Estimate-to-Complete (ETC)

Estimate-to-Complete (ETC) is a leading method to forecast the remaining work in a project. However, ETC is a time-consuming method of forecasting, because of the remaining work that decreases day by day. To calculate the Variance-at-Completion (VAC), a minimum of one valid registered cost forecast is required for each item of budgeted work in the project scope.

You must set the Leading Forecast Method field to Estimate to Complete in the Project Accounting Parameters (tpppc0100s000) session to default this forecasting method for a project.

You can start with the control budget as base for calculating the remaining work in a project. You can select the Generate from Budget check box in the Generate Cost Forecast by Cost Object (tpppc2216m000) session or the Generate Cost Forecast by Activity/Cost Type (tpppc2226m000)session to generate the cost forecast from budget. The estimate-to-complete and the budget have the same value as the work is not yet started and no progress is booked.

If there is a progress in a project, you must specify the cost forecast in these sessions for the current date:

• Material Cost Forecast (tpppc2516m000) session
• Labor Cost Forecast (tpppc2536m000) session
• Equipment Cost Forecast (tpppc2556m000) session
• Subcontracting Cost Forecast (tpppc2576m000) session
• Sundry Cost Forecast (tpppc2596m000) session
• Overhead Forecast (tpppc6106m000) session

To reduce the effort of specifying the forecast data, you can also generate the cost forecast using the Generate from Previous Date check box in the Generate Cost Forecast by Cost Object (tpppc2216m000) session or the Generate Cost Forecast by Activity/Cost Type (tpppc2226m000)session. The new forecast is generated based on this formula.

Forecast new date = forecast previous date - cost incurred between the previous and the new date

To take any unit costs into account that occurred in the intervening period, you must use the leading forecast method estimate-to-complete (ETC).

If the work is completed, the estimate-to-complete value must be zero. Select the Generate Empty Forecast check box in the Generate Cost Forecast by Cost Object (tpppc2216m000) session or the Generate Cost Forecast by Activity/Cost Type (tpppc2226m000) session to generate the cost forecast.

You can monitor the result of the ETC method in various ways. Possible scenarios:

• Using the Variance-at-Completion (VAC) method. The VAC in the Control Inquiries sessions, the Performance Measurement sessions, and the Performance Measurement using EVM (tppss0702m000) session is calculated using this formula:

  Variance at Completion = Budget at Completion (BAC) - estimate to complete (ETC) - actual costs

• The specified ETC forecast amount can be displayed as planned cost in the Display Financial Analysis (tppss0701m000) session.