How can you use a rolling forecast to improve your program management budget?

3 Establish your forecast model and process

The third step is to establish your forecast model and process, which are the tools and methods that you use to generate your rolling forecast. Your forecast model should be simple, reliable, and consistent, and use the key drivers and assumptions that you identified in the previous step. You can use various techniques to create your forecast model, such as historical data analysis, trend analysis, scenario analysis, etc. Your forecast process should be efficient, collaborative, and agile, and involve the relevant stakeholders and experts from your program team and organization. You should also define the roles and responsibilities, the frequency and timing, and the format and communication of your forecast process.

4 Generate your initial forecast

The fourth step is to generate your initial forecast, which is the baseline budget that you use to start your rolling forecast. Your initial forecast should reflect your program's current status, scope, and objectives, as well as the external and internal factors that affect your program's performance. You should use your forecast model and process to generate your initial forecast, and validate it with the available data and information. You should also compare your initial forecast with your original budget, and explain any variances or deviations.

5 Update your forecast regularly

The fifth step is to update your forecast regularly, which is the core feature of a rolling forecast. Updating your forecast means that you add a new period to the end of your forecast horizon, and drop the oldest period from the beginning. For example, if you use a 12-month rolling forecast that updates every quarter, you will add a new quarter to the end of your forecast horizon, and drop the first quarter from the beginning. Updating your forecast also means that you revise your key drivers and assumptions, and adjust your forecast model and process, based on the latest data and information. You should update your forecast at least every quarter, or more frequently if your program faces significant changes or uncertainties.

6 Monitor and evaluate your forecast performance

The sixth and final step is to monitor and evaluate your forecast performance, which is the feedback loop that helps you improve your rolling forecast. Monitoring and evaluating your forecast performance means that you measure and compare your actual results with your forecasted results, and identify and analyze any gaps or errors. You should use various metrics and indicators to monitor and evaluate your forecast performance, such as the accuracy, reliability, timeliness, and usefulness of your forecast. You should also use the lessons learned and best practices from your forecast performance to refine your key drivers and assumptions, and improve your forecast model and process.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?