Forecasting based on manual estimates

Forecasting the cloud spend based on manual estimates is the easiest thing to do and many organizations with a data center mindset use this method of forecasting. There is nothing wrong with using this method as a starting point. The key thing is to evolve to more advanced and accurate forecasting methods as the organization matures.

Let’s take an example. The finance team has asked IT to provide manual estimates for IT spending. Historically, IT has tracked spending in two buckets: data center cost and vendor cost. The data center cost represents the cost of provisioned capacity and is revised every three years when the company procures new hardware. Vendor cost is estimated every year based on annual business care reviews and how much outside help is needed to achieve business requirements.

The IT team has provided the following manual estimates for 2023 forecasting:

Manual...