Scottish Water Reference Class Forecasting

Project description

The collaboration between Scottish Water and IBI allows us to learn valuable lessons about reference class forecasting while also providing insights to Scottish Water about their project management.

Reference class forecasting is a relatively new method used to adjustproject cost and duration estimations through an objective consideration of historical project performances. It contains three major steps:

1) create a reference class of similar historical projects,
2) collect data about probabilistic distributions of cost and duration for each project,
3) and, estimate the uplift curves for a planned project.

Using the reference class forecasting method is particularly useful in early project phases, when scarce information is available for making investment decisions for planned projects. Understanding this method through the work with Scottish Water is the first step towards possibly applying it to future projects.