Whether to engage sales people in the forecasting process remains hotly debated on LinkedIn.

While I have no objection in principle to sales people being involved in the process, I'm very skeptical of the value of doing so. Unless there is solid evidence that input from the sales force has improved the forecast (to a degree commensurate with the cost of engaging them), we are wasting their time -- and squandering company resources.

I would much rather have my sales people out playing golf, building relationships with customers, and actually generating revenue. We didn't hire them for their skills at forecasting -- we hired them to sell.

A Counter-Argument

John Hughes of Silvon provided a counter-argument in a comment on last week's The BFD post:

I see things somewhat differently.  Sales people have a responsibility to themselves and their company to try and predict sales for many good reasons.  Mostly to help balance company assets (inventory) that drive customer service.  Engaging sales people directly with an on line tool ensures their commitment to the numbers and publicly displays the results for all to see and grade them.  For example if we treated development people like you suggest treating sales people then we would never get any project completion dates and product planning would go south.  I have managed sales people for over 20 years and they like to take the path of least resistance (don't bother with forecasting) but frankly they have the same responsibility as the rest of us to commit to a task and then complete it.  Their are some fine tools out there for collecting sales inputs such as Silvon's Stratum Viewer product when combined with the Stratum Forecast engine the solution provides a complete sales forecasting and planning solution.

John provides a thoughtful argument, but let me explain why I'm still not convinced.

In the environment he describes, the sales people are not doing what I would call "forecasting" (i.e. providing an unbiased best guess at what is really going to happen), but rather committing to number. If there is a reward for beating the commitment, and a penalty for failing to achieve it, wouldn't the commitment be biased toward the low side? (Bias is easily determined by looking at history and seeing whether actuals are below, above (what I would expect), or about the same as the commitment.)

Similarly for project scheduling. If there are negative consequences to running over time and over budget, then wouldn't any rational project manager negotiate as much time and budget as possible before committing to anything?

When it comes to forecasting, can you reasonably expect to get an honest answer out of anyone?

I'm all for quotas, targets, budgets, commitments, or whatever else we have for informational and motivational use -- to keep the organization working hard and moving ahead. But these are not the same as an "unbiased best guess at what is really going to happen" which is what the forecast represents.

It is perfectly appropriate to have all these different numbers floating around the organization -- as long as we recognize their different purposes. (The fatal flaw of "one number forecasting" is that it reduces quotas, targets, budgets, commitments, and forecasts to a single number -- but they are meant to be different!)

There may be situations where sales force input can improve the forecast. Let's take a look at these situations next time, and see how to gather that input efficiently.