In earned value analysis, the Estimate To Complete, usually abbreviated ETC, is the expected cost required to complete the project. It is not the overall project budget, rather it is the expenditure from now to the end of the project. It does not include what has already been spent.
Thus, it allows the project manager to compare the funding needs required to finish the project with available funding.
- Estimate to Complete (ETC)
- Estimate at Completion (EAC)
- Variance at Completion (VAC)
- To Complete Performance Index (TCPI)
The ETC can be calculated either for each task or for the whole project. There are two ways to calculate ETC:
- Based on past project performance:
Since each of the input variables (right side of the equation) has been determined prior to this step, the ETC can be calculated either for each task or directly for the whole project.
- Based on a new estimate
This is called a Management ETC. This means that a new estimate of the remaining tasks in the project is performed.
In our example task we will calculate the ETC based on the past performance of the project. Once again, we will add a column to the table for ETC.
ETC = (BAC – EV) / CPI
ETC = ($10,000 – $2,000) / 0.44 = $18,182.
|100||Set up Database||Mar. 1||Mar. 10||$10,000||$3,000||$2,000||$4,500||-$1,000||0.67||-$2,500||0.44||$18,182|
This task is worth $10,000 (BAC) and has already spent $4,500 (AC) . Don’t worry, be happy, right? Wrong. Based on its performance so far you will need another $18,182 to complete it.
Of course there are often unique circumstances which caused this problem or situations which alter the future performance of the project. In these cases a Management ETC (i.e new estimate) is necessary, which is entered into the ETC column. There is nothing wrong with this practice.
To learn more about earned value please try our Earned Value Tutorial.