FAQ
Sales Forecasting with Prophecy - FAQ
Our FAQ is divided into 4 sections. Click the section you want to jump to it in this document:
- Questions about Prophecy Functionality
- Commercial Questions
- Technical Questions for IT Managers
- Questions about forecasting techniques
If there's a question we haven't answered here, please contact us, either by telephone or our web contact form.
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Questions about Prophecy Functionality
Q: Can Prophecy export to an Excel spreadsheet? Yes, Prophecy can create an Excel spreadsheet from any Prophecy report. All formatting in the original Prophecy report is exported to the Excel spreadsheet. Each Prophecy report page is written to a separate Excel workbook tab.
In addition, you can copy and paste data through the Windows clipboard. Prophecy lets you copy non-contiguous cell selections from the Prophecy report into the target Excel or other application, passing only the cells and labels which apply to the original selection.
Q: How many statistical forecasting algorithms
does Prophecy support?Prophecy supports the following statistical forecasting algorithms:
- linear regression, with and without seasonality
- exponential regression, with and without seasonality
- Holt-Winters
- last year + previous year over year percent
They are made available in several different ways within Prophecy:
- Batch mode: apply statistical forecasting to a large number of product/customer combinations. (This mode is closest to what the majority of specialist statistical forecasting tools offer.)
- Wizard mode: select the target range of cells in your Prophecy report, choose a method from a simple dialog box and either paste the forecasts in individually or to all target cells with a single click.
- On demand view: generates a new statistical forecast view for the product, customer and measure at the current cell position in your Prophecy report. The view shows the time series as an interactive table, a graph, and also generates a commented description of the statistical control information from the forecast.
Remember that Prophecy aims to provide an awful lot more than just statistical forecasting, due to the limitations of short/medium term statistical forecasting by individual product and customer. However, statistics can at least form a base-line forecast where there is no previous forecast, or it can provide a 'sanity check' to the forecaster.
Q: Is there a difference
between 'forecasting software' and 'business forecasting
software'?Definitely! Forecasting in a business context is more often a process that involves multiple individual forecasters, management review steps, sign off and publication. As well as generating a volume forecast it is often integrated into the overall planning and budgeting process. Therefore there is a definite functional divide between software for forecasting and software to support your sales forecasting process.
Business forecasting software should have the following properties:
- It must support multi-user sales forecasting because business forecasting is a multi-user activity.
- It must enable a proper forecast/reforecast process. That is, it must support the ability to review / change an existing forecast in the light of the latest period's actuals. It must support forecast versioning through time so that you can track changes made.
- It must extend through to money as well as quantities, so that it can be integrated into the overall process of business planning and budgeting. 'Money', meaning sales revenue, gross margin etc..
- It must allow you to generate budgets by product, customer and time and to compare the progress of the current sales plan (actuals to date plus forecasts thereafter) versus the budget, as well as previous year(s) at all the varying levels of product, customer and time detail.
- Accuracy analysis. It must be simple for forecasters to analyse their forecast accuracy. If they cannot identify their mistakes they cannot learn from them and therefore improve next time! The start point for a forecasting cycle should be an analysis of the previous period's forecast accuracy. How well did the forecaster use the information they had to make the forecast and what can be learned from the forecast errors?
- The data must be viewable and capable of being forecasted across varying levels of product, customer and time detail. Bottom-up forecasting is generally the starting point, but top-down helps to give an overall perspective and 'sanity check' on the overall numbers, and allows review by exception.
- Business forecasting software must support a review and sign-off process. Therefore the forecaster must be able to submit his/her forecasts for review. A reviewer must then review and either request/make changes or approve. Multiple review levels may be necessary - e.g. sales manager to regional manager to sales director etc.. This feature ensures forecasts have ownership and visibility.
- Software for business sales forecasting must be easy to use, because business forecasters are not necessarily IT or statistics gurus.
- Mainly concerned with generating a forecast mathematically, given a time series history.
- Not multi-user.
- Forecasts the measure you provide it with, but does not (automatically) extend to revenue, margin etc..
- Limited ability to analyse or report on the data it generates.
- Limited or no ability to compare forecasts with budgets.
- Limited or no accuracy analysis on previous forecasts.
- Does not support a forecast review workflow process.
- Limited or no ability to report on or forecast at varying levels of product or customer detail.
- Offers numerous statistical options, which operate in a 'black box' manner.
- Not necessarily easy for non-statisticians to use or understand.
Q: Will Prophecy
automatically adjust next month's sales or future sales based on
the latest actual for last month/the last x months?
It would be fantastic if it could! However, does an oversale last month mean the start of an increasing rate of sale or merely business brought forward from the next month? Does an undersale last month mean the start of a decline, or merely that the stock pipeline was reduced and that actually there will be larger than expected orders this month? Basically, it is impossible for the software to know.
Therefore Prophecy will never change the forecasts without the forecaster's active participation. That way the forecaster is always responsible and has ownership of all their numbers. Though we accept that it would be marvellous if the software could somehow know these things!
Q: Can Prophecy
help me with sales analysis and reporting too? Yes! Prophecy's forecast and report screens are the exactly the same - you update your forecasts in Prophecy reports. Prophecy reports let you display just the products, customers, measures, time periods and comparisons you require and replay instantly, always pulling in the latest data from the Prophecy database.
You can display any dimension (i.e. product, customers, periods, years, measures or versions) on any report axis, just like (but better than!) an Excel pivot table.
You can drill up and down through the product and customer hierarchies.
You can conditionally format cells based on their numeric contents, to highlight particular conditions.
You can create your own, user-defined subtotals of products, customers or time period.
The data from any Prophecy report can be graphed and the graph always updates in real time as you change the forecasts or navigate the hierarchies.
All this functionality is implemented in a very visual way that non-technical users will find easy to use productively.
We have found that a lot of Prophecy users get a substantial part of their sales reporting from Prophecy. Sales managers in particular like the fact that all their data is in one place, is instantly available and that they only have one system to master.
Click here for a self-running demo of some of the features of Prophecy reports (opens in a new window).
Q: How can I get a demonstration
of Prophecy? If you are based in the UK, please call 01494 785574. Outside the UK, please either download an evaluation version of the Prophecy Client application here, or run a zero-install self-running demos in your web browser here.
Commercial Questions
Q: Please tell me about
Prophecy's pricing. The Prophecy licence is a perpetual, non-expiring licence, which comes with 60 days of free support and maintenance.
Prophecy is licenced on a per-named-user basis. Therefore any individual, whether as a forecaster or a viewer, who uses the Prophecy client application is deemed a named user. Volume discounts apply from 5 users upwards.
Please contact us for a detailed pricing quotation.
Q: On what basis
is Prophecy licensed - concurrent / named user or either?
Prophecy is priced on a named-user basis because named-user is simpler to apply to the type of system Prophecy is. We can spend lots of time 'dancing round the houses' on concurrency versus named users but ultimately what's important is agreeing a price that both parties find acceptable. Whether we talk concurrency or named users, you have a price in mind and we have a price in mind. Hopefully they will be similar!
Having said that, Data Perceptions would like to be 100% customer-focussed in all areas of our business. If you absolutely have to have a concurrent licensing model then we can discuss!
Q: You are UK based.
How do you support your non-UK users? We currently have Prophecy users in a variety of countries and time zones. We provide support by telephone, Skype and email. Where possible we work with you on your support issue using our secure remote desktop support server. In addition, Prophecy databases typically compress quite well so you can email your database to us in a zip file if required. Time zone differences can work to our advantage too - we fix while you sleep!
Overall, Data Perceptions takes support very seriously indeed. If you pay us the compliment of using our software to help run your business we feel you are entitled to the very best quality of support that we can provide. We know that our existing customers speak very highly indeed of the quality of support they receive.
Technical Questions for IT Managers
Q: What database does
Prophecy use? Prophecy supports two different database formats:
- 'Native mode' databases are proprietary, file-based databases. They can be stored on any operating system that supports simple file sharing. Any Windows server or Novell server will be fine. Prophecy handles all contention issues associated with shared files via protected rights, queues etc.. The advantage of 'native mode' is simplicity. All the database files are held in a single folder, which can be backed up or zipped easily and there are no third party software dependencies. 'Native mode' is also more suitable for standalone use - e.g. on laptops.
- SQL Server hosted databases store their data in a Microsoft SQL Server database. The advantages of SQL Server databases are scalability and the ability to access Prophecy data in any SQL reporting tool. Performance is more variable than with native mode, but can actually be better in some scenarios (because sparse data is handled more efficiently).
A 'native-mode' database can easily be migrated to SQL Server at any time by running a Prophecy database maintenance script in our Prophecy Database Manager application.
Both formats share the same ability to dynamically consolidate all forecasts in real time and to allow multiple users to concurrently 'hit' the database.
Q: How do I
import my data into Prophecy? You import data into Prophecy either using embedded SQL queries against your host database or by reading in flat files (i.e. comma or tab delimited).
- A Prophecy datalink object stores the (ODBC/OLEDB) database connection string and SQL query required to pull the data from your host.
- A Prophecy import filter either uses the datalink object or loads a delimited text file directly, and stores the connections between fields in the source data and fields in Prophecy.
- A Prophecy script executes the import filter to import the data.
Similarly, the Prophecy script can solve the 'missing' measures in the source data. For example, you can read in quantity and sales revenue and have Prophecy calculate sales price.
You can view a no-install self-running demo of this process in a new window by clicking this link.
Q: Can I export data
out of Prophecy into my planning systems? Yes! The export is scripted using a 'write once / use many times' Prophecy script. You can export either a fixed time range or a specified time horizon of future periods. You can export either to a text delimited file (e.g. csv or tab) or write to any ODBC/OLEDB target, such as Sql Server, Access, Oracle etc.. Also, you can choose the product and customer levels in the export. So, for instance, to export the forecasts into a production planning system you would export the base level from products (i.e. skus) and the top level from customers (i.e. Total Customers). You can either use period/year fields in the export, or your own, custom-defined time labels which the export script extracts from a lookup table in the Prophecy database.
Q: How does Prophecy
work with home based forecasters? Prophecy provides an exceptionally rich user experience - which we feel is required to productively assist sales forecasters develop and understand their forecasts more effectively.
Think of Prophecy as (aspiring to be) the forecasting application within Microsoft Office! Therefore the best way to deploy Prophecy to remote users is via Windows Terminal Server. This enables remote and office based Prophecy users to share the same database concurrently, with no additional consolidation or administration. The Terminal Server cost per remote user is very low these days.
Naturally, Prophecy supports data exchange between databases. Therefore it is possible to provide databases to each remote user that they can run locally. However, the extra administration that this requires together with the latency it introduces into the process through the need for distributions and consolidations makes it much less attractive than the Terminal Server route.
There is still a deprecated web server component available that works with Microsoft Internet Information Server to allow the Prophecy client application to run over the web. However, on a cost/complexity/reliability equation the Terminal Server route still wins! Currently the web server component supports 'native mode' databases only.
Q:
What language is Prophecy written in?Prophecy is written in 100% C++. We use Microsoft Visual Studio 2008 and the latest version of the Microsoft Foundation Class framework. The learning curve of C++ is steep, but it's still the language of choice for professional, top performance application development.
There are currently over 130,000 lines of hand-crafted C++ code in Prophecy. That's code written by Data Perceptions, and excludes comment lines (we have them!), blank lines and code in the Microsoft class libraries that we use. It's tough, but we remain committed to C++ because it provides the best performance for our users.
Q: How easy will
Prophecy be to implement? It should be easy and quick, providing you can efficiently source sales data and product/customer hierarchy data from your business systems. In time terms, that means weeks or days, not months or years! Getting data into Prophecy is simple, as described elsewhere.
However, it's worth bearing in mind that Prophecy is not just a simple spreadsheet, it's a multi-user business system. Therefore it should be implemented with the structures and disciplines you would apply to any other implementation. The hierarchies, data and database management processes must be robust and properly validated before users are allowed to start using the system.
Please contact us for more information on the implementation process. We are happy to send you additional documentation on implementation and the data import/export processes.
Q: How easy
is Prophecy to manage, once it's up and running? Once the import filters and database management scripts have been prepared (during your implementation) a normal database refresh consists of:
- Reading in the latest product file (to add new products to the database).
- Reading in the latest customer file (to add new customers to the database).
- Reading in the latest sales actuals and (if included) cost etc. files to the database.
- Aggregating the new data over products and customers.
Typically, database management is performed by a person from "the business" who has good administrative skills but is not necessarily an IT 'guru'. Refreshing the database each period should take a lot less than an hour each time.
Q: What are the system
requirements / recommended hardware requirements for Prophecy?
Client: The Prophecy applications run on any 32 bit and 64 versions of Windows from Windows XP upwards (including Vista and Windows 7). Any relatively modern PC will run Prophecy very satisfyingly.
Server: If you intend to use Prophecy's 'native mode' (proprietary) database (which fully supports multi-user concurrent access) you can host the database files on any server which supports simple file-based sharing - i.e. Window / Novell / Linux (with Samba). This format of database is optimised for speed over database size, so databases can get quite large. The maximum database size is 2Gb. Data Perceptions can specify the exact database size, given the number of products, customers, measures, time periods and versions you require.
If you wish to host your Prophecy data in Microsoft SQL Server then you will need any version from SQL Server 2005 onwards.
Questions about forecasting techniques
Q: Why do you recommend
a cautious approach towards statistical forecasts? We don't know your business and have not put your data to the test. However, our experience in implementing forecasting software in a wide range of markets is that the accuracy of statistical forecasts by product by time period tends to be unacceptable due to the high variability of promotions, competitor activity, marketing campaigns, customer logistics etc.. These factors generally do not happen at the same time each year and it requires judgement and interpretation to quantify their effects on sales. It is therefore very hard for a statistical algorithm to forecast them.
If forecasting the monthly peaks and troughs is the required output of your forecasting process then it is likely that statistics is going to be of limited use, other than possibly as a baseline forecast or a sanity check.
We believe in empowering your business managers to become better forecasters. These are the people who are most qualified to know and understand the effects of promotions, competitor activity etc. and when these factors are likely to apply. Prophecy is designed from the ground upwards to help business managers forecast productively and effectively by providing them with the flexible tools and graphical options which support 'judgemental' forecasting. It has statistical forecasting too, of course. Used carefully Prophecy's statistical forecasting algorithms can provide a start point or act as a sanity check on a forecast.
We believe that the forecaster should 'own' the sales forecast. This ownership comes from having carefully and objectively prepared it. Getting the overall (smoothed) medium or long term sales trend right is relatively easy - a year on year percent is likely to be virtually as accurate as a statistical forecast. What is hard, but extremely valuable to the business (and often the primary reason for forecasting), is predicting the individual peaks and troughs in product sales which is frequently typically very 'spiky'. That's where 'judgemental forecasting' and having the right people and tools to support 'judgemental forecasting' is key. Data Perceptions has the software and your business will have the right people!
One additional important point to underline. In the business process of sales forecasting the starting point for this month's forecast is normally last month's forecast for the out periods, updated with last month's actual sale. The process is then one of modifying the existing future forecasts in the light of the latest sale plus new information about promotional plans, competitor activity etc.. You will very rarely need to generate a completely new forecast from scratch, because this will overwrite all the promotional and other peaks or troughs that (should) have been crafted into the forecast. Therefore, again, sales forecasting software for business needs to offer features that help forecasters track and understand the patterns of sales and identify which forecasts they need to review rather than continually overwriting existing forecasts with new statistical ones.
At the very least, if you feel you want to use statistical forecasting, make sure the statisticians prove to you that their algorithms work on your data! We realise that there will be markets where statistical forecasts can be used - we just haven't found any yet! (Note: Prophecy does have statistical forecasting options! See above for more information.)
Please see our whitepapers section for more information about the thinking behind Prophecy's approach to business forecasting and the role of statistical algorithms.
Speak to an expert now. Call : +44 (0)1494 785574
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