Explains how to create a Labor Estimate based on actual performance history (in SAP)
Copying an Estimate from previous performance history or actual labor
Labor estimates can be created by copying previous performance history or actual labor booked in SAP to a an operative project and WBS combination. Basing an estimate on previous performance history should theoretically be more accurate than copying from a previous plan, because any variances between estimated or planned vs. actual labor are included when you copy an estimate from actual labor booking. However there are several practical limitations when using this method:
- The estimating work-breakdown structure (WBS) and execution or actual WBS are often different, especially before introducing a formal estimating tool with SAP baseline integration. Consequently it is hard to identify which WBS to copy from
- People do not always record labor accurately, especially when the level of task breakdown is very fine. They might for example record the entire day's labor to a summary WBS and not the WBS you want to refer to to copy performance history from
- Sometimes not everyone books labor directly to a WBS. Indirect costs are assessed separately in the cost estimating application however it is not always possible to align direct vs. indirect costs in this estimating application with direct labor charging policies in a system like SAP.
For these reasons care should be taken when copying estimates from a previous plan, and your company might consider converting actual performance history, after it has been extracted, reviewed, cleaned-up and made more useful, into a library of proposal templates to refer to instead.
To copy labor from an SAP project and WBS select the estimating method "Performance history (copy actuals)":
- Select estimating method "performance history - copy actuals"
- Select or enter the SAP project you want to copy from
- Select or enter the WBS within this project you want to copy. Be sure to select a labor WBS. If you wish to copy history from several WBS elements then repeat this step
- Optionally enter the complexity factor. This is the ratio you wish to apply to the historical data as it is copied
- Click the copy button. You may get a warning message informing you that the selected WBS has no actual hours recorded in SAP, plus the popup below
- The actual effort for your selected proposal-WBS is displayed as a reference. If actual effort for your reference proposal-WBS is 0 hrs you can expect nothing to be copied
- The complexity factor defaults to the value you entered above. You can adjust it here before copying
- Uncheck "Copy estimated hours with resources" if all you need is a list of resources and you wish to estimate the hours yourself. Actual effort or hours booked into SAP will be copied from the reference SAP Project and WBS by default
- If you have existing labor in your estimate check this box if you want to replace your existing labor. By default the copied labor estimates are appended into the resources list
- Enter a remark to explain your rationale and click the CONFIRM button to copy.
Changing Estimating Method in Resource List
Once you click the copy button the all the SAP labor booked to the selected project and WBS is summarized based on each person's SAP work-center and activity type combination (resource in this application) and copied into the labor table below.
- Resources are set to whatever resource in this application corresponds to the same SAP work-center or cost center and activity type combination as the individuals who booked time into SAP
- The estimating methodology is set to "Performance history" to indicate that this estimate was copied from actual history
- Effort is copied from SAP's sum of actual labor postings for this WBS and resource group combination, multiplied by the complexity factor. Start and end dates are derived from the WBS or proposal, duration from work-time between these dates and full time equivalents (FTE) from effort / duration
- The SAP reference quote or project and WBS stored the reference project/WBS you selected to copy from. If you copy history from several WBS elements you can see what came from where in this column
- Variance to history column shows the historical sum of actual effort. Since effort = historical actuals x complexity, the complexity factor is the ratio between historical actuals and the new estimate
- The total cost is calculated based on the resource's rate multiplied by the effort. Since the rate is looked up in this application for the start date the total cost may be very different to the labor cost in SAP which uses an SAP rate valid when the historical labor was recorded.
Refer to this section for more information on how copied resources are added to existing resources in the labor list. If you modify the estimating method to "performance history (copy from actuals) in the actual table then while you still enter the "copied" effort manually, you must now select an SAP project and WBS to copy from and the variance to history is set to the effort input divided by complexity.
