Every business needs to plan its expenditure and calculate ROI. Planning the budget gives guidance to organizations and teams on cost control. Organizations plan a long-term budget, for 1-5 years, which helps them to run the business based on the funding required. These budgets then come down to the individual project and application levels. During solution design and development, the team needs to consider the available budget and plan accordingly. The budget helps to quantify what the business wants to achieve. The forecast provides an estimate of what the company is making.
You can consider budget planning as important strategic planning in the long run, and the forecast provides an estimate at a more tactical level to decide the business direction. In application development and operation, you can quickly lose track of the budget and overrun costs in the absence of a budget and a forecast. These two terms may be confusing, so let's understand...