Forecasting when a project would finish is a critical requirement for management. Generally, three distinct techniques are employed to provide these forecasts:
1. Schedule Forecast
The date derived directly from the project schedule.
2. Probabilistic Forecast
A risk-based approach calculating P70 or P80 dates.
3. EVM Formula Forecast
Performance-based dates using trends in EVM formulas.
Understanding the Reality
Each method offers a different perspective on project health, but they must be interpreted carefully:
- Plan-Based: Assumes everything goes as planned. In reality, the probability of every activity meeting its original target is remarkably low.
- Risk-Based: Provides a P70 or P80 date based on the assumption that quantified risks will negatively impact activities.
- Trend-Based: Assumes past performance will continue. However, project trends are rarely linear and often shift during execution.
The gap / delta between these techniques' forecast dates could be wide. So, for the cost estimate that is the most critical item for investors, stakeholders, and banks, which forecast date would you use?
While these roles assist the Project Manager, presenting them to a team unfamiliar with the concepts can often cause more confusion than assistance.
Discussion
[…] had a couple posts/ articles about the Schedule Reliability Factor, performance (https://khonopc.com/forecast-completion-date/) and their impact on the completion date. We have also developed the Khono Analysis Toolkit to […]
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