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I am curious what the recommended practice is, or how others may handle such a situation. For context, think in terms of a fixed price services project, meaning we are incentivized to be as efficient as possible. With that said, reality is often different from initial plans, either for better or worse as far as Work/Cost ‘budget estimates’ go to produce deliverables. As a project manager, I want to keep my project plan as accurate as possible, for both communicating to my customer as well as my executives: % completes, remaining effort/durations, forecasted costs, variance from budgets, etc. 

So the question is, what is best practice or how do others update a work plans remaining hours in order to have an accurate forecasted cost (lets assume we use the Update Forecast feature to do these). The main 2 options I am aware of are:

  1. Remaining Effort - Manually update ‘Remaining Effort’ for a work item (i.e. if ‘Work’ was 100 hours, we have charged 50 hours, but based on progress we believe there is only about 5 hours of work left. In this case I could update ‘Remaining Effort’ to 5)
  2. Work - Update ‘Work’ to reflect the new estimated total hours (i.e. if ‘Work’ was 100 hours, we have charged 50 hours, but based on progress we believe there is only about 5 hours of work left. In this case I could update ‘Work’ to 55)

Both of these options, as far as I am aware, bring to light their own issues for what I am trying to accomplish:

  1. Remaining Effort - ​​​​​​​Simply updating the ‘Remaining Effort’ field on a Work Plan does not impact the allocated hours that are driving financial forecasts, capacity planning, etc. although it does impact % complete. In order to update the forecasts, capacity plans, etc., the ‘Update Forecast’ option can be used to change the ‘Remaining Work’, however this has the following undesired impacts:
    • Updates total ‘Work’ which because of this relationship, makes several KPI’s inaccurate. For instance, CPI in this case is not 1, but because of this relationship it will now calculate as 1:
      • Work --> Budgeted Costs
      • Budgeted Costs --> Earned Value
      • Earned Value --> CPI
    • The new ‘Remaining Work’ value is now indicated as a ‘Set By User’ field, and thus when additional time is charged to the work item, it does not update.
  2. Work - This method ultimately has the same issue as the first point in the previous method.
    • Updates to total ‘Work’ which because of this relationship, makes several KPI’s inaccurate. For another example, Earned Value in terms of original budget is not the same as ‘Actual Costs’, but using this method, it will reflect as the same because:
      • Work --> Budgeted Costs
      • Budgeted Costs --> Earned Value
      • Earned Value --> CPI

Assuming I am not missing a key philosophy or best practice in Clarizen, the ‘Budgeted Cost’ field is misleading to me because its not really a budget in terms of an expected amount of expenditures to measure performance against. If this field is constantly changing, all my ‘budget’ KPIs (EV, CPI, %complete, etc.) are constantly changing. So back to the initial questions, what is the best way to manage a project with respects to performance against a budget and forecasting future work/costs?

Hi Patrick - thank you for your very detailed post which brings to light a few questions. I would like to reflect on this topic before coming back with an answer.

Please stay tuned.

Patrick, Not sure if this solves all you want, but have you tried using ‘baseline’ to create a reference to refer back to.  Once you have set your baseline then you would be free to update remaining effort or work and reference them back to the baseline.  Whichever field you then need to reference you are able to see the comparative change from the baseline when the project started.

@PhilSmith, I have, and you are correct that it solves some of the issues mentioned above. I guess the problem I still have with this method, is to me it doesn’t seem like that was necessarily the intended use or method per Clarizen calculations. The baseline can definitely be used to compare original vs current, but then the ‘budget’ KPI’s are still inaccurate (Earned Value, CPI, SPI, etc.). If those fields referenced ‘Baseline Budget’ or ‘Budgeted Amount’ instead of ‘Budgeted Costs’, then I think this method becomes applicable.

My other issue with this approach is in practice, Budget and Baseline can be 2 different things. To me at least, Budget is an initial estimate of expenditures and resources to allocate to complete a project (perhaps from a sales group for what they sold), while a Baseline is the approved ‘original plan’ of how the project will be executed. This could technically be different than a Budget if say the PM has a different or more efficient way they plan to complete some of the work (with that said, I do think more often than not the Budget and Baseline are the same or very close). 

All that said, @PhilSmith, I appreciate the reply and as it stands now this is the approach we are taking. Still hoping the Clarizen team can offer more insight as to how the recommended methods relate to the fields and calculations. Thanks all, look forward to continuing the conversation!

You should also review the options you have with respect work policy. Which field the engine adjusts depends on the policy selected.
Understanding Work Policy Logic – Clarizen Success
But agree, this is a complex topic. In our company we use Fixed Work.
In that, we instruct our project managers to manage their plan as follows:

  1. Start of with new work items and set start date, duration and planned work.
  2. Actuals are then updated via timesheets (Toggle “Actual Effort Updated from Timesheets” = on)
  3. Then PM sees calculated Actuals, % Complete (expected from timeline), Expected % complete, ETC and EAC. We also have a custom field that signals the variance of EAC towards planned work.
  4. When updating, we ask them to update planned work.
  5. On project level they compare roll-up of planned work to their budgeted work number.
  6. AND we make heavy use of conditional formatting in the various views to highlight variances, Issue, things to review…..

    Hope that helps. 

@stefan.kolip we also use Fixed Work on majority of tasks. In practice, we are doing mostly a similar process to what you indicate.

Just to confirm, on step 4, when you have them update ‘planned work’, you are talking about the ‘Work’ field, correct? Assuming so, in step 5, when you say compare to ‘their budgeted work number’, are you referring to the actual non-calculated field, ‘Budgeted Work’? Or the established ‘Baseline Work’ field? Or something else?

 

I am curious with this approach, are you doing any time-phased financial forecasting (and utilizing the ‘Update Forecast’ feature)? I assume you do not use the standard out of box ‘budgeting fields’ (CPI, SPI, EV, ETC, etc.) for any reporting with this approach?

Our solution for now is also to use some custom fields and approaches, but I am still trying to wrap my head around the intended use case the way Clarizen currently functions out of the box. 

Thanks for the input!

@patrick.jones 

On step 4: In our implementation the field is called “Planned Work h” - we had indeed renamed OOB field “Work”,

On Step 5: We use a custom field that rolls up from work-items to parent items and the project. This does not influence any calculations rather than serving the project manager to document original budgeted hours. And this optional in our processes - but we ask our Project ;managers to fill on Project level mandatory (or optionally use roll-up function from lower WBS structures). 

Baseline: We have baseline feature enabled for our project managers, again optionally for our project managers, but it is rarely used. But I see value in being able to compare e.g. GANTT or numbers to a baseline. But as we have a highly agile business we struggle with having only a single baseline data set available.

We are not using any of the earned value fields, nor any cost information. Our company is not mature enough to operate on Costs, we only look at actuals, billing and Revenue generation as per USGAAP. 
But we do use the financial planning panels - as same give good results for revenue Projection for T&M projects - but less effective for FF as what AW calls Revenue is reflecting billing in our language. As per USGAAP on FF projects Revenue is only on completion or as per POC (percent of completion). 

And yes, we do the same, explore OOB functionality, try and match with our requirements and closing gaps with custom fields, validation- and workflow rules ands custom actions etc…
I hope this helps…
Greetings from Germany, Europe

@patrick.jones Something that we have been developing which might be of interest is a custom action used at the start of the project that writes key data to a series of custom fields, purely to preserve the settings/data from the start of the project.

Our focus for this is currently on dates and effort (hours) but I see no reason why it wouldn’t work with financial and KPI fields for you also.  Given that they are task level custom fields all the data would be accessible to you in reports just like the standard field.  

If you think this might help, I’d happily walk you through in more detail about how we’ve implemented it.

@PhilSmith I actually have done something similar for now with regards to actions and custom fields to look at and calculate with reference to original budget/baseline info. But you make an interesting point that I may explore with purpose of saving info for multiple baselines in detail, something the versioning feature wont currently do (only saves project/milestone data). Thanks for the idea!

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