Cultivate Labs Support Article

Cultivate Labs Support Articles

Templates: Business-critical Forecasting Questions

This article lists examples of questions that can be asked in your site in four different risk areas: portfolio management risk, individual program risk, competitive risk, and strategic risk. You can also assess impact because of the risk by asking related, but separate questions. Examples will be given below.

It is important to remember not to “over-engineer” who answers what question. Users will self-select what they feel they have enough knowledge about to participate.


Portfolio Management

Portfolio management is the selection and management of all of an organization’s projects, programs, and related business activities taking into account resource constraints. Crowdsourced forecasting can be used to help manage a portfolio of products and/or projects by proactively forecasting their ability to meet stated performance objectives, milestones, and budgets as input for resource allocation and strategic direction decisions. The following are some example questions clients have been asking in this area:

  • Will product X have at least Y number of orders by Z date?
  • How much above or below the estimated budget will project X be?
  • Will project X meet Y performance metric this fiscal year?
  • Which project/product in our portfolio will achieve the highest margin levels?
  • What will be the total FTE allocation necessary to complete project X?
  • Will any output from research project X be included in product line Y by Z date?
  • What percentage of contractors will be classified as “small business” this fiscal year?


Program Operational Risk

For larger, more capital or resource intensive projects, a formal risk management program is typically put in place as part of the formal responsibilities of a program management office. A risk management program compiles risk factors threatening the success of the program, tries to understand the likelihood of those risks, and offers mitigating steps to reduce the likelihood of those risks occurring. Typically this assessment is done on a periodic basis and involves outside subject matter experts “grading” projects and establishing mitigation recommendations. In contrast, a prediction market allows programs to ask about the likelihood of risk factors on an ongoing basis and involve the project team, consultants, outside subject matter experts, even value chain partners if desired. Here are some sample questions:

  • What is the likelihood of X risk occurring?
  • What will be the number of bugs marked as “critical” on X date?
  • Will the supplier complete the order for X by Y date?
  • What will be the outcome of QA testing for component X delivered by Y subcontractor?
  • Will we complete the milestone by the date in the work plan?
  • Will the contract with the contractor be completed by X date?
  • Will we be able to train employees in X technology by Y date?
  • Will we have X number of team members certified as “expert” in Y skill?
  • Will X department be able to dedicate at least Y hours to complete Z task?
  • Will X regulation by the Federal Government pass during the Yth session of Congress?
  • Will the bulk cost of X technology component be below Y by Z date?


Competitive Intelligence

Competitive intelligence is the action of defining, gathering, analyzing, and distributing intelligence about products, customers, competitors and any aspect of the environment needed to support executives and managers in making strategic decisions for an organization. At most companies, employees live and breathe competitors and market forces every day either because they are directly involved in product development efforts, are buyers of competing products in their personal lives, or worked at competing companies. Typically competitive intelligence in strategic planning groups is assigned to specialty analysis boutiques and consulting firms who may not be as familiar with your business as your own employees and business partners. Many of our clients have thus turned to prediction markets as a way to improve their collective intelligence processes. Questions about competitors are also relatively “benign” from a cultural perspective and may be more readily accepted at first than questions about business performance.

  • Will competitor X hire at least Y number of resources in Z discipline this year?
  • What will be the market share of competing product X?
  • What will be the margin level of competing product X?
  • What is the production cost of competing product X?
  • Who will win the RFP?
  • At what price will competitor X obtain license to use Y technology for Z product?
  • What will be the revenues of competitor X in geographic region Y?
  • Will company A merge with company B within X timeframe?
  • Will competitor A license or build suspected new product X?
  • Who will competitor A license technology from to build product X?
  • What is the actual cost of competitor hardware product X?
  • What will be the percentage of sales of competing product X sold by channel partner Y?


Operational and Financial Forecasting

According to a Price Waterhouse Coopers "Barometer Survey" of 383 CEO's of privately held product and service companies identified in the media as the fastest growing U.S. businesses over the last five years, the most often used operational and financial metrics companies tracked were:

  • On-time performance
  • Product reliability
  • Customer response time
  • Customer satisfaction levels
  • Manufacturing lead time
  • Defects/returns
  • Revenue growth
  • Sales metrics by geographic region and/or business line
  • Operating income
  • Yields
  • Headcount
  • Product/service line profitability

These examples track closely with the types of questions our clients are asking in their Forecasts site. For example:

  • What will be the average score of our annual client satisfaction survey? 
  • What will be the average score of our annual employee satisfaction survey? 
  • Will the percentage of purchases vs. returns be less than x% for the first 6 months of product introduction?
  • What will be the year over year Q2 percentage increase/decrease of sales in X region for Y product line?
  • What will be our fastest growing business line by headcount?
  • Will the failure rate for component X be less than Y% for total sold?
  • What will be the market penetration for new product X after the first year of introduction?

Most larger organizations have a key performance metric guide tracked by senior executives. These are excellent documents to consult when thinking about what operational and financial forecasting signals should be queried as these documents are typically historical vs. forward looking. Financial statements for publicly traded companies, particularly the section on operational risk, may also be a source of valuable questions.

Go back to the Support page