Predictive Analytics is not a Crystal Ball – It’s SCIENCE!: Part 2
Welcome back! Hopefully you have had a chance to look at my last blog in this series where I spoke about how SAP is using predictive analytics to help you focus your sales quotations on customers more likely to convert a sales quote into a salesorder.
In this blog, we talk about the more logistical side of selling – how can you use Predictive Analytics and Machine Learning not only to improve your sales forecasts, but also how you can use machine learning to forecast delays in product deliveries to keep happy customers…. well …. happy.
Sales Performance prediction forecasting the number and value of Sales
Predicting the value and number of sales in future quarters is not an easy job. There is no secret sauce in doing predictions and, as you know, a sales plan is a strategy that sets out sales targets and tactics for your business which identifies the steps to take to meet your targets. Using historical sales information and planned sales pipeline metrics such as quotation conversion rates and contract fulfillment rates you can improve your sales forecast. Sales Forecasting can be a highly manual effort that incorporates a certain amount of human experience and intuition to develop a sales plan.
The Sales Performance prediction app, as seen in the screen shot below, uses a triple exponential time series algorithm to understand historical trends and to forecast sales. Further, the model can be finetuned on a regular basis by running with the latest data and simulations to reflect changing business conditions.
With the Fiori App Sales Performance-Prediction, Sales Managers can:
- Forecast the quantity and value of future sales
- Set sales targets and figure out ways to achieve them
- Increase planning accuracy with help of Machine Learning and reduce manual effort
- Actively manage their business by comparing Actual, Plan and Forecast Sales Data taking actions to dramatically boost business
Forecast the delivery delay for a corresponding sales order
Delivery Performance is a broadly used standard Key Performance Indicator in supply chains to measure the fulfillment of customer demand to the requested date. Sales Managers and Sales representatives love to see how their “sales to delivery” ratio helps the company to meet and beat the competition, not to mention how it helps them to ensure delighted customers. Sales Managers also benefit by:
- Gaining immediate insights to monitor & drive delivery delays
- Achieving a better delivery performance and higher customer satisfaction
- Decreasing manual effort to manage the delivery performance
The Predicted Delivery delay app, shown below, leverages the regression algorithms in identifying the delivery delay and the factors effecting the delay of the goods associated with the sales order.
With this App, a sales manager can monitor his/her current delivery performance situation, and instantly recognize the effect of the ratio of delivered to requested sales orders potentially preventing a critical delay of delivered goods and improving customer satisfaction and customer retention in the process.
Predicted Delivery Delay allows Sales Managers and Internal Sales Representatives to Monitor how likely a sales order item will be delayed and to take appropriate actions to avoid future delays by considering the criteria that might cause delays.
Through this short blog, I hope you have gained perhaps a little perspective on the pace with which SAP is innovating the intelligent ERP to make customers more profitable for a smoother and more predictable tomorrow.
Links to more information:
- SAP TechEd Online
- SAP TechEd 2018– All S/4HANA Cloud sessions
- SAP S/4HANA Community
- Cloud release information: http://www.sap.com/s4-cloudrelease