Yes, Virginia, the sales forecasts fall into the forgiving category. And it’s a darn good thing, too, because the forecasts will never be super 214 ERP: accurate. This may be a tough pill for you long-term manufacturing people to swallow, but that’s the way it is.
The reason your sales forecasts will never be highly accurate is that your marketing and sales people cannot predict the future with certainty.Okay? If they could, do you think they’d be working for a living, knocking themselves out 40 plus hours per week trying to get customers to order your product? Of course not. Where would they be if they could foresee the future with certainty? At the racetrack, of course. And if the track’s closed? At home on their computers—trading in stock options and speculating on pork belly futures.However, there’s a flip side to this. In almost all companies who implement ERP, forecast accuracy improves substantially. This is done through more frequent reviews, on a more focused basis, with good communications and measurements. You marketing and sales folks should plan on working hard to improve the accuracy of your forecasts. Everyone, though, should recognize that the law of diminishing returns applies here: As forecast accuracy increases, there comes a point where each additional unit of effort does not generate a commensurate unit of greater accuracy.
This is where the forgiving nature of forecasts comes into play.Many companies have found their ability to cope with forecast errorincreases dramatically as they obtain: