2.1 Reasons for Forecasting in Project Management
The ability to look into the future and make a forecast of what is going to occur is a vital aspect of project management. To be forewarned is to be forearmed and making reasoned forecasts of significant project events is a primary tactic for holding the project on course or altering the course if the forecasts show a change of direction would be appropriate.
Forecasting in project management can broadly be classified divided into three categories. These are:
- forecasting individual events,
- forecasting the outcome or progress of either a process or a large group of activities, and
- forecasting technology.
All of three categories are somewhat different in character, although some of the forecasting methods can be used in all of them. Forecasting individual events can exist in a typical project situation where estimates are made of the completion dates of individual activities within the plan as the project progresses. However forecasting the outcome of the project as a whole is a different process as the past history of the project needs to be created (assuming relevant data from the past has been collected and retained) which can serve as the basis for generating subsequent forecasts to track project progress. Forecasts of individual, stand alone events that are not the result of a string of events are generally forecast by opinion based methods, whereas events that are the result of a process may be forecast by one of a number of trend extrapolation techniques. In addition, technological forecasting should be another vital, ongoing activity in the project management discipline as rapidly evolving technology can render the current project facility obsolete.
Within this basic division, two further distinctions can be made:
- Forecasting, where there is some measurable history to use as a basis for the forecast
- Forecasting, where there little in the way of history