Sales forecast (deliverables)

• Document expected "sales" of the products/services

  Each manager then identifies all the deliverables that his/her group produces. A deliverable is a project or service -- a single purchase decision. These deliverables represent accountabilities in the year ahead, and constitute the business forecast on which the plan is built.

  Requirements: Coaching helps participants translate "what we do" into "what we sell."

  Key learning: We are in business to produce products and services, not just to do roles, responsibilities, or tasks.

  In addition to assured business ("keep the lights on"), managers document speculative projects/services clients might choose to fund over and above the base. Managers list all the requests clients have made, since a service organization shouldn't judge its clients' ideas. Trimming the budget is a business decision, not a staff decision.

  Key learning: Clients decide what they'll buy, not providers (a fundamental principle of customer focus).

  The level of granularity is critical. Too high a level, and the deliverables lose meaning during budget negotiations. Too much granularity becomes cumbersome.

  Requirements: Clear guidelines on the definition of deliverables.

• Define customers (a client business unit, the enterprise, or peers within the organization); establish consortia as needed

  Deliverables are tagged with one of five "revenue sources": client, subsidy (corporate-good activities), venture (investments in the organization such as infrastructure), internal-indirect (where the customer for the service is a peer), and overhead (where the customer is the entire department).

  Most deliverables are funded by clients. But others are for the good of the corporation as a whole. If these costs are spread across the clients' deliverables, prices will be distorted and the internal department will appear less competitive. Corporate-good activities are funded as distinct deliverables.

  Some deliverables are investments in the organization, eg, in infrastructure. These projects must not be charged to clients (which would give them control of the organization's infrastructure) or imbedded in the price of client deliverables (which would distort prices). They should be funded by "venture capital"; then their depreciation is amortized across the resulting services. Thus, ventures are also funded as distinct deliverables.

  Requirements: Clear definitions of the five types of deliverables, and policies for use of each.

  Key learning: Who buys our products? Whom are we trying to please? What deliverables benefit clients, versus the corporation as a whole? What are we doing for our own benefit?

• Forecast units per deliverable

  Next, managers forecast the number of units to be sold for each deliverable. Forecasted units (volume levels) document a key assumption that drives costs, and are used in the calculation of rates (total cost/volume).

• Set priorities (base case or levels of speculative); set maximum growth cap (optimisitc limit on total revenues of speculative rows)

  Both base-line (pessimistic) and optimistic forecasts are developed. The pessimistic forecast is not determined by squeezing the budget for all deliverables. Rather, some deliverables are labeled "approved" (in the pessimistic forecast) while others are considered speculative (in the optimistic forecast).

  Key learning: What business can we count on? What is our growth potential?

Teamwork: link groups within project teams (primes and subcontracts)

• Code deliverables; match codes on primes and all subs

  When more than one group will work on the same deliverable, each group must plan its share of the project/service and apply its unique cost structure to its portion of the work. Then, all the groups on a project team -- the "prime contractor" (project or service-delivery manager) and all subcontractors -- must add their costs together to determine the total project cost.

  At this step, all rows are given a common code to link them together, and the prime contractor is identified.

  Requirements: Clear guidelines on coding the deliverables to link primes and subs. Training on who is to be prime for each type of project, and on what subcontractors might be needed. Tools to look for missing primes, duplicate primes, and coding problems.

  Key learning: Which groups will participate in each project team, and what each will contribute. Which group is the lead that's accountable to the customer for the entire project, which has a powerful affect on teamwork.

• Ensure the right subs for each prime, and no missing/duplicate primes