The CFO and the Sales Plan

Ian Stone, Managing Director, UK & Ireland, Anaplan

A survey of CEOs[1] by Price Waterhouse Cooper recently highlighted the issues faced by businesses, and the conclusion is not altogether surprising: companies are facing more diverse and demanding customer segments while at the same time fending off intense competition and new market entrants. This is something which we hear regularly from customers and as technology continues to advance and impact on consumer and business preferences, it’s no wonder that more than 90% of CEOs want to change customer growth and retention strategies to reflect rapid changes in customer behaviour. But there are signs that the focus on the customer outside of the organisation is not being matched by sales planning on the inside, leaving CFOs exposed to inaccurate sales forecasts and unable to respond confidently to change.

For many CFOs, the sales forecast set at the beginning of each quarter is the last that they see of their businesses’ revenue prospects for the next three months. Many CFOs are working in a vacuum – a blind-spot created by outdated technology, organisational structures and processes; yet relatively small unplanned events that crop up in a quarter can have a profound impact on trading outcomes.

Ian Stone

Take for example, the sudden departure of a key account manager, staff illness leaving unassigned gaps in sales quotas, an unplanned shortage of vital components, unforeseen changes of personnel on the customer side, or unseasonal weather that delays product shipments. Any of these events on their own could be seriously disruptive to the integrity of the sales plan and with no visibility of the problem, the CFO cannot influence the outcome, manage market expectations or help to bring the organisation back on track. So how can an organisation tip the balance back in its favour?

Leading companies, like HP, Britvic and McAfee, are now taking a different approach to help them respond to changing events on the ground. They use analytic technology to speed up processes and enable a broader view of data and insights from across the business and wider industry influences, allowing sales plans to be recalculated from the ground up in seconds. For example, HP cascades its strategic goals to over 30,000 sales reps, 263,000 accounts, and 170,000 territories globally using modern analytical capabilities. What this means in real terms is that disruptive events, which drive unexpected changes in sales plans, can be recalculated in an instant and the effect on projected revenues and costs made available to the CFO immediately.

Of course technology alone will not eradicate the CFO’s blind spot. This type of approach also requires collaboration across the business and a willingness to share best practice and knowledge across function silos. But in a low-growth economy, which offers slender opportunities for expansion, it is essential that businesses leverage sales planning processes to the maximum extent possible, in order to drive revenues and keep financial plans in step.

[1] PwC 17th Annual Global CEO Survey