Cost Estimation Alternative
Cost estimation alternatives allow you to plan changes in financial plans once a project is in execution. A cost estimation alternative links a change request to the financial plan. It contains aggregated information about the key performance indicators (KPIs) of overall costs, overall revenues, and margins.
Features
You can mark the status of alternatives as part of the tasks related to the approval process. The status determines the values of the planned cost and the planned revenue in the Project Cost Status
report (corresponds to the Current Budget
and the Original Budget
fields).
Example
An engineering and construction company A executes the construction of a multilevel parking lot for a hotel on a busy street. The owner of the hotel requests company A for a change in the project plan to accommodate the construction of one additional level reserved for electric cars.
Planned cost of the project: USD 2,000,000
Planned cost of the change: USD 200,000
When the cost planning activity for the change request is completed, the system marks the status of the corresponding alternative as Ready for Approval
. This status indicates to the project manager that the alternative is ready for approval. When the approval activity is approved, the system approves the alternative, and the status is transferred to Project Cost and Revenue Planning
. Upon the transfer of this data, the following values are reflected in the Project Cost Status
report:
Planned cost of the project: USD 2,000,000
Approved cost (of the change): USD 200,000
Current budget: USD 2,200,000
When a single plan is active in a master project, you can automatically create cost estimation alternatives at the time of change request creation.