The goal of this article is to provide an overview of the labor cost planning possibilities in EPM Live. EPM Live cost management capabilities are flexible and easy to use at both the summary level and detailed level. A key distinction between planning costs at the detailed level or summary level is the visibility of their budgets and actuals, broken down by labor roles. Whichever cost planning approach you to chose to use, EPM Live provides for flexibility.
1. View Planning at the Summary Level (Cost Category Level)
- Planning at the summary level (cost category level) does not require the details of individual roles or the quantity of hours, to complete the initiative. This type of planning is focused more on the monetary amount rather than time. The use case here is where organizations who plan their “labor” budgets do so with “labor” as the total sum of costs. This may include breaking it down into multiple labor buckets, such as capitalized labor and or operational labor as seen in this example. In this example we can see how a PM enters the budgeted amount for a project item – close to 25K for example in June- which is what they budgeted and spread over Capitalized Labor and Operational Labor.
1.1. View Cost Analyzer with Planning at the Summary Level (Cost Category Level)
- In the Cost Analyzer we can see what was budgeted (heat map) and what was actually spent (numbers) across the entire portfolio.
2. View Planning at the Detailed Level (Cost Category Role Level)
- Planning at the Detailed Level (Cost Category Role Level) allows for detailed cost tracking. Costs are broken down for each type of resource (based on their roles). Costs are calculated based on the estimated labor effort at the associated rates. This is type of planning is more focused on time, which then derives the costs. The use case here is organizations who use this type of planning do so as they need visibility of their budgets and actuals, broken down by labor roles. This may be in accordance with contracts or services agreements that specify a contracted quantity of time to be spent by the resources involved. In this example, we can see users do not enter costs directly, but rather enter the unit of measure (UOM), which is hours. Then, based on each role's rate, the cost would auto-calculate.
2.1. View Cost Analyzer with Planning at the Detailed Level (Cost Category Role Level)
- Time is entered and costs are calculated accordingly.
3. Role Rates
A Cost Category Role is a labor cost category. Thus, each cost category role entered has an associated base rate entered by the Site Collection Administrator (SCA). This base rate may change over time and to accurately account the rate changes, an effective rate date can be entered and then the rate will update according to the effective date. This base rate will populate the rate standard rate field in the resource pool.
4. Named Rates
Additional Named Rates may be added in the Rates Table and once the Rates Table is populated, then the Resource Rates can be entered for specific Resources. The Rates Table is to be used if the Role Rate needs to be further specified. For example, there may be a standard rate for the Business Analyst Role. However, there may be senior level business analyst and intern level business analysts that have a higher or lower rate than the standard business analyst rate.
Note: It is NOT required to associate resources to a named rate. However, to note that a specific resource's rate is different than that of their role, the SCA would add the resource to the named rate in the rates table and that resource named rate would supersede the standard rate. The Standard Rate field in the Resource Pool for the resource will be updated to the new named rate.