Brian was presenting his forecast in front of his teammates and was explaining why a deal that he had originally forecasted to close in the fourth quarter came in three months later. Here’s his story.
Brian was excited that the account he had worked on for nine months had selected his software solution. After several weeks of ensuing price negotiations, a $300,000 purchase order was submitted into the customer’s capital expenditure software system (referred to by the customer internally as the “CESS system”). Since several weeks were left in the quarter, Brian expected that he would receive the purchase order well before the quarter’s cutoff.
In Brian’s mind the deal was done. The purchase order would be printed and signed and he forecasted the deal accordingly. However, Brian was quite surprised to learn that the rules-based CESS system required that a purchase of that magnitude be approved by twenty-one different people. The purchase order had entered the “CESSPOOL of Purchase Order Approval”.
Because of this elaborate sign off procedure, it would take another three months before all twenty-one signatures were gathered. In the meantime, Brian embarrassingly had to explain to his manager why a deal he had absolutely, positively, guaranteed would close wouldn’t.
His assumption about the purchase order turnaround time was dead wrong. If only he’d had the foresight to ask about the details of the procurement process with the same diligence that he spent qualifying their decision making process before he committed the deal on his forecast. During tough economic times like today, you should expect every purchase approval to take two to four times longer than normal. Because, every organization exercises another excruciating level of diligence to ascertain whether or not the purchase is absolutely necessary.
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