Sales Forecasting in Small and Medium-Sized Enterprises

Abstract

This thesis examined the use of sales forecasting in the small and medium-sized enterprises (SME), which provide software services and applications to their business customers. Sales forecasting is important, because it directs planning and decision making in the companies. However, SMEs may not have proper tools and resources assigned to sales forecasting.

The theoretical framework of the thesis focused on two essential components; sales forecasting processes in SMEs and forecasting tools. Qualitative methods were used in collecting and analysing the use of sales forecasting in SMEs. The number of forecasting tools were reviewed in order to analyse the suitability of the tools for the SME needs. A total of 13 tools were selected for a detailed examination because the use of the selected tools does not require high investments, and therefore they were considered suitable for the SMEs. In addition, four sales directors were interviewed in order to a) examine how sales forecasting is applied in their company and b) what kind of challenges the sales directors were facing in sales forecasting. Semi-structured questionnaire was used in the interviews.

The findings of the study are related to the sales forecasting tool assessment itself and the themes observed in the interviews. Accordingly, the sales forecasting tools can be divided into three groups: business intelligence tools, visualization tools and customer relationship management (CRM) tools. Each group of the tools has a unique forecasting feature that is largely missing from the other tool groups. According to the sales directors, the main challenges were related to sales process data collection, the use of CRM in the field and subjective probability estimates of the deals. Recommendations are provided to SMEs to analyse the need of sales forecasting and how they could develop their sales forecasting capabilities.