One of the features I wrestled with a lot during my early days working with Deltek Cobra, was the option to ‘Scale retain EAC’. It’s one of those options you see during forecasting and it took a while for me to really understand its purpose.
In this article, I will basically spell out a step-by-step guide of Scale Retain EAC so you can benefit from this feature and expand your forecasting knowledge.
The Purpose of Scale Retain EAC
The option to retain the EAC is one of the two options you have for manual forecasting. When we implement a setup on-site, we will always create at least one manual forecast, depending on the experience and maturity of the customer’s EVMS.
This is usually the ‘Manual Forecast (Retain ETC) forecast class type. This is selected because it offers the best and most user-controllable option for delivering a good EAC value in the monthly reports because it requires input from the Control Account Managers (CAM)s directly and doesn’t rely on some algorithm to generate a rational value. Instead the CAMs provide their best estimate of remaining effort on in-flight and/or planned work.
This way, the auditor for the project will usually be more amenable to this approach when performing surveillance on a new EVMS.
The other option for manual forecasting, and the subject of this article is the Manual Forecast (Retain EAC). And already you might be sensing the reason why this method, while being perfectly legitimate in the right context, might be subject to more scrutiny in an EVMS surveillance situation.
As its name suggests, it is allowing Cobra to lock down the EAC and make the ETC adjustments, rather than having the CAMs do that job. So, for example, if your actual costs are coming in higher than estimated in the Forecast class, then Cobra will back in the remaining value to reduce the ETCs, and thus hold the EAC at its original value.
Look at the following diagram. Here you can see a Work Package with a manual forecast retain EAC class applied. As each month passes the actual cost come in 50 hours higher than the budget and ETCs for that period. Deltek Cobra is scaling the ETCs back with each overspend to keep the EAC at its original value.
That diagram captures the essence of the Scale Retain EAC feature. Now, the question becomes how do we use this? How does it help our CAMs and the project team in general?
As I mentioned we probably wouldn’t use this feature as the forecast value we would submit to the customer as part of our monthly reports. Rather this is an internal only forecast method. Auditors are usually rather prickly about software calculating driving values. This is because the software is simply following a mathematical rule that in this case, is not based in any reality, but solely on that fact that we don’t what to show a variance between our BAC and our EAC. So how then can we use this feature?
Using Manual Forecast (Retain EAC)
As I previously stated, use this only for internal reporting. It provides CAMs with a valuable insight into the status of their work package, based upon current trends in the actual cost of work performed. If, for example, they are seeing higher than expected actual costs coming in each period, a time-phased report based upon this forecast class would show them how realistic their ETCs are – those that they are submitting as part of the manual forecast process.
If the Retain EAC generated ETCs are now too low to complete the work, the CAM knows there’s a problem, and can know this in time to either fix it, or prepare a rational explanation as to the cause.
There’s another angle to this that you may not be aware of also. Did you know that you can manually enter an adjusted EAC in Cobra?
Using this feature opens a dialog that let’s you enter a revised EAC. This option is inactive in your Cobra system unless you are using the Manual Forecast (Retain EAC) forecast class as your EAC, and you have switched on the Scale Retain EAC option for the project in the Preferences tab of your Project Properties dialog.
The purpose of course is to allow the EAC to adjusted at the top level, and Cobra will back in any positive or negative deltas to the ETCs for the resources.
There is one caveat to all this. If you are getting actual costs from resources for which there are no ETCs, these actuals will further impact the ETCs for planned resources. This makes sense because how is Cobra to know how to deal with these additional unplanned values? So, it is possible to see your ETCs reducing for one resource, even when their actual costs are coming in largely as expected when using the Scale Retain EAC feature.
The bottom line therefore is, that if you are not planning on receiving actual costs from the planned resources, but instead from some other resource value, then you may not want to use the Scale Retain EAC feature or for that matter the Manual Forecast (Retain EAC) cost class. You’ll never see the full benefit at least where individual resources will be concerned.
I’ve been on programs where we planned at the generic resource level: i.e. Engineer, Technician etc., but received actuals from the individual resources, Bob, Janet, and John. I was not able to implement Scale Retain EAC on this program because every actual would have impacted all of the ETCs in order to keep the EAC at its original value.
Back to the discussion, if you do want to manually set the EAC, this will cause Cobra to initially back in the delta from the original ETCs and adjust them to the newly entered EAC value.
Setting Up for Scale Retain EAC
Now we’ve covered some of the basic principles behind the Scale Retain EAC feature, let’s look at how to set this up.
Here are the basic steps:
- Create a Forecast Cost Class with a setting of Manual Forecast (Retain EAC).
- Make this your Forecast Class in the EAC Cost Set.
- Initialize the class using the Reclass Feature.
- In the Project Preferences for Forecast, set the Scale Retain EAC feature to either Hours, Currency, or Both.
- Review and set the EAC new values for any Control Accounts or Work Packages you wish to adjust (most likely the in-progress elements that are experiencing issues with the actual cost values).
- Calculate Forecast to adjust ETCs.
- Report this data to the CAMs to make sure that ETCs for remaining periods are still realistic. If higher than expected actual costs have been pushing down the ETCs there may come a point where they are unrealistic, and there are not enough hours to finish the outstanding deliverables.
Step 1 – Create a Forecast Class
First, we create a new forecast class with the following settings by going to the Classes tab of the Project Properties dialog and clicking the New button. This starts a wizard that we can use to define our new manual forecast class. The key point here being that we have created the class with a Forecast Method of Manual Forecast (Retain EAC).
Step 2 – Include your Retain EAC forecast in the EAC Cost Set
Still in the Project Properties dialog, we’ve navigated to the Cost Sets tab and, in this example, we’ve swapped out the default ‘Forecast’ class in the Included Classes list for the new Manual Forecast (Retain EAC) class.
Step 3 – Initialize the Retain EAC Forecast Class
Using the Reclass feature, initialize the manual forecast by copying the budget class values to the manual forecast class. The generates you starting ETCs for the class.
Step 4 – Configure Project Preferences
Back in the Project Properties dialog now, we go to the Preferences tab and in here set the Scale retain EAC value to one of the three activating options in the list. Which you choose will depend on your preference, but keep in mind that these influence what is displayed in the Update EAC dialog. Personally, I like to set this to Hours because I find that CAMs think in terms of hours for their staff, not so much in dollars.
Step 5 – Update the EAC on CA/WP Elements
With these settings in place you will now see the Update EAC feature enables at whatever level you have set the project to capture actual costs at. In our example, we are collecting actual costs as the work package level. In fact, let’s look at what happens with each of these settings:
Scale Retain EAC = Hours
Scale retain EAC = Currency
Scale retain EAC = Hours and Currency
Step 6 – Calculate Forecast
After the actual costs have come in at the end of the reporting period, we are ready to run our Calculate Forecast process in the Processes ribbon. This step is where Cobra will make any necessary adjustments to the ETCs for this class depending on either a change in the Update EAC value, or on just actual costs, or both.
Let’s walk through this now using our simple example. We have a LOE work package with a project manager assigned. The work has just started and we will enter some numbers that demonstrate the function of the Scale Retain feature.
In this first image, I’ve set the time-phase table to hours so that this is easier to follow. The calendar has been advanced and you can see the two classes’ hours are in alignment at this point. We’ve neither changed the Update EAC or loaded any actuals yet so the BAC and the EAC are equal.
Next, the project manager actual costs are added, and he’s been a busy guy booking an unexpected 240 hours for the first reporting period.
Let’s see what the does with that situation. The Calculate Forecast options used are shown here.
After the calculation is completed, we can see how Cobra has backed the overspending of hours into the future period ETCs to get the EAC back to 900 hours. Specifically, you can see that the ETC total is now 660, which when you add 240 actual hours for that resource for the period gets you back to 900 EAC, the same as the BAC.
Now just for fun, let’s say that an Engineer books some hours to the same work package because she had been in a bunch of PM meetings. She is not scheduled on the task, there’s no budget for this, but nevertheless, she was in the meetings, and the time has been booked.
After running the Calculate Forecast function, you can see that the Engineer’s hours have further reduced the Project Managers ETCs in order to retain that 900-hour EAC.
And one last demonstration, what if we wanted to reduce increase the EAC to give back the Project Manager some of those lost hours. First, I’m going to use the Update EAC dialog to add 40 hours back to the EAC.
I then recalculate the forecast once more…
…and we can see that the ETCs for the Project Manager have increased back to 660 as they were before the Engineer booked additional hours.
The catch is, of course, that the EAC is now 40 hours higher than the BAC for that work package at 940 and 900 respectively.
Step 7 – Report Results to CAMs
The last step in all this would be to share this data with the CAMs. They would appreciate knowing that additional recourse booking hours to their planned work packages is affecting the EAC, and therefore their remaining ETC values. You can use a number of tools to report this but my favorites are still the Time-phased reports in the All Reports tab.
These allow me to easily report Budget and Forecast values on a time-phased basis, helping the CAMs manage their ETCs and keep on top of changing situations that may be affecting the future of their work packages, and ultimately their performance.
The Scale Retain EAC feature in Deltek Cobra can be a useful option when you wish to provide your CAMs or other stakeholders a view of remaining available hours or dollars when it’s important to keep the current EAC values stable. You can alert a CAM to some trends that might be taking the ETC into unrealistically low numbers for completing a deliverable.
I would also recommend that the Manual Forecast (Retain EAC) class only be used for internal forecasting, an early warning system as such, for your project team and not a forecast to be routinely shared with your customer. After all, while budget, earned and actual costs belong to the customer, some of the forecasts at least can belong solely to the project team.