Projects at Risk Analytics: Key Concepts

Available Risk Reasons

At-Risk Projects and At-Risk Amounts

Costpoint Analytics identifies projects that are at risk based on the risk reasons and tolerances your firm specifies.

For example, suppose that your firm decides to monitor projects to make sure that costs are at or under budget. As part of the configuration process, the system administrator selects Costs over Budget as one of the risk reasons to track in Costpoint Analytics. He sets the tolerance for that risk reason at 10.00 (10 percent of budget).

A project is considered at risk based on this risk reason if inception-to-date costs for the project as of the latest fiscal period in the analysis period are greater than the inception-to-date budgeted costs plus the acceptable risk amount. The acceptable risk amount is the inception-to-date budgeted costs multiplied by the tolerance. Risk is always determined on an inception-to-date basis.

Thus, a project with inception-to-date costs of 10,800 and inception-to-date budgeted costs of 10,000 is not considered at risk for this risk reason because the costs are less than the budgeted costs (10,000) plus the acceptable risk amount (1000). However, a project with costs of 11,500 is at risk.

The at-risk amounts displayed on the Projects at Risk tab are the difference between the two raw values being compared. In this example, if actual costs are 11,500 and budgeted costs are 10,000, the at-risk amount for that project is 1,500. The acceptable risk amount does not affect the calculation of the at-risk amount. It is only used to determine if a project is at risk.

For information on how Costpoint Analytics determines at-risk projects and amounts for each of the risk reasons, see Available Risk Reasons.

Top-Level Projects and Risk-Level Projects

You can filter and analyze risk information by either top-level project or "risk-level" project. A risk-level project is a project at the level of the project structure at which Costpoint Analytics calculates risk. For a billing-based risk reason (Billing Over Contract, for example), Costpoint Analytics calculates risk for projects at the level of the project structure at which the billing formula resides (billing-level projects). For all other risk reasons, Costpoint Analytics calculates risk for projects at the level of the project structure at which the revenue formula resides (revenue-level projects).

Costpoint Analytics only determines at-risk status and at-risk amounts for active (Direct, Inter-Company, or Inter-Co Multi), risk-level projects. If you display and analyze data for top-level projects, the number of at-risk projects shown are the number of risk-level projects for that top-level project that are at risk. Likewise, the at-risk amount for a top-level project for a risk reason is the sum of the at-risk amounts for the risk-level projects associated with that top-level project.

Most filtering of the analytics is also based on risk-level projects. For example, if you filter for one owning organization, the analytics only display data for risk-level projects owned by that organization. This is also true if you filter by project type or customer. However, project manager is an exception. You have the option to filter either by risk-level project manager or by top-level project manager. If you filter by top-level project manager, the analytics display data for all risk-level projects associated with that manager's top-level projects. In that case, risk-level projects with different project managers could be included.

For more information on filtering the analytics by project, see Filter by Project.

Organization and Reorganization Access

The organization access that your system administrator sets up for your Costpoint Analytics user role determines the organizations for which you can view analytic information:

• The Owning Org list does not include organizations to which you do not have access.

• Summarized at-risk amounts for higher level organizations only include at-risk amounts for the organizations to which you have access. As a result, at-risk amounts for an organization may be partial amounts if you do not have access to all lower level organizations below it in the organization hierarchy.

If you select the Reorg option on the User Options tab so that you can filter the analytics by reorganization, the organization access set up for your Costpoint Analytics user role also determines your access to reorganizations:

• The Owning Reorg list does not include reorganizations to which you do not have access.

• You do not have access to a reorganization if you do not have access to any of the organizations mapped to that reorganization.

• You have access to a reorganization if you have access to at least one organization mapped to that reorganization. However, at-risk amounts for a reorganization may be partial amounts if you do not have access to all organizations mapped to that reorganization.

• Summarized at-risk amounts for higher level reorganizations only include at-risk amounts for the reorganizations to which you have access. As a result, at-risk amounts for a reorganization may be partial amounts if you do not have access to all lower levels.

For more information on filtering the analytics by organization or reorganization, see Filter by Organization. For more information on selecting the option to filter by reorganization on the User Options tab, see Organization or Reorganization.

Analysis Period

Your system administrator specifies both the current fiscal period and the number of prior fiscal periods for which data is available. (Costpoint Analytics does not display projects at risk data for future periods.)

For more information on specifying the analysis period, see Specify an Analysis Period.

Year-Over-Year Comparisons

While Costpoint Analytics is not designed to do year-over-year comparisons, you can use the Risks Trended chart and the Risk Comparisons chart to compare values for more than one year.

For example, if you select two complete fiscal years for the analysis period, those charts display trend lines for at-risk amounts across those two years. If you select two fiscal years and just select the first quarter, the charts display trend lines just for the first quarter of each year.

Budget Data

While much of the data presented in Costpoint Analytics comes from Costpoint, the budget data is entered into a Microsoft Excel spreadsheet and loaded into Costpoint Analytics from that spreadsheet file.

Your system administrator can set up and load two types of budgets: a baseline budget and a forecast (or revised budget). If both of those budgets have been loaded, you can use the Budget Type options on the User Options tab to select the one you want to use for your analysis. For more information on this user option, see Budget Type.

Revenue Calculation

Revenue amounts used in Costpoint Analytics can be calculated using either actual or target rates. During the configuration process for Costpoint Analytics, your system administrator selects the option your firm will use. That selection applies to all analytics that either display revenue amounts or use them to derive other values.

For Projects at Risk Analytics, this option affects the revenue- and profit-based risk reasons:

• Revenue over Budget/Forecast

• Revenue over Funding

• Revenue over Contract

• Revenue under Budget/Forecast

• Profit/Gross Profit Under Budget/Forecast

If your firm uses the Interim/Final Rates feature in Costpoint and includes prior year revenue adjustments in the Project Status Report (PSR) reporting tables, revenue amounts may include those prior year adjustments. A Costpoint Analytics configuration option controls whether the adjustments are included and, if they are, which fiscal periods are affected. For more information, see Adjustment Period.

Profit and Gross Profit Calculation

Several options affect the profit-based risk reason:

• User option: Profit Type — Use the Profit Type options on the User Options tab to indicate if you want to use gross profit (project income less project expenses) or profit (project income less all direct and indirect expenses) for the analytics. Depending on your selection, the profit-related risk reason is named either Profit under Budget (or Forecast) or Gross Profit under Budget (or Forecast). For more information on this user option, see Profit Type.

• Configuration option: COM in gross profit — During the configuration process for Costpoint Analytics, your system administrator specifies whether or not cost of money is included in the calculation of gross profit.

• Configuration option: Cost pools in gross profit — During the configuration process for Costpoint Analytics, your system administrator specifies the cost pools that are included in the calculation of gross profit.

• Configuration option: Adjustment Period — If your firm uses the Interim/Final Rates feature in Costpoint and includes prior year cost or revenue adjustments in the Project Status Report (PSR) reporting tables, profit calculations may include those prior year adjustments, depending on how this configuration option is set. If prior year cost or revenue adjustments are included, all profit amounts reflect any applicable prior year adjustments.

Cost Calculation

If your firm uses the Interim/Final Rates feature in Costpoint and includes prior year cost adjustments in the Project Status Report (PSR) reporting tables, cost calculations may include those prior year adjustments. A Costpoint Analytics configuration option controls whether the adjustments are included. For more information, see Adjustment Period.

User Options That Affect Projects at Risk

Your selections on the User Options tab affect the Projects at Risk Analytics in the following ways: