaningful results are returned in clear,
graphical displays that permit important insights.
• Communication – Insights translate into action with the
proper resources & support coaching and incentive programs
Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved 6

7. Removing bias from sales estimates
starts with effective calibration
10% 90% 99%1% 50%
8 27 433 12
Input Calibration: Units Sold: acct 1
15.3
7Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
Avg
Exploratory dialog guides an
estimate for a range of
assumptions for each of eight
inputs, not just single point
values.
Visual feedback helps to
calibrate assumptions for
reasonableness. Should you
now widen or narrow your
estimate?

8. Get an accurate picture of when you
will likely see revenue occur
8Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
Peaks indicate when
receipts most likely
occur. Valleys indicate
distribution of income
concerns.

9. Get an accurate picture of where
revenue crunches & trends occur
!
9Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved

10. Understand where to make important tradeoffs to
improve closure of valuable opportunities
10Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
Could you reallocate
resources to improve the
likelihood of more valuable
awards?

11. Understand the efficient priority of
opportunities
11Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
What if you completely
reallocated resources from
pursuing these low marginal
contribution opportunities?

12. Understand the gap between total potential
income and risk adjusted income
Potential
Risked
$2M $4M
Revenue [$]
$6M $8M $10M $12M $14M $16M $18M $20M$0
12Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
Gap = $6.6M
10% 90% 99%1% 50%
Percentile Legend
Avg
The gap represents
the Value of Control
for insuring that all
opportunities result
in Award.

13. Learn from your history to improve
• Obtain insights into sales reps’
tendency toward accuracy
• Implement coaching and incentive
programs to improve accuracy
• Observe how sales reps improve
accuracy over time
Trailing 1Q Trailing 2Q Trailing 3Q Trailing 4Q
10% 40% 40% 10% 25% 30% 40% 5% 30% 40% 25% 5% 50% 25% 15% 10%
Trailing Quarter Accuracy: Units Sold: Sales Rep 1
13Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved

14. Should your sales organization use our
Sales Portfolio & Forecasting System?
14Copyright © 2013-2014 Incite Decision Technologies LLC, All Rights Reserved
www.incitedecisiontech.com
rdbrown@incitedecisiontech.com
678.947.5997
Contact us today to see a live demo
and learn more!
Is your company a professional services,
capital equipment, engineering,
architecture, construction, or IT
development firm?
Do you experience long, complex sales
cycles with low frequency, high value sales?
Do you possess little historical information
on which to base top-down forecasts?
Do you maintain a progressive attitude
toward advanced sales processes or want to
grow in that direction?