Project Cost Projections: General Information

You can estimate the final costs and remaining costs of a project at a particular stage by using cost projections.

Learning Objectives

In this chapter, you will learn how to do the following:

Create a cost projection class
Create a new cost projection revision for a project
Create a new revision of an existing cost projection
Estimate the costs of a project at a different level of detail
Review the projected costs in a project budget

Applicable Scenarios

You create a cost projection revision to compare the calculated costs with the initially estimated costs in the cost budget of a project, and thus to detect the parts of the project that may be over budget.

Budget Detail Level of Cost Projections

On the Cost Projection Classes (PM203500) form, you create a cost projection class and define the budget detail level of the cost projections based on the class. To do this, you specify the records that are included in the budget detail level by selecting or clearing the following check boxes: Cost Task, Account Group, Cost Code, and Inventory ID.

When you create a cost projection revision for a project on the Cost Projection (PM305000) form, its budget detail level is determined by the cost projection class that you select for this cost projection. The list of cost projection classes that you can use for a particular project depends on the settings of the cost budget of the project. The project’s detail level is specified in the Cost Budget Level box on the Summary tab of the Projects (PM301000) form and can be one of the following: Task, Task and Cost Code, Task and Item, or Task, Item, and Cost Code.

For instance, suppose that a project has the Task and Cost Code cost budget level. To create a cost projection for the project, you can use a cost projection class with any of the following levels of detail:

Cost task only—that is, only the Cost Task check box is selected on the Cost Projection Classes form
Cost code only—that is, only the Cost Code check box is selected on the Cost Projection Classes form
Both cost task and cost code, meaning that the Cost Task and Cost Code check boxes are selected on the Cost Projection Classes form
Cost task, cost code, and account group, meaning that the Cost Task, Cost Code, and Account Group check boxes are selected on the Cost Projection Classes form.
Tip:
You can release this cost projection revision because it includes the same detail level as the project budget currently has.

A cost projection class will not be applicable for this project if it is not compatible with the budget structure. For example, if the Cost Task and Inventory ID check boxes are selected on the Cost Projection Classes form, it cannot be used for the project with the Task and Cost Code cost budget level.

If you restructure the project budget, you then need to create a new cost projection revision of the cost projection class that has the appropriate level of detail.

Creation of a Cost Projection Revision

You create and process revisions of cost projections on the Cost Projection (PM305000) form. A newly created cost projection revision has the On Hold status and can be edited. You can create as many revisions of a cost projection as are needed for a project.

In a new cost projection revision, you specify the cost projection class, the revision ID, and the project for which you need to estimate the costs. Then on the table toolbar of the Details tab, you click Add Budget Lines. In the Add Budget Lines dialog box, which opens, you select the Included check box in the rows of the cost budget lines of the project for which you need to estimate costs. Then you click Add Lines and close the dialog box. The selected cost budget lines are added to the cost projection revision on the Details tab.

For each line, the projected values are calculated by using the following formulas:

Projected Cost to Complete = Budgeted Cost - (Actual + Unbilled Committed Cost) if Budgeted Cost - (Actual + Unbilled Committed Cost) is greater than 0; otherwise, Projected Cost to Complete = 0
Projected Cost at Completion = Projected Cost to Complete + (Actual + Unbilled Committed Cost)
Projected Quantity to Complete = Budgeted Quantity - (Actual + Unbilled Committed Quantity) if Budgeted Quantity - (Actual + Unbilled Committed Quantity) is greater than 0; otherwise, Projected Quantity to Complete = 0
Projected Quantity at Completion = Projected Quantity to Complete + (Actual + Unbilled Committed Quantity)
Projected Completed (%) = (Actual + Committed Open Cost) / Projected Cost at Completion * 100%
Projected Variance Quantity = Projected Quantity at Completion – Budgeted Quantity
Projected Variance Cost = Projected Cost at Completion – Budgeted Cost

You can change the projected values in a cost projection revision to see how this affects the cost budget. To change these values, for each cost projection revision line, in the Mode column, you select a data entry mode, which defines how the projected values in the line are recalculated:

Auto: If you manually modify any of the projected values in the row, the other values are recalculated automatically.
Manual Quantity: If you manually modify any of the projected values, the other values are recalculated automatically, except for Projected Quantity to Complete, Projected Quantity at Completion, and Projected Variance Quantity, which are preserved.
Manual Cost: If you manually modify any of the projected values, the other values are recalculated automatically, except for Projected Cost to Complete, Projected Cost at Completion, and Projected Variance Cost, which are preserved.
Manual: If you manually modify any of the projected values, the system does not recalculate the other projected values.

For each cost projection revision, in the Summary area of the Cost Projection form, the system provides the total values (in the Totals by Revision section) along with the overall project profitability information (in the Totals by Project section).

When you are done preparing a cost projection revision, you click Remove Hold and then Release on the form toolbar of the Cost Projection form. The system releases the cost projection revision and assigns it the Released status. The projected values in the project are copied from the latest released revision of the cost projection to the corresponding cost budget lines of the specified project on the Projects form.

Copying of Cost Projection Revisions

You can create a new revision of a cost projection based on the revision you are currently viewing on the Cost Projection (PM305000) form by clicking Copy Revision on the form toolbar. In the Copy Revision dialog box, which opens, you specify the ID of the new revision. You can also select whether the system should refresh the budget during the copying, and whether it should copy files and notes from the original cost projection revision to the copied one. Then you click OK to create a copy of the cost projection revision.

In the created cost projection revision, the system copies the following information from the original cost projection:

The project for which the cost projection is created
The cost projection class, which specifies the level of detail of the cost projection being created
The description of the cost projection

On the Details tab of the Cost Projection form, the system inserts all the cost budget lines that have been added to the original cost projection revision. The system specifies the Projected Cost to Complete, Projected Cost at Completion, Projected Variance Cost, and Projected Completed (%) values in the lines of the new cost projection as follows:

If the Refresh Budget check box was selected in the Copy Revision dialog box, the system specifies the latest budgeted values in these lines. That is, the projected values are copied from the latest released revision whose cost projection class has the same project budget detail level as the project budget currently has.
If the Refresh Budget check box was cleared, the system specifies the budgeted values from the revision that is being copied.