Comprehensive project management requires the establishment of project budgets and forecasts versions which can run in parallel to project execution. IFS/Project Budgeting and Forecasting gives a static view of a project at a particular time and allows forecasting from that point onwards. IFS/Project Budgeting and Forecasting is able to achieve the following:
The creation of a project budget normally starts off by creating a budget of the expected project cost by rolling up the project estimates into budget lines. Early in the project definition phase the scope is usually not known down to the smallest details, and the preliminary budget is defined on a high level such as the project level. When more details are known the budget can be refined as needed. An initial budget would as a minimum contain the cost/revenue element and amount associated with it.
Budget lines contain expected cost/revenue amounts irrespective of when the cost or revenue is expected to incur. In order to identify when the cost or revenue is expected to end up on the project it is possible to spread the cost or revenue into accounting periods. This is an optional process, but it is recommended.
When a budget line has been entered with the required information, the person responsible for the line will indicate that the line has been reviewed and is now complete by setting the status to Confirmed. When all lines are reviewed and confirmed, the entire budget will be reviewed by the person financially responsible for the budget.
When cost and/or revenue is starting to occur in the project it is important to compare those values with current forecasts and budgets. The cost or revenue must in many cases be retrieved relative to a specific date and time in the past, or it could be up until the current day. To view the project status at a specific time, a snapshot of the project is required. The snapshot combined with a forecast will show the project cost or revenue up until a specified date and time (cut-off date and time).
The next step is for the forecast to undergo an optional approval process. This may be done quickly by allowing the forecast owner to approve the forecast directly, or by using a pre-defined approval routing where individuals and roles can approve the forecast in parallel and/or in sequence. Once all steps in the approval routing have been approved the forecast will be set to Approved.
If the forecast created was intended to be set as a budget the person responsible for the forecast may set the approved forecast as the active budget. As there can only be one active budget at any point in time any budget currently set as the active budget will be replaced by the new active budget.
Once a budget has been set as the active budget it can optionally be set to control project procurement transactions against the project budget. All procurement transactions will be checked against the remaining budget amounts based on the budget control rules. The budget control rules will check that the cost does not exceed the budgeted amounts and threshold. It should not be possible to spend money if the rules are set up to not allow spending when insufficient funds are available. This will happen pro-actively preventing the user from running processes that would cause external cost to be posted to the project exceeding the project.
Throughout the execution project there will be a need for budget reviews and forecasting simulations. Such reviews will in many cases be done at pre-defined times, but they can also be done ad-hoc based on changes in the project. A new forecast can always be created based on a previous forecast, or even from scratch if needed. Once a new forecast has been created existing project cost or revenue information relative to a given point in time will be added to the forecast by creating and connecting a snapshot.