When managing a project, keeping track of costs and making smart choices can determine whether the project succeeds or fails. Estimate to complete (ETC) is a powerful financial metric that helps project managers do just that.
Below, we’ll discuss ETC project management, including its definition, calculation methods, included costs, and how it empowers project managers to maintain control over their milestones and budgets.
Mastering ETC is like having a GPS for your project’s financial journey. It shows the clearest path forward, unlocking the potential to deliver projects on time, on budget, and with greater confidence.
In project management, ETC refers to the financial forecast of what it will cost to finish a project. It considers all the remaining work and resources needed to complete it.
ETC is more than just a number – it’s a dynamic figure that evolves as the project progresses. By consistently updating ETC, project managers can:
ETC isn’t just about tracking project costs. It’s about leveraging financial insights to drive decision-making.
With ETC, you can:
To perform cost management accurately, you’ll need a complete understanding of all expenditures associated with completing the remaining work, such as:
This would include any tangible items required to finish the project, such as materials, tools, or equipment.
Calculate employee and contractor salaries based on the hours needed to complete the remaining tasks. This may also include overtime or specialized labor costs.
Operational expenses tied to the project, including utilities, equipment maintenance, and administrative support, count as overhead.
Factoring in unexpected circumstances, such as supply chain disruptions or delays, can help you arrive at a more realistic ETC figure.
By accounting for these details, project managers can ensure that their ETC calculations are thorough and reflect the project’s true needs.
Calculating ETC requires a clear understanding of key project metrics and ongoing monitoring. Depending on the data available, there are several formulas you can use to calculate ETC:
Important Note: Accurate data is essential when calculating ETC. Outdated or incorrect numbers can lead to flawed forecasts, potentially causing financial or operational issues.
Incorporating ETC into your project management toolkit provides a wide range of benefits, including:
ETC allows you to monitor costs closely, making it easier to identify potential unnecessary expenditures and take corrective action before it’s too late.
With a clear picture of future costs, you can allocate — or reallocate — resources more effectively, so that the project at hand stays on track.
By forecasting costs and identifying potential financial challenges, ETC helps you proactively address risks that could derail your project.
Try out the best business forecasting software here!
ETC data can be used to make informed decisions about scaling back or expanding project scope, securing additional funding, or reallocating resources to maximize impact.
Accurate ETC calculations give stakeholders the transparency they need to feel confident in your project management capabilities.
ETC is closely tied to Earned Value Management (EVM), a project management methodology that combines scope, schedule, and cost performance metrics to assess project progress.
EVM provides the foundational data needed for ETC calculations, including:
Without a solid understanding of EVM principles, project managers may struggle to calculate ETC accurately.
To get the most out of ETC project management, follow these best practices:
ETC is a dynamic metric that should be recalculated as the project progresses. Regular updates make sure your data remains accurate and actionable.
Inaccurate information can lead to flawed ETC calculations, negatively impacting your ability to manage costs and resources effectively.
ETC is most effective when used alongside other EVM tools, such as CPI and EAC.
Project management tools like Accelo can streamline ETC calculations, providing real-time updates and ensuring accuracy at every step.
Share ETC insights with your team and stakeholders to foster collaboration and ensure everyone is aligned on project goals.
The value of ETC extends beyond individual projects. By analyzing ETC data from completed assignments, you can:
For example, if past ETC assessments reveal frequent project budget overruns due to inaccurate labor cost estimations, you can adjust future budgets to account for these discrepancies.
The estimate to complete tool is vital for a project manager, providing the financial insights needed to stay on budget, allocate resources effectively, and deliver successful projects.
By mastering ETC project management, you’ll be better equipped to meet business objectives, mitigate risks, and make data-driven decisions that drive long-term project success.
Ready to take your project management to the next level? With Accelo, you can streamline ETC calculations and gain the insights you need to manage projects more effectively.
