Kildrummy® Forecasting Methodologies

The Kildrummy^® Cost Management Platform provides various methods to forecast cost. Users select the most appropriate method, based on project size, duration and business reporting requirements.

The scenarios below are suggested-use cases and the methodologies described are capabilities of our solutions, not requirements.

1 Budget-based Forecast

This forecasting methodology is most valuable at the outset and early stages of the Project, when little Progress, Earned Value and KPI data has been captured.

• The Budget-based Forecast adds the Original Approved Budget to any Approved Budget Changes to give the Current Approved Budget. Unapproved Budget Changes are then added to the Current Approved Budget to give the Forecast At Completion.
• Actual Costs To Date are subtracted from Forecast At Completion to generate the Forecast To Complete.
• Manually-entered Forecasts can be captured, for running ‘what if’ comparisons against the Budget-based Forecast.
• All these values may be displayed as overall totals or plotted against time on a chart.
  • When plotted against time, the Forecast To Complete is re-phased from Time Now to the item End Date.
  • Values can be phased using a date range and a profile curve, or by using discrete milestone payments.
• When budgeting is done in multiple currencies, forecasts can also be captured using multiple currencies along with time-varying future exchange rate predictions.

2 Cashflow Forecast

Commitment driven forecasts are useful when the WBS level, Budget Item, etc. is focused on an individual or group of POs, Contracts, Amendments and so on.

An example is where a ‘big ticket’ item such as a large value ‘tagged equipment item’ is being forecast. An additional benefit is that we can link the forecasting to phased payments and/or milestones.

• The Cashflow Forecast adds the Original Approved Commitment to any Approved Commitment Amendments to generate the Current Approved Commitment. Unapproved Commitment Amendments are then added to the Current Approved Commitment to give the Commitment Forecast.
• Actual Costs To Date are subtracted from the Commitment Forecast to generate the Remaining Commitment.
• Manually-entered Forecasts can be captured for running ‘what if’ comparisons against the Commitment Forecast.
• All these values may be displayed as overall totals or plotted against time on a chart.
  • When plotting against time, the Remaining Commitment is re-phased from Time Now to the item End Date.
  • Values can be phased using a date range and a profile curve, or by using discrete milestone payments or percentage milestone payments.

3 Calculated (Earned Value) Forecast

Earned Value Forecast methodology is most useful when the project is at a stage where progress is being captured regularly and estimates for “to Go” values are being provided.

KPI metrics can then be calculated and used to drive a forecast based on Earned Value as opposed to “spent” or “committed” – or alongside those methods should you so choose.

• Progress can be captured and used to perform standard Earned Value calculations including Estimate At Completion and Estimate To Complete. This can be done against part or all of Work Breakdown Structure or against some or all Commitments.

4 ‘What If’ Resource Cost and Schedule Forecast

‘What-if’ forecasting is usually done in the middle and later stages of a project or when a specific need arises, such as when a stakeholder wants to predict an outcome (a new forecast) based on a specific parameter and resource usage scenario.

For example, during a time critical phase of the project, for a specific area / scope of work, for a particular contactor or craft/group of crafts, the Project Manager might say…

“…what if we change the shift from 3 x 8 hour shifts to 2 x 12 hour shifts with paid overtime – what would be my cost and schedule impact or improvement?”

• Contractual Resource Rates, Overtime Thresholds and Working Patterns for each Resource Type are captured against the Master Agreement.
• For each Commitment, a Total Forecast Hours is captured along with the Expected Daily Hours for each Resource Type and the number of people in that Resource Type.
• The Forecast Hours To Complete is calculated from the Total Forecast Hours minus the Actual Hours To Date. This is divided by the Daily Hours and number of resources to give the Days Remaining. The Working Pattern is then applied to give a Forecast Daily Schedule, resulting in the Forecast End Date for that Resource Type.
• Overtime Thresholds are applied to the Forecast Daily Schedule to calculate the Forecast Cost for that Resource Type.
• The various parameters can be modified (for example, changing from 6 to 7 days a week, or from 8 to 10 hours a day) to see the impact on the Forecast End Date and Forecast Cost.