TechKnowledge: A Conversation with Kim Orumchian, CEO of Right90

I recently had a chance to interview Kim Orumchian, CEO of Right90. If you already know how to perfectly forecast sales each and every time, then you don’t need to read any further. God bless you. But, if you do, there is some great insight from Kim that is worth a few minutes of your time.

Q: Kim, Right90 isn’t your first rodeo, as we like to say in Texas.  What led you to form Right90?

This is my 6th start-up, and the idea for Right90 came from my 4th start-up – Fatbrain.com. The problem was that our "top down" plan was good at guessing what revenue was going to be, but provided no detail on which customers would buy which products, when and for how much. We needed a "bottoms up" forecast, which meant asking individual sales people, channel partners, and buyers / product marketers for detailed product, unit, and price forecast and tracking their views as the quarter evolved. Even though this insight was absolutely critical to the success of our business, the process was very complex, usually done in Excel, and rife with errors. 

As it turns out, we found lots of companies faced this exact same challenge.  In fact, when we started Right90, we built a prototype and asked 10 prospects for feedback. When we showed it to a $100 million semiconductor company, the VP of Sales started talking about how well they did forecasting and how they had everything under control. We wondered if we were barking up the wrong tree. However, the CEO, who had been silent up to that point in the meeting, asked a simple question: if we are so good at forecasting, why are we so bad at anticipating what our customers are going to buy? They ended up buying Right90.

Q: Improving sales productivity is the Holy Grail.  We all want to do it.  How does Right90 do it?

Forecasting is a part of sales and there’s no getting around that. The process takes time away from the business of selling. What if reps could spend less time forecasting and more time selling—while providing a better forecast? The trick is to make forecasting easy and integrated into a sales rep’s normal, daily workflow so they don’t need to learn anything new.

Think of it this way: when you go to Amazon.com to enter an order, you don't have to be an order entry expert or ex-customer service rep: they make finding what you want and placing an order as painless as possible.

We do the same for sales reps. If a customer tells a rep their project is behind schedule (never happens, I know), the rep can shift his entire forecast for that customer with two clicks rather that retyping a bunch of cells in Excel. The rep never leaves the CRM system, so they can forecast in real-time… almost without knowing it.

Customers have found that Right90 can return up to 60% of their sales reps’ time while improving the timeliness, accuracy and completeness of the forecast. This means improving sales productivity and providing the organization with higher quality data.

Q: You have two degrees in physics.  How has that helped you in developing Right90?

After all that studying, I realized it is very hard to reliably predict the future relying exclusively on math. You really don't need two degrees in Physics to see that: today's financial markets are proof enough. The best way to see the future is to continually ask people closest to the issue what they see, vet their opinions, and then reconcile these filtered views with your top-down predictions. Often times, the most interesting observations come from exploring the differences between what people think from the top-down versus what others are saying from the bottoms-up.

Q:  We reach the Fortune 500 via Direct2Dell.  What would you like to tell them they need to focus on to improve their sales forecasting?

We see most Fortune 500 companies still relying on Excel and manual processes to pull together their detailed sales forecasts. Unfortunately, this means that, by the time the forecast is compiled (usually 4 to 8 weeks from when the forecasts were made), it’s already out of date. What's too bad is that they have valuable forecast information in their possession, but they are not able to use it effectively for strategic planning – which ends up hurting revenue, margin, and customer satisfaction.

In today's volatile and hard-to-predict environment, every zig and zag by customers and prospects can have a profound impact on financial results and investment choices. To overcome this, Fortune 500 companies need to:

  • Streamline the way they collect the forecast data and give selling time back to their sales forces
  • Track what’s changing in the forecast in real time to understand and respond to how the business is evolving.

Q: You emphasize cross-departmental collaboration as one of the advantages of using Right90?  What is not happening in most companies before you work with them?

Most companies create different forecasts for sales, marketing, and channels, but it’s so difficult and time-consuming to aggregate and reconcile this information that it’s rarely done. It doesn't help that each group forecasts a little differently — sales teams forecast by customer, marketing by product, and channel partners by either customers, products, or both. As a result, companies rely on separate plans that may lead to poor mix forecasting and unrealistic financial expectations rather than have one authoritative revenue forecast.

Here’s an example: one of our customers launched a new product; initially the forecasts from sales and marketing were consistent. But a few weeks following the launch date, the sales forecast started to push out in time compared with the marketing forecast. With Right90, the management could see that the sales forecast predicted a lot less margin than the marketing forecast, and they were able to ask why. It turned out that when the sales people talked with customers about the new product, they said "good idea, but it needs a few more features before we commit.” The executives were able to take corrective action and add features more quickly, and high margin revenue was booked sooner.  Because of Right90, this was all done proactively before revenue was lost. Without Right90, the issue would have never been detected.

Q: Right90 works in the cloud, correct?  What are the advantages you are seeing from working with Salesforce.com and working in the cloud?

Providing our software in the cloud gives us several capabilities that would be hard to replicate with on-premise software:

1. Enables companies to benefit from new capabilities immediately without the hassle of implementing or migrating to a new release. We also get immediate feedback on what functionality customers are and are not using — which makes our research and development much more precise and customer focused.

2. Makes it much easier to integrate our solution with salesforce.com – giving customers a much more unified and seamless user experience.

3. Makes it easier for us to capture and consolidate 3rd party information – such as channel partners and distributors, which normally would not have access to on-premise software within a company’s firewall.

4. Motivates us to create the most useful, usable and practical solution for our customers. We get paid only if customers see ongoing value from our application.

Q: What’s next?

We started our business focused on manufacturing companies and now have a broad range of manufacturers ranging from household names like Sharp, who is forecasting the LCD screens in your mobile phones, to compelling startups like Mellanox who build the networking chips in your Cisco routers.

We recently expanded beyond manufacturing and have added media and software companies to our customer roster. We’re also getting interest from Professional Service companies and other SaaS companies. Better forecasting is a universal challenge and we’re constantly enhancing our product to address this challenge for different markets.

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