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💡Use Case: Forecasting Project Budgets in IT Consulting

A consulting team delivers custom development projects for multiple clients. They estimate tasks in Story Points and need to convert them into time and cost forecasts for better budgeting and client communication. Precise forecasting helps prevent unexpected expenses, reducing the risk of financial overruns and improving overall project management early on. 

🎯 Goals

  1. Estimate project costs early on at the planning phase using effort estimate - story points 

  2. Present transparent budgets to stakeholders and clients.

  3. Control profitability by comparing forecasted vs actual costs.

⚙️ Workflow 

1. Forecast the Budget in Story Points

  • The project manager and the team estimate the backlog in story points.

  • A conversion rate is set, for example:

    • 1 SP = 2 hours.

Using Time & Cost Tracker, create a Forecast:

1.1 Go to the Forecasts section of the app and click Create forecast button.

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1.2  Fill in the fields:

  • Forecast name – add a meaningful name.

  • Scope – select a Jira filter with needed work items for estimating the work costs   

  • Default forecasted rate – set an average hourly rate

  • Estimate field – select:

    • Story points or

    • Original estimate (we also support this estimate format)

  • Story point value – define how many hours equal 1 SP.

💡 Example: 1 SP = 2 hours.

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2. Review Your Forecast

Once created, you’ll get a budget forecast that translates Story Points into cost.

  • Both Story Point estimate and Forecast Rate can be edited anytime.

  • The forecast dynamically recalculates if you change hours or rates.

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3. Forecast Formula

The app uses a simple calculation:

🧮 Forecast Cost = Value of 1 Story Point in time × Number of Story Points × Hourly Rate

👉 Example:

  • 1 SP = 3 hours

  • Task = 8 SP

  • Hourly rate = $50

3h × 8 SP × $50 = $1,200

📈 Outcomes:

  • PM gains early visibility into overall costs to allocate resources smartly. Team members can be added if the budget allows, or vice versa, this team member can be rethought if it is actually needed, or alternatively, it can be reduced in scope.

  • PMs and stakeholders gain early visibility into risks of going over budget.

  • Clients see clear financial forecasts even though the project hasn’t even started.

  • Company improves profitability tracking across multiple projects.

If you need help or have questions, please contact SaaSJet Support or email us at support@saasjet.atlassian.net.

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