Run a Forecast#
Overview#
The forecast functionality can help you predict the costs needed to complete a project (estimate at completion) and determine the value of work finished thus far (earned value). A project forecast is based on current plans, expenses incurred, and the project manager’s assessment.
For tracking purposes, the actual figures used to predict project outcomes must be frozen in time when you create a forecast.
The values can be retrieved from a WBS line or from detailed schedules that include budget lines. The functionality currently only checks if budget lines are available for a WBS line and then uses those to give estimates. If there are none, the values from the WBS line are used.
This condition could conceivably be replaced by one that relies on a checkbox (such as the already available Copy Budget field). Selecting this checkbox on the WBS line could then tell the system to use the values stored on the budget lines.
Setup#
Before you can use forecasts, you need to set up a number series for them.
- Choose the Search icon, enter Projects Setup, and then choose the related link.
- On the Numbering tab, fill in the Forecast Nos. field.
Work with forecasts#
View forecasts#
Choose the Search icon, enter Project Forecast List, and then choose the related link.
This opens an overview of the forecasts you created. Select an entry from this list to view the related forecast card.
Create a new forecast#
- Choose the Search icon, enter Project Forecast List, and then choose the related link.
- On the ribbon, choose New. This creates an empty card. When you leave the No. field, a number is assigned automatically from the series that you set up for this purpose.
- Choose a project in the Project No. field. The current WBS version of this project is then copied to the new forecast. You can select another version at any time.
The descriptions stored with the project and the WBS version are also copied to the new forecast. A forecast description can be added manually.
Run a forecast#
To run a forecast based on the budget and actual figures of a specific WBS version, choose Actions > Functions > Run Forecast on the new forecast card. The actual values include posted project usage, posted project sales, and commitments.
The system then creates one forecast line for each WBS line, which includes any line that structures the WBS (such as Begin-Total and End-Total). It also adds lines of the Work Package type with their budget and actual values.
Each forecast has five major areas as described in the following table.
| Area | Description |
|---|---|
| Hours | Planned resource hours |
| PC | Planned personnel (labor) costs based on hours specified |
| MC | Planned cost of materials |
| TC | All costs added together (no manual planning) |
| SR | Planned sales revenue |
The PC, MC, and TC fields are described in more detail in the following table.
| Field | Description |
|---|---|
| Estimated Total Prev. Version | Shows the value of a previous forecast, that is, of the forecast specified in the Base Forecast No. field. If no base version is available, this field is filled in with the value stored in the relevant Expected BAC field. For more information about working with base versions, see Forecast Status |
| . | |
| Expected BAC | The value in this field is copied from the WBS (or budget). • If a WBS line is related to at least one budget line, this field is filled in based on budget lines. The type of a budget line determines if a line value is assigned to PC (resources and resource groups) or MC (items and G/L accounts). • If no budget lines are available, the WBS line is used. The billing type chosen for the related work package determines if a value is added to PC or MC. (Lookup) Shows the project budget or WBS line of the relevant WBS version. |
| Actual AC | Shows costs already posted. This field is filled in based on project ledger entries. (Lookup) Shows, based on Historical FC Data, the key project ledger entry values that led to this value. |
| Commitment [multiple fields] | Shows costs not yet posted to the project but recorded in the system. These result from the following areas: Hours Committed Shows the number of hours that were posted by resources but haven’t been copied to the project. Purchase Commitment Shows purchase orders, including partial quantities, not posted as received. Stock Committed Shows receipts posted but not used by the project. This commitment only shows up if you selected the Project Purchase Incl. Inventory checkbox in Projects Setup. Else, usage is posted automatically when you post the receipt, and no commitment is created. (Lookup) Shows, based on Historical FC Data, the key project ledger entry values that led to this value. |
| Confirmed IC | Shows the result of adding up the actual values and commitments. |
| Forecast ETC | Shows the result of the following formula, which is used as a default after the forecast lines are created: Target - (Actual + Commitments) This makes the remaining budget the default value. Planners can later change this field if it turns out that the remaining budget is too small or too large. Forecast values are entered in these types of fields in the following ways: • Regarding material, planners can manually fill in the remaining amount (cost amount) they expect will be needed for the project. • When it comes to labor costs, the following formula is used to fill in the field: Hours Forecast * Hourly Rate. This means that work is planned in hours. Planners then add the hours needed to finish a project. The hourly rate is copied from the WBS line and cannot be changed. Warning in all cases, the remaining effort must be entered without commitments so that planning doesn’t include values twice. If you used a base version, the value in this field is copied from the forecast run for that version but can now be updated by the planner. |
| Estimated Total EAC | Shows the result of adding up actual and forecast values, plus commitments. |
| Earned Value (Cutoff Date) | Shows the result of the following formula: (Actual + Commitments) / Estimated Total * Expected |
| Variance | Shows the difference between total and budgeted costs. A negative amount means costs are expected to exceed the budget. |
Status options#
A forecast can have the following statuses:
- Open
- Released
To change the status of a forecast, open the relevant card and choose Actions > Functions > Release Status or Reopen on the ribbon. However, you cannot reopen a forecast version that has already been used to create another forecast. Only released versions can be the basis for other (newer) versions. A released forecast is entered automatically as the base version when you create a new forecast for the same project.
Base forecasts#
If you fill in the Base Forecast No. field on a forecast card before you select the Run Forecast action (the field is filled in automatically with the most recent forecast set to Released), the new prediction will use the values of this base forecast instead of the estimated amounts from the project budget.
Note
Earned values are still calculated based on the budget. Just because a budget isn’t met doesn’t mean that the project increases in value.
Added effort#
An increase in project effort can happen for multiple reasons. If caused by increased material consumption or extra work, the costs of which the contractor must bear, the earned value of the project decreases, and the variance turns negative. Such a reason for added expenses might be an incorrect calculation, needed rework, or bad pricing.
However, if the additional expenses can be billed to the customer, planning needs to reflect the increase in project value. This requires raising the budget, typically by creating a new WBS version. Based on that, and the higher budget, you can then create a new version of the forecast to adjust the earned value and the variance.
Historical entries#
When you select the Run Forecast action, the program will copy all project ledger entries, time entries, item ledger entries, and purchase lines related to the forecast to a list of historical forecast entries, essentially freezing them in time.
You can then use the Lookup in the Historical Entry No. field to identify, for example, changes to item ledger entries because of recent inventory adjustments.
Print a forecast#
You can print a forecast at any time.
- Go to the relevant forecast card.
- On the ribbon, choose Reports > Print.
For an easier overview, the report will show a reduced number of forecast columns, rearranged into a pattern of rows that are printed below one another. Whereas the hours stored in the first area aren’t printed, each of the remaining four areas is aggregated on a separate row. Because of limited space, commitments are combined into one column per area. You can then use the Microsoft SQL Server Reporting Services to export the report to Excel or PDF.