I have seen many sales teams struggle regularly to come up with succinct ways to determine if the typical forecast report is a reliable way to measure the likelihood of achieving short term revenue targets. It takes oodles of time to review and is often filled with emotional claims of progress (or lack of). One common element of most sales systems is to tag each opportunity with its stage — presumably a way to confirm progress is being made in a formalized way. What is surprising is that the stage view is not often used to assess the strength of the forecast as it relates to upcoming targets.
With this in mind, it strikes me that the stage may actually be a key indicator to overall forecast health. I relate this to the various stock market indices that are used to indicate economic trends — the Dow Jones, S&P, Nasdaq all amalgamate a variety of key stock indicators into one lump to track market trends. Everyone is familiar with the daily reports of the Dow and Nasdaq averages — up means increased wealth creation, down means troubled economy for all. If we took the same approach with forecasting, we could bring together the top N (perhaps 25) opportunities into one numeric measure by simply adding up all the stage values. A high number means we are deep into those opportunities increasing the likelihood of reaching a sales target, if they total a low number, we still have lots of work to do before end of financial period. Choosing a proper value for N would relate to how many opportunities need to close to make the upcoming target.
I like simple measures. This single numeric measure of the forecast — an S&P index (perhaps stands for Sales and Pipeline) — would go a long way to providing senior management a simple way to determine if sales targets are on track.