So as you move through the product lifecycle, there’s a definite need for your forecasting to adapt. And that’s because the product and its nature, the investment, the resources behind it changes as it moves through the product lifecycle. So at the beginning, there’s lots of uncertainty, there’s lots of different products in the mix. Each product individually is having a relatively low resource. As it progresses through the phases, phase one, two, and three, and gets closer to launch, the resource and focus and attention from the company being placed in that product is increasing. So your forecasting needs to change. It needs to become more robust, more resources being put into it, more stakeholders get involved. The attention on it becomes more prominent, as ultimately that product is going to contribute to the company bottom line. So therefore, understanding what that could look like is really critical.
And as you move through to the end of the product cycle, understanding the loss of revenue and the impact on that is also really important. So that means you become more detailed, more focused on the individual product and resource increases. Your forecasting methodology and how you actually forecast will change as well. At the beginning, it’ll be quite simple. There won’t get that much data. It’ll be a lot of unknowns. And there’ll be about a range where forecast can land. Is it a $50 million, a $500 million or $5 billion product? So you’re dealing with quite different situations there based on limited data. But as you get towards launch, you need to be thinking, “how many sales reps do I need for this product?” So it becomes, it’s not $50 million or $500 million, it’s $50 million or $60 million. So you need to be more specific. So that means your methodology underpinning that needs to be more sophisticated, more comprehensive in order to deliver robust forecasts, which are expected when you come to launch.
The people involved as well…so when you forecast the early stage, there’s a few of you a global function. When you’re about to launch across 40 countries, you’ve potentially got hundreds of people in some way contributing to the forecast at different points with different agendas, different needs. So therefore, the complexity around managing the forecast, it’s not just about putting the numbers in and seeing what comes out. It’s about coordinating people, understanding different data available, that becomes really important as well.
And the role of a forecast might change if you think about a forecast methodology, which is more the consensus type forecast, et cetera. At the early stage, that might be a founding point as a reference point. But as you move through, companies will develop their own internal forecast and then they’ll use consensus to validate that or cross-reference that. So the nature of forecast and how it’s used throughout the product lifecycle will also change. And that means that as a forecaster, there’s lots of variety in your role, but then you also need to have several hats on and flex in different points. And often you will be focusing on a certain area or range in that product lifecycle. You might be focused on the pre-launch preparation and whether you are global or regional or in an individual affiliate country, the nature of your forecasting will change as well because you’ll be sitting at a different point in the product life cycle.
