LEARN. PRACTICE. GROW.Budget, forecast, and units
The approved budget is an authorization reference; the forecast describes expected cost using current knowledge. Updating a forecast does not automatically increase funding. In an exercise, 18 thousand euros of actual cost, 12 thousand to finish, and three thousand of previously excluded decommissioning produce a 33-thousand forecast. Against 30 thousand approved, the gap is three thousand. Keep period, currency, and scope consistent. Person-days measure effort; converting them to euros requires explicit rates and rules. Do not directly add effort to money or assume every team has the same cost.
Build the remaining-cost estimate
Start with outstanding deliverables and their supporting assumptions. Six person-days at 600 euros and four at 900 euros cost 7200 euros before any other charges defined in the exercise. Include testing, documentation, temporary support, decommissioning, and external dependencies when in scope. Record rate sources and dates without treating an estimate as a commercial commitment. Avoid counting the same task in both a supplier package and internal effort. Review remaining work with technical owners: extrapolating yesterday’s average spending can overlook a future phase with different costs and skills.
Schedule changes coexistence costs
A migration may require old and new platforms during an overlap period. If the forecast already included the new platform but assumed retiring the old one in June, two additional months of the old platform at eight thousand euros per month add 16 thousand euros. Do not add the new platform again without checking existing inclusion. Distinguish technical shutdown from the end of charges: retained storage, licenses, and commitments can continue. Tie benefit timing to verifiable conditions, such as completion of required retention and cessation of charges, with evidence owners.
Consistent economic comparisons
Before comparing proposals, use the same horizon, scope, and cost basis. An upfront payment and its accounting allocation describe different views; adding them may count the same charge twice. If the exercise uses cash, include payments expected within that horizon. If it uses cost allocated by period, document that rule and its reconciliation with cash. In a simple analysis without discounting or tax, investment of 60 thousand and stable monthly savings of six thousand yield ten months of payback after savings begin. Coexistence or consumption growth changes the result.
Sensitivity and uncertainty
Sensitivity analysis changes one assumption at a time to understand its effect. Record defensible ranges for expected volume, contractual price, migration delay, or additional support duration. For variable cost calculated as volume times price, changing both together is a combined scenario rather than an isolated measure of each effect. An exposure with a 30% probability of costing 20 thousand has an expected value of six thousand in the binary model; an actual occurrence is not capped at six thousand. Show the range and risk concentration. Reserve allocation and use require authorized decisions.
Report variances and benefits with context
Retain the previous forecast, the revised forecast, and the reasons for the difference. A smaller invoice may reflect incomplete usage in the extract; confirm period coverage before declaring savings. Also show volume and unit cost: spending 24 thousand for 150 thousand operations costs 0.16 each, compared with 0.20 when spending 20 thousand for 100 thousand. Efficiency improved while total spending increased. Bring the financial owner a proposal with scope, impact, options, and deadline. In real organizations, confirm recognition, funding, and authority rules with FinOps and Finance; these exercises do not define accounting policy.
The approved forecast included 5000 euros/month for the new platform from July and zero for the old one. The old platform remains for two additional months at 8000 euros/month: incremental cost is 16,000 euros. The new platform was already included. If the old license cannot be cancelled as planned, calculate the contractual effect separately before promising savings.
Common pitfalls
Confusing person-days with euros; adding cash and amortization for the same commitment; omitting coexistence; declaring savings solely because unit cost fell; treating expected value as a risk ceiling.
Related topics: Plan effort, capacity, and forecasts · Control costs and close the lifecycle · Dependencies and the critical path
A defensible forecast explains scope, units, timing, assumptions, and uncertainty; a variance needs a decision with authority.
Reference: Cost Estimating and Assessment Guide · DR Technical Project Manager 2026.4; independent professional curriculum