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Forecasting

Definition

Forecasting is the practice of predicting future spending, usually based on a combination of historical spending and an evaluation of future plans, understanding how future cloud infrastructure and application lifecycle changes may impact current budgets and influence budget planning and future cloud investment decisions.

This capability also involves collaboration between stakeholder teams like Finance, Engineering, and Executives to build agreed upon forecast models and KPIs from which to establish budgets that align with business goals.

Unfortunately, there is no one forecasting method that fits all situations.

Cloud spend is variable which is inherently difficult to predict. Specifically engineers can start workloads at any time typically without having to go through a procurement process.

Maturity Assessment

WHERE ARE ORGANIZATIONS IN TERMS OF MATURITY

Crawl

48.2%

Walk

32.8%

Run

19%

Most respondents indicated they were still working to improve accuracy of their forecasted spend with organizations that had a forecasted spend within a 5% variance of their actual cloud spend were also in the segment operating at a FinOps Run maturity.


Crawl

Walk

Run


Functional Activity

As someone in a Business/Product role, I will…

As someone in a Finance/FinOps role, I will…

As someone in an Engineering/Operations role, I will…

As someone in an Executive role, I will…

Measure(s) of Success & KPI

Measures of success are represented in the context of cloud costs and may include one or more key performance indicators ( KPI ), describe objectives with key results ( OKR ), and declare thresholds defining outliers or acceptable variance from forecasted trends.

Inputs

Get Involved

Get involved and contribute to the community by sharing your real world experiences related to this Capability in the form of a story or providing a playbook for how you have implemented best practices in your organization. Your real world experiences can be provided in the context of:

Join the conversation about this Capability in Slack . You can submit stories, how-tos and suggest improvements using one of the options for contributing here.

Related Domains

Featured Resources

Accurate Cloud Forecasts

Accurate Cloud Forecasts

Exploring Cloud Cost Forecasting

Exploring Cloud Cost Forecasting

Capability Assets