The previous chapter described how many water management decisions related to climate variability focus on a trade-off between maximizing the output and minimizing the risk of failure. In Chapter 2, the different timescales at which climate varies are discussed. There is seasonal, annual and sometimes decadal variation in rainfall that should be considered. Most water management systems are set up to manage seasonal variation in water availability. Annual and decadal variation in climate and water availability are more difficult to manage due to the lower predictability, understanding and experience with these longer timescales. A better understanding and enhanced predictability of climate variability can potentially improve the trade-off between maximizing output and minimizing failure. This chapter focuses on the use of seasonal climate forecasts as a tool to improve water management and how the analysis of historical climate data can improve the understanding of climate variability and its implications for water management.