Estimate at Completion often confuses people who are new to Earned Value Management (EVM) because there are so many ways to calculate it. So, in this video, I show each of the methods, and explain how each one works and when to use it.
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IEAC stands for Independent Estimate at Completion. I've not used it or seen it used. And it isn't mentioned in my trusty Meredith and Mantell! So, I had to look at the few lines in Wikipedia. According to that source, it sums the components of the EAC calculation. But with little explanation, I surmise that it is a measure of estimated completion cost, based on looking separately at different parts of a project or program. It adds all the actual cost elements, and then adds an estimate to complete (ETC) based on a budget at completion (BAC) minus the sum of the Earned Values of all the same elements, divided by the CPI (Cost Performance Index). So, there is no magic to it. It's just an EAC based on figures for multiple parts. Unfortunately, there is nothing in any of the books on my shelf and little online that I can find. Do take a look at this article blog.humphreys-assoc.com/comparing-the-efficacy-of-ieac-methods/ It seems to be well informed, but, frankly, I am not enough of an expert on EVM to assess it properly.
@@Onlinepmcourses its funny, theres not alot of data about this or TCPI but the executives I deal with put the most emphasis on these two. Thank you for your assistance
That's what I explain in the video - if you need to see it set out in text, onlinepmcourses.com/what-is-estimate-at-completion-eac-video/ Yu will need to understand: 1. some of the other EVA concepts, like BAC and CPI, and 2. some basic high-school-level algebra.
Explaining the different ways to calculate EAC is the purpose of this video. ETC=EAC-AC is correct, but not a helpful formula - more a definition of what ETC is. We only ever know AC right at the end.
Hi Mike, I hope this message finds you well. I'm about to work on my bachelor thesis about the issue of forecasting the EAC. I am working in connection with a big company and I have already noticed that the initial budgets in the projects have to be adjusted again and again because the estimation of the ETC is not going well. Much is based on experience and the gut feeling of the PMs. Now I'm trying to figure out, as you said, how these assumptions can be made accurately so that the PM is able to choose the right "formula". I would really appreciate your tips on literature and sources that explain exactly this problem. Thanks a lot!!
Melek - I'd love to help, but my background in PM is as a working Project Manager, not in academic PM. So, I don't know the references and citations you'll need. You don't say whether you're in a PM course or a more general business course. I'd hope there are some PM academics in your department. If not, you'll need to reach out to academics on other universities. Or conduct your own literature search. While this is something that most students don't do until the level of Masters or Doctoral research, your institution's librarian team will be able to help you. Good luck.
Hey Mike, thanks a lot for your reply. I am already doing a literature research but I noticed that many authors do not address the issue of ETC and the different assumptions about the project progress. Therefore I was wondering if there are any other authors you would recommend. Seems like that I have to figure out in practice. I thank you anyway for your answer! Have a nice weekend:)
@@melekhh5929 I wonder if there is another angle you can take: rather than 'how to make the correct assumptions', how about asking 'what causes assumptions to be rendered incorrect?'
Estimate at Completion often confuses people who are new to Earned Value Management (EVM) because there are so many ways to calculate it. So, in this video, I show each of the methods, and explain how each one works and when to use it.
Thank you for watching.
Please support the channel and all the free content I provide. Like, comment, and subscribe to the channel. And why not join my community, free! Sign-up at onlinepmcourses.com/assets440251/the-onlinepmcourses-newsletter/
And to show maximum appreciation, use the $ Thanks button, under the video, to make a small donation with a highlighted comment.
Mike, I don't know how I passed the exam on this capture. LOL. Great video, keep it up. Thank you.
Thank you - it's my pleasure. Congrats!
can you do a video on iEAC? I understand the formula but would like some real world examples and addressing the multiple formulas
IEAC stands for Independent Estimate at Completion. I've not used it or seen it used. And it isn't mentioned in my trusty Meredith and Mantell! So, I had to look at the few lines in Wikipedia. According to that source, it sums the components of the EAC calculation. But with little explanation, I surmise that it is a measure of estimated completion cost, based on looking separately at different parts of a project or program. It adds all the actual cost elements, and then adds an estimate to complete (ETC) based on a budget at completion (BAC) minus the sum of the Earned Values of all the same elements, divided by the CPI (Cost Performance Index). So, there is no magic to it. It's just an EAC based on figures for multiple parts.
Unfortunately, there is nothing in any of the books on my shelf and little online that I can find. Do take a look at this article blog.humphreys-assoc.com/comparing-the-efficacy-of-ieac-methods/ It seems to be well informed, but, frankly, I am not enough of an expert on EVM to assess it properly.
@@Onlinepmcourses its funny, theres not alot of data about this or TCPI but the executives I deal with put the most emphasis on these two. Thank you for your assistance
I'm new to this concept and confused by ETC=(BAC-EV)/CPI. How is this similar to ETC = EAC-AC?
That's what I explain in the video - if you need to see it set out in text, onlinepmcourses.com/what-is-estimate-at-completion-eac-video/
Yu will need to understand: 1. some of the other EVA concepts, like BAC and CPI, and 2. some basic high-school-level algebra.
ETC=(BAC-EV)/CPI …I'm confused. i know ETC=EAC-AC…
Explaining the different ways to calculate EAC is the purpose of this video.
ETC=EAC-AC is correct, but not a helpful formula - more a definition of what ETC is. We only ever know AC right at the end.
Thanks Phil Collins!
Err? Would that I had his talent.
Hope i can get access to the graph behind you! at 0:41
You can copy my EV diagrams from this article: onlinepmcourses.com/earned-value-primer/
Hi Mike, I hope this message finds you well. I'm about to work on my bachelor thesis about the issue of forecasting the EAC. I am working in connection with a big company and I have already noticed that the initial budgets in the projects have to be adjusted again and again because the estimation of the ETC is not going well. Much is based on experience and the gut feeling of the PMs. Now I'm trying to figure out, as you said, how these assumptions can be made accurately so that the PM is able to choose the right "formula". I would really appreciate your tips on literature and sources that explain exactly this problem.
Thanks a lot!!
Melek - I'd love to help, but my background in PM is as a working Project Manager, not in academic PM. So, I don't know the references and citations you'll need. You don't say whether you're in a PM course or a more general business course. I'd hope there are some PM academics in your department. If not, you'll need to reach out to academics on other universities. Or conduct your own literature search. While this is something that most students don't do until the level of Masters or Doctoral research, your institution's librarian team will be able to help you.
Good luck.
Hey Mike, thanks a lot for your reply. I am already doing a literature research but I noticed that many authors do not address the issue of ETC and the different assumptions about the project progress. Therefore I was wondering if there are any other authors you would recommend. Seems like that I have to figure out in practice. I thank you anyway for your answer! Have a nice weekend:)
@@melekhh5929 I wonder if there is another angle you can take: rather than 'how to make the correct assumptions', how about asking 'what causes assumptions to be rendered incorrect?'
@@Onlinepmcourses another approach or even starting point that should be covered, you are right!