Super Forecasting For IT Portfolio Success

To truly transform your forecasting processes, you must understand the levers that impact your business, and manage them on a more frequent basis than annual forecasting. Successful IT project cycles are critical to your company’s health and revenues.

How can your organization improve and even predict project outcome before spending time and money?

Let’s look at the normal corporate process of planning, budgeting, and forecasting:

  • Strategic Plan – outlines the company’s financial direction and expectations for the next three to five years.
  • Budgeting – documents how the overall plan will be executed month to month, specifying expenditures.
  • Forecasting – uses accumulated data to predict financial outcomes for future months or years.

For IT projects, usually forecast is given to the line of business, and then a ROI is created with a vendor. The ROI is a gut decision for the true impacts to top-line revenue growth or cost savings, with no factual operational execution baked into the analysis.

How can your organization improve and even predict project outcome before spending time and money?

  • Frequency of budgeting and forecasting processes: Increasing the frequency of forecasting cycles drives greater alignment between organizational strategy and operations. Use rolling forecasts to change the traditional annual mindset and keep pace for agile IT project development.
  • Outcome-based budgeting: Aligning budgeting with operational drivers will enable organizations to align operational performance effectively with planning processes. This strategy allows companies to manage effectively and properly align performance.
  • Participation and collaboration: To gain a greater understanding of the planning and budgeting processes, resources from across your organization must be involved—not just finance or IT-focused stakeholders. Your operational resources have the answers that produce the best projections of business activities, and those who assign responsibility to individuals are responsible for execution. This type of collaborative process offers greater accountability, better operational alignment, and better overall execution of corporate strategy.
  • Leverage technology: Excel spreadsheets are no longer effective for the challenges of today’s complex businesses.  Several solutions, including ReM Score from M Corp predict execution and project risk to help automate the forecasting process.
  • Process governance: Organizations that deploy a well-articulated planning process that identifies key stakeholders and associated processes, and leverages effective technology solutions, tend to be the organizations where the planning process adds value to the organization.  Adhering to a plan, organizations can decrease the overall budgeting timeline to less than a month, and improve the overall effectiveness of the process.

In Summary

Early on, nailing down an understanding of the future state of your risk and execution capability drives efficiency, improves forecasting, and creates a shared vision for success. It is a critical component to transforming any organization, making the best use of critical data to inform key decisions and strategies.  Take your organization into “Super Forecasting” status and enjoy greater IT portfolio success!

Categories