Parametric formula are used in the LABOR tab of your estimate for labor estimates or resources which cannot be easily estimated using level of effort or full-time equivalents or FTE x duration. Instead these resources are related to another resource or set of resources, perhaps a % of that resource effort. This is a called a cost estimating relationship or parametric formula. These formula should be created in advance of starting the estimate based on company parameters or factors and automatically calculated or base parameters.

For example if project management is 9% of the total effort then the formula for project management office resources would be total_effort x 0.09. Typically the percentage is not hard-coded into the formula but itself managed as a separate parameter for example "program_management_percent". The formula is better therefore as:

• total_effort x program_management_percent

To create a labor estimate based on a formula select the "Parametric" estimating methodology and select the appropriate formula for your resource. You might have to add the column for formula to the labor table to see it first.

1. Check that the estimating method is "Parametric estimate". This is used for reporting and to set the correct confidence rating
2. Select the appropriate formula. Click here for tips on formula set-up prior to this
3. Select the resource, department, start and end dates, distribution curve and other attributes as normal
4. Do not specify the work effort or full-time equivalents, as this effort is calculated automatically by your formula

After selecting the formula you will get a popup to verify the formula parameters and expression result, as shown below. You can also access this popup for an existing labor estimate formula by clicking on the pencil in the right side of the formula column.

1. The formula description is displayed along with all the parameters in the formula
2. You can edit the values only for parameters which are BOE-specific (the value is defined in each BOE-WBS ) or resource specific (the value is defined for each resource in your BOE-WBS)
   • The difference between a BOE-specific and a resource specific parameter in this context is if the same formula is used on two different labor resources in the same BOE. A single BOE-specific parameter value is shared between both formula vs. having two distinct values for that parameter if it is resource-specific
3. The formula expression is displayed (you cannot change it here only in the formula setup)
4. The result is calculated and transferred back to the total effort for this labor estimate. In this example 1.3 hours per ESLOC x 4 ESLOCs comes to 5.2 hours. The result is always in hours.