To register cost forecast

If you want to see cost forecast on your project use either cost objects or cost types:

  • If you use cost objects, you can maintain the cost forecast for all cost objects related to elements and activities and use the forecast in the Control Inquiries (tpppc4850m000) session, the Display Financial Analysis (Graph) (tppss0701m000) session, and the Generate Financial Interim Results (tpppc2260m000) session.
  • If you use cost types, you can only maintain the cost forecast for activities, and use the forecast in the Performance Measurement (tpppc5840m000) session and the Performance-Measurement using EVM (Graph) (tppss0702m000) session.

How you register the cost forecast depends on the leading forecast method, which you defined in the PPC Parameters (tpppc0100s000) session. Use a forecasting method to predict changes to the budget, or to predict extra costs or to predict the total project cost. These forecasts are displayed in performance measurement and monitoring.

In the following procedures, generate forecast is performed with the Generate Cost Forecast Input by Cost Object (tpppc2216m000) session or the Generate Cost Forecast Input by Activity/Cost type (tpppc2226m000) session. The following check boxes can be found in the mentioned sessions and are referred to in the forecast procedures:

  • Generate Empty Forecast
  • Generate from Previous Date
  • Generate from Budget
Estimate-at-completion (EAC)

Estimate-at-completion (EAC) is forecasting the final stage of the project. The advantage is that the cost forecast is hardly influenced by changes in the actual costs or the budget. Therefore, you do not have to register frequently and still be accurate. To calculate the variance-at-completion (VAC), at least one valid registered cost forecast is required for each piece of budgeted work in the project scope.

The procedure for the leading forecast method estimate-at-completion (EAC) is as follows:

  1. In the Generate Cost Forecast Input by Cost Object (tpppc2216m000) session or the Generate Cost Forecast Input by Activity/Cost type (tpppc2226m000) session, select the Generate from Budget check box and generate cost forecast. The initial estimate-at-completion uses your budget by default.

  2. If you want to insert the cost forecast periodically, you can do this in the following ways:

    • If parts of the project scope require a new forecast, insert a new cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.
    • If a large part of the project scope requires a new cost forecast, entering a new forecast can be laborious, therefore, you must generate the forecast records for the new date. Subsequently, you can go through the generated cost forecast records and modify the forecast values.

  3. You can generate the forecast records in the following ways:

    • Select the Generate from Budget check box to generate cost forecast.

      Select this check box if changes occur in the entire budget. The advantage of this check box is that budget changes are visible if you enter new values. The disadvantage of selecting this check box is that the new forecast (budget value) overrules the existing forecast values for parts of the project scope that had no changes in the budget.

    • Select the Generate from Previous Date check box to generate cost forecast.

      Select this check box if the budget is completely changed. The advantage is that previous forecast values are visible if you enter new values.

If you want to monitor the result of the EAC procedure:

  • The variance at completion (VAC) in the Control Inquiries (tpppc4850m000) session, the Performance Measurement (tpppc5840m000) session, and the Performance-Measurement using EVM (Graph) (tppss0702m000) session is: budget at completion (BAC) minus estimate at completion (EAC).
  • The entered forecast amount can be displayed as planned cost in the Display Financial Analysis (Graph) (tppss0701m000) session.
  • The entered estimate at completion (EAC) is transferred to an estimate to complete (ETC) figure. The following calculation is used: estimate to complete (ETC) = estimate at completion (EAC) minus actuals.
Estimate-to-complete (ETC)

Estimate-to-complete (ETC) means to forecast the remaining work. However, ETC is a time-consuming method of forecasting, because the remaining work decreases day by day. To calculate the variance-at-completion (VAC), at least one valid registered cost forecast is required for each item of budgeted work in the project scope.

The procedure for estimate-to-complete (ETC) is as follows:

  1. You can start with the control budget as base. Generate cost forecast with the Generate from Budget check box selected. At this point the estimate-to-complete has the same value as the budget, as work has not yet started, and no progress is booked yet.
  2. If progress is made, you must register the cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for that date. To reduce the effort of entering data, you can generate the cost forecast with the Generate from Previous Date check box selected. You now get a new forecast based on the following formula. Forecast new date = forecast previous date minus cost occurred between the previous and new date. To take any costs into account that occurred in the intervening period, you must use the leading forecast method estimate-to-complete (ETC).
  3. If the work is completed, the estimate-to-complete must be zero. Select the Generate Empty Forecast check box and generate cost forecast.

If you want to monitor the result of the ETC procedure:

  • The variance at completion (VAC) in the Control Inquiries (tpppc4850m000) session, the Performance Measurement (tpppc5840m000) session, and the Performance-Measurement using EVM (Graph) (tppss0702m000) session is: budget at completion (BAC) minus estimate to complete (ETC) minus actual costs.
  • In the Display Financial Analysis (Graph) (tppss0701m000) session, the entered estimate to complete (ETC) forecast amount can be displayed as planned cost.
Estimated-extra-cost (EEC)

Estimated-extra-cost (EEC) means that you forecast on top of the budget. If the budget is not correct, you can either change the budget or forecast the budget deviation. If you choose to forecast the budget deviation, you only need to register forecast for that part of the project scope in which budget deviations are expected. However, you must still change your forecast if changes in the budget occur.

The procedure for estimate-extra-cost (EEC) is as follows:

  1. Initially, if parts of the project scope require a forecast, you insert a new cost forecast in the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.

  2. If you want to insert the cost forecast periodically, you can do this in the following ways:

    • If parts of the project scope require a new forecast, insert a new cost forecast the Cost Forecast by Cost Object (tpppc2816m000) session for the current date.
    • If a large part of the project scope needs a new cost forecast, generate the forecast records for the new date. You can then go through the generated cost forecast records of the new date and modify the forecast values if necessary. Generate cost forecast with the Generate from Previous Date check box selected. The advantage of using this check box is that previous forecast values are visible if you enter new values.
  3. If the work is completed, the estimate-to-complete must be zero. To reduce the work of entering data, you can generate cost forecast with the Generate Empty Forecast check box selected.

If you want to monitor the result of the EEC procedure:

  • The variance at completion (VAC) in the Control Inquiries (tpppc4850m000), the Performance Measurement (tpppc5840m000), and the Performance-Measurement using EVM (Graph) (tppss0702m000) is cost variance (CV) minus estimated extra cost (EEC). Where cost variance (CV) is performed minus actuals.
  • In the Display Financial Analysis (Graph) (tppss0701m000) session, the entered estimated extra cost (EEC) forecast amount can be displayed as additional planned cost on top of the budget.