Secure and automated enterprise revenue forecasting

Abstract

Revenue forecasting is required by most enterprises for strategic business planning and for providing expected future results to investors. However, revenue forecasting processes in most companies are time-consuming and error-prone as they are performed manually by hundreds of financial analysts. In this paper, we present a novel machine learning based revenue forecasting solution that we developed to forecast 100% of Microsoft's revenue (around $85 Billion in 2016), and is now deployed into production as an end-to-end automated and secure pipeline in Azure. Our solution combines historical trend and seasonal patterns with additional information, e.g., sales pipeline data, within a unified modeling framework. In this paper, we describe our framework including the features, method for hyperparameters tuning of ML models using time series cross-validation, and generation of prediction intervals. We also describe how we architected an end-to-end secure and automated revenue forecasting solution on Azure using Cortana Intelligence Suite. Over consecutive quarters, our machine learning models have continuously produced forecasts with an average accuracy of 98-99 percent for various divisions within Microsoft's Finance organization. As a result, our models have been widely adopted by them and are now an integral part of Microsoft's most important forecasting processes, from providing Wall Street guidance to managing global sales performance.