A Forecast is an estimate or prediction of future project conditions and events based on current information and knowledge. Forecasting helps anticipate cost, schedule, and resource needs, enabling proactive decision-making.
Key Aspects of Forecasting
- Based on Current Data & Trends – Uses real-time project performance to predict future outcomes.
- Helps Adjust Project Plans – Allows teams to modify strategies based on expected results.
- Can Be Applied to Cost, Schedule, or Risks – Supports multiple areas of project management.
- Enables Proactive Decision-Making – Provides early warning for potential issues.
Types of Forecasting in Project Management
| Forecast Type | Description | Example |
|---|---|---|
| Cost Forecasting | Predicts total expenditures based on actual costs and budget trends. | ”Project cost is trending 10% over budget.” |
| Schedule Forecasting | Estimates completion dates based on current progress. | ”Completion is projected to be delayed by 2 weeks.” |
| Risk Forecasting | Evaluates potential future risks and their impact. | ”Material shortages may cause delays in Q3.” |
| Resource Forecasting | Predicts workforce and material needs for upcoming phases. | ”Additional developers needed for Phase 2.” |
Example Scenarios
Software Development
A project manager reviews burn rate trends and forecasts that budget overruns will occur in the next sprint.
Construction Project
Based on weather patterns, a contractor forecasts delays due to expected heavy rainfall.
Marketing Campaign
A team analyzes ad performance trends and forecasts that adjustments to targeting will be needed to reach engagement goals.
Why Forecasting Matters
- Prevents Last-Minute Surprises – Helps teams adjust before issues escalate.
- Improves Budget & Schedule Accuracy – Reduces uncertainty in project execution.
- Enhances Risk Management – Identifies potential threats before they impact the project.
- Supports Better Stakeholder Communication – Provides data-driven insights for informed decision-making.
See also: Estimate at Completion (EAC), Schedule Performance Index (SPI), Cost Performance Index (CPI), Risk Management.