October 2024
Want to make cost forecasts more defensible?
AI Forecasting builds an outlook directly from the control account data already in Contruent, and shows the reasoning and historical accounts behind each projection. A forecast can be traced back to its source data instead of reconstructed after the fact, giving reviewers something concrete to evaluate and making it easier to defend.
AI Forecasting Overcomes “How Did We Get Here?” Scrutiny
“How did we get here?”
It can sound more like a challenge than a question.
That shouldn’t be much of a surprise whenever a forecast comes from disconnected or Excel-based processes. They leave no clear breadcrumb trail back to the current data.
The reality is that cost overruns can emerge at any point within forecasting cycles. However, they may not become apparent until period-end. By the time someone asks, “How did we get here?”, the discussion is already happening later than it should.
A defensible forecast needs to be forthcoming—where the number came from and what it’s based on. Contruent AI Forecasting provides that critical transparency.
What AI Forecasting Adds: Transparency
When creating a forecast using spreadsheets, the workflow is disconnected: export to Excel and rebuild it, run a macro, then manually review it. Current control account data is separated from the forecasting workflow. Want answers to where a number originated or where an overrun began? You’ll have to do some reconstructing.
With AI Forecasting, no one has to reconstruct anything. It works directly from the control account data the team already accesses and tracks in Contruent. The source data is visible from the start. It traces the path from “here’s the number” to “here’s how we arrived at it,” making it easier for reviewers to see how a forecast was reached.
Supporting Better Forecast Reviews
We’ve all heard the phrase, “It’s all in the timing.” And that applies here. Waiting until the next forecasting cycle doesn’t give cost controllers and cost engineers sufficient opportunity to act on surfacing cost risks. They need to know now.
AI Forecasting delivers a forecast using the data available when you generate it and shows the data-as-of date with the outlook. It also explains how the projection was developed and identifies the historical accounts it drew on. Earlier indication of a possible overrun means earlier evaluation and action—and far less chance of playing catch-up later.
Surfacing Data Issues Before They Undermine a Forecast
A forecast is only as good as the data feeding it. This is where AI Forecasting can boost confidence not just at the forecast level, but at the data level. It flags more than potential cost overruns; it can warn you of conditions in the source data itself. For example, is a schedule date missing? Are actuals entered that start before the planned schedule does?
That gives cost controllers another way to find data issues they may have overlooked, and an opportunity to fix them before they wind up in a forecast. Catching them sooner means the problem is more likely to be manageable enough to remedy, rather than after it’s discovered in a forecast that’s already being used to make project decisions.
Even without warning flags, it’s a good idea to double-check the data because some issues may not trigger the warning rules in AI Forecasting.
What AI Forecasting Doesn’t Change
AI Forecasting is designed to work alongside the existing forecasting process—not replace it or rewrite it. It does not change cost data, reports, forecasts or the estimate at completion (EAC). The cost controller remains in control of the numbers and changes them when they deem it necessary.
The value of using AI Forecasting comes from giving everyone from the cost controller to the review team more information to work with, based on the data in the control account. It won’t replace their professional judgment; it supports the control they already have.
Toward a Transparent, Defensible Forecast
Being able to track a forecast back to real data helps it hold up to the “how did we get here?” scrutiny. AI makes that traceability—and therefore defensibility—possible. It does so not by taking over the forecasting, but by showing the data and reasoning alongside the outlook. AI Forecasting gets you there.
Want to find out more about AI Forecasting’s capabilities for adding transparency and defensibility to your control accounts? Learn more or request a demo today.