Calculate data in financial summary

This section describes how PPM calculates data in a financial summary.

Calculate forecasted labor costs from staffing profile

You can specify whether forecasted labor costs on the financial summary are to be calculated (rolled up) from the staffing profile. When this option is selected, separate, non-editable forecast lines are automatically created in the financial summary to reflect the staffing profile estimates, including the percentage split between capital and operating costs. For details, see Configure financial summary settings.

The forecast labor cost of a staffing profile is the sum of forecast labor costs of all positions in this staffing profile. The forecast labor cost of a particular position is calculated as follows:

Forecast labor cost of a position = Forecast labor cost of assignment or promise of the position + Forecast labor cost of unmet demand

  • Forecast labor cost of assignment = Total committed effort of the assigned resource * Cost rate of the resource

  • Forecast labor cost of promise = Total promised effort of the assignment * Cost rate of the position

  • Forecast labor cost of unmet demand = Total unmet demand effort * cost rate of the position

The cost rate of a position and resource is determined by the cost rule described in Best matching strategy.

Note: If there is over allocation on assignments, the unmet demand becomes negative. The negative unmet demand values are by default ignored in the calculation.

You can use the IGNORE_NEGATIVE_UNMET_DEMAND parameter to decide whether the negative unmet demand value should be ignored. For details, see the Server parameters.

Cost factors for calculating forecast labor cost

The following table describes cost factors used for calculating the forecast labor cost.

Entity Relevant Cost Factors
Forecast labor cost of a position's unmet demand
  • Role: Role of the position.

  • Region: As defined in the FM_SP_POSITION_REGION_PRECEDENCE parameter.

    For PPM 10.0.2 and earlier: If the USE_REGION_OF_RESOURCE_POOL _FOR_POSITION_ FORECAST_COST parameter is set to true, PPM uses the region of the resource pool specified for the position; otherwise, PPM uses the region of the staffing profile. For details, see the Server parameters.

    Note: If Region is used as the cost factor for calculating the forecast labor cost, the region only applies to the Region cost factor, it does not apply to the regional calendar used for calculating the forecast cost.

  • Resource Type: Resource type of the position.
  • Project: If the parent entity of the staffing profile where the position belongs is a project, the project is included as a cost factor.
  • Org Unit: If the default resource pool of the position is defined, the default org unit of the resource pool is included as a cost factor.
Forecast labor cost of an assignment

  • Role: Resource role when it is defined. Otherwise, PPM uses the position role.

    However, when the parameter SP_RESOURCE_ROLE_RATE_ENABLE is set to false, PPM uses the position role. For details, see the Server parameters.

  • Region: The region of the assigned resource when it is defined. Otherwise, PPM uses the region of the staffing profile where the resource belongs.
  • Resource Type: The resource type of the assigned resource when it is defined. Otherwise, PPM uses the resource type of the position.
  • Resource: Resource assigned to the position.
  • Department: If the department of the assigned resource is defined, it is included as a cost factor.
  • Project: If the parent entity of the staffing profile where the assigned resource belongs is a project, the project is included as a cost factor.
  • Org Unit: If the primary Org Unit of the assigned resource is defined, it is included as a cost factor.

The forecast labor cost is not updated immediately when you change cost factors described in the table above. It is recalculated base on the latest cost factors when the Staffing Profile Financial Summary Sync service is triggered by effort or status change of the position or assignment. PPM does not keep or consider historic cost rates after you change cost factors.

Note: If you change the cost rate by clicking the Add New Rate button on the Edit Cost Rule page and specify an effective start date in the pop-up window, PPM keeps and considers historic cost rates when calculating the forecast and actual labor costs for periods earlier than the effective start date.

For more information about calculating forecast labor cost, see Financial Management.

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Best matching strategy

When calculating the cost of a resource or a staffing profile position, PPM uses the rate of the cost rule that best matches the resource or the position. For details on how PPM picks up the best matching cost rule for a resource or position, see How PPM picks up cost rules.

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Actual labor cost period break down

The actual efforts you log in time sheets and work plans are in a continuous range. However, when rolling up the actual labor cost to the financial summary, PPM breaks it down into periods. The cost of each month is calculated as follows:

Actual Labor Cost of month n = Total Actual Cost * Working days in month n / Total working days during the period when actual efforts are logged

For example, a resource has been working on a task from July 17th to August 20th, 2013 and costs USD $10000. Data used when calculating the actual labor cost of this resource is as follows:

  • Total actual cost is USD $10000.

  • Total working days from July 17th to August 20th is 25 days.

  • Working days in July is 11 days.

  • Working days in August is 14 days.

Note: Working days are calculated according to the calendar of the resource.

Therefore, actual labor cost of this resource in July is USD $10000*11/25 = USD $4400, while that in August is USD $10000*14/25 = USD $5600.

The calculation of actual labor cost is the same for part time and full time resources.

For more information about calculating forecast labor cost, see "Configuring a Lifecycle Entity Financial Summary for Capitalization and Roll-Ups" in Financial Management User Guide.

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Net Present Value and Total Nominal Return

For information about net present value and total nominal return, see Appendix A of Portfolio Management User Guide.

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See also: