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Creating a Sales Forecast for Service Driven & Project / Billable Work

Fredrick Moore's Profile

I am looking for a forecasting model or tips on developing a forecasting matrix that can capture business development efforts, labor and backlog, current proposed work, and alliance (rarely proposed or bid on) work. Also, often there are times when existing work is increased by the client - sometimes just pushing back due date but within the same proposed budget and sometimes increasing budget, generating more revenue for the firm.

We are currently getting a weighted-revenue by using the sales reps' close probability. We then factor in the projects' start & completion date. We base backlog off of historic data, which seems to fall off at the end of the year but that isn’t accurate. And, we haven't found the best practice in predicting alliance work; but, we use various indicators to gain insight.

Are there any suggestion? Or, someone with experience in sales forecasting for engineering, design, and project management firms?


Topic Expert
Patrick Dunne
Title: Chief Financial Officer
Company: Milk Source
(Chief Financial Officer, Milk Source) |

I have to refer back to my days of working in a professional services firm. We used a series of spreadsheet and eventually moved these to Oracle CRM. Simplicity is what we preached to ensure use of the tools. We used a prospective customer template that had a red/yellow/green indicator. Red was a new prospect, yellow –one that was being developed and green, one where revenue was imminent. We indicated annual revenue potential. Sales management used this tool.

Once we had a good picture of the revenue we moved this to a sales forecast template that was reviewed by senior management each week. This was also red/yellow/green indicating red-new account-waiting on contract issue resolution, yellow-contract in process, green contract is signed.

I wish I had the template to give you better guidance, but this gives you a sense of the concept. This worked fairly well. We also reviewed all expected revenue for the month on a weekly basis at an executive team meeting each week.

Fredrick Moore
Title: Strategic Marketing & Sales Manager
Company: MC Consulting
(Strategic Marketing & Sales Manager, MC Consulting) |

Thank you Patrick. Your guidance had been good food for thought. I certainly think this color and opportunity status system could be applied to our process. Unfortunately, our alliance or PCN work doesn't always hit the proposal or opportunity reports. It's sort of work that a client call and request we handle without a bid. This happens often and at random. I will need to uncover a pattern or tracking system that can predict that type of work, as well. Although it's a great problem to have, it can stress labor.

A template would be awesome, I'll see what I can come-up with.


Krishna Munagala
Title: Regional Finance Head
Company: M.C.Dean Inc
(Regional Finance Head, M.C.Dean Inc) |

We make projections based on four buckets 1. Sales in pipeline with probabilities 2. Recurring T&M/ Cost plus 3.Existing backlogs and 4. Work not in progress (WNIP). We apply industry S curve or historical S curve or use Project schedule tools to get month to month. Lot of these applications were isolated to each other so sanity checks are done at Excel or at internal application.
Predicating PCO’s or WNIP is always challenging and inputs from historical trend of PCO may give some light or Business Unit leaders gut feel. Backlog in Hours are also key to check with dollar but getting labor hours from bids pending and projecting them is huge manual task. I think industry as it matures in technology adoption by SAP etc., I have some modules such BPC, Project schedules & Crew etc. some which can be integrated.
At the end some project delays or some go early completion so as long as we give some cushion of conservative then it all ties together

Fredrick Moore
Title: Strategic Marketing & Sales Manager
Company: MC Consulting
(Strategic Marketing & Sales Manager, MC Consulting) |

Thank you Krishna. I think applying the industry & historical S curves will be key. Along with Excel, we trying to develop our forecasting model through Vision CRM. It will be good to incorporate your suggestions.

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