Managing Cost Rules

This section describes how to create and modify cost rules, and how PPM picks up the best matching cost rule for cost calculation.

Overview of cost rules

Why you create cost rules

To calculate cost with sufficient accuracy, you may want to create cost rules for various scenarios.

For example:

  • The cost rate for a resource or a team might be different from another resource or team.

  • The cost rate for a role might vary from year to year.

  • The cost rate for a resource might be different for a contractor than for a full-time employee.

Where cost rules are used

Cost rules determine how PPM calculates costs for the following:

  • Costs shown in time sheets that are ready for approval

  • Forecasted costs as calculated from staffing profiles

  • Actual costs for time logged on time sheets against proposals and assets

  • Planned and actual costs on project work plans, where the time data is rolled up from time sheets, rolled up from the My Tasks portlet, or entered directly on the work plan

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Identify cost factors

You set cost rules based on a range of factors that can be prioritized. Before creating a cost rule, we recommend you identify the factors that drive cost rates, and the order of precedence among them.

Note:  

  • All cost rules are subject to the same cost factors. If you want to make a change to a cost rule that involves rearranging cost factors, keep in mind that any changes to cost factors will affect all cost rules in the system.
  • Not all cost factors apply to all entities at all times. For details, see Cost Factor Applications

To select cost factors and arrange their order of precedence:

  1. Prerequisite: You should have the Manage Cost Factors access grant.
  2. From the menu bar, select Open > Administration > Financials > Change Cost Factors.

    The Change Cost Factors page opens.

    The cost factors Team, Team Type, and Team Specialty are only available when the feature Team Management is enabled.

  3. Add, remove, or rearrange cost factors:

    • Add cost factors by selecting from the Available Columns list and clicking the right arrow icon.

    • Remove cost factors by selecting from the Selected Columns list and clicking the left arrow icon.

    • Reorder cost factors by selecting from the Selected Columns list and clicking the up or down arrow icons.

    Cost factors cannot be removed if they are being used by any cost rule. Cost factors can be added or re-prioritized at any time, and doing so will trigger the recalculation of costs for open lifecycle entities and time sheets.

  4. Click Save or Done.

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Create a cost rule

If Team Management is enabled, PPM uses cost rules for teams to calculate team related costs, such as forecast costs of team assignments. Therefore, if your system has teams in use, you should create both team cost rules and non-team cost rules.

  1. Prerequisite: You should have the Edit Cost Rate Rules access grant.
  2. To create a non-team cost rule, from the menu bar, select Create > Administrative > Cost Rule.

    The Add Cost Rule page opens listing all the selected cost factors except the ones that are particular to teams.

  3. To create a team cost rule, from the menu bar, select Create > Administrative > Team Cost Rule.

    The Add Team Cost Rule page opens listing all the selected cost factors except the ones that are particular to resources.

  4. Provide values for any relevant cost factors.

  5. Select a Currency and enter a Rate amount.

  6. Click the calendar icon and specify an Effective Start date.

  7. Click Create.

See

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Modify a cost rule

You can modify a cost rule by changing its currency, rate, or effective date(s).

Changes to cost factors also modify cost rules. For details, see Identify cost factors.

Since version 9.30, PPM implements the following restrictive measures to ensure the changes to an existing cost rule has no impact to other projects where their time sheets contain a time period that falls into the duration of this cost rule. This prevents changing existing cost values from unwanted recalculation.

Scenario Result
If the effective finish date of an existing cost rate is earlier than the current day (today) You cannot modify the cost rate.
If the effective finish date of an existing cost rate is later than the current day (today), but the effective start date is earlier than today You can only modify the finish date, and the new value for the effective finish date must be later than the current day (today).
If both effective dates of an existing cost rate are later than the current day (today)
  • You can modify all fields of the cost rate (including its currency, rate, and effective dates) are adjustable.
  • Note: If you do need to modify the currency, rate, or effective date(s) for an existing cost rule, regardless of the above restrictive rules, you can still do so by clicking the Modify Existing Rate button on the Edit Cost Rule page. However, always be cautious when you make this decision.

    Action Details
    Open the Edit Cost Rule page of a cost rule
    1. From the menu bar, select Search > Administrative > Cost Rules for non-team cost rules or Search > Administrative > Team Cost Rules for team cost rules.

    2. Provide search criteria into the desired fields and click Search.

      The Search Cost Rules page reloads, displaying the results of the search.

    3. Click the Edit button next to the rule you want to modify.

      The Edit Cost Rule page opens.

    Modify the finish date of a cost rule

    You can only modify the finish date of a cost rule if its effective start date is earlier than today and its effective finish date is later than today.

    1. Click Edit Finish Date to open the Edit Rate window.
    2. Enter the new effective finish date. It must be later than today.
    3. Click Done.
    Modify the currency, rate, and effective start and finish dates of a cost rule

    If both effective dates of the cost rate are later than today, click Edit to open the Edit Rate window.

    If the effective start date is earlier than today and the finish date is later than today:

    1. Click Modify Existing Rates in the top right corner of the Edit Cost Rule page.

    2. If you are fully aware of the impact to other time sheets that contain a time period that falls into the duration of the cost rule and still want to modify it, click OK in the warning dialog.
    3. The Edit Finish Date button becomes the Edit button. Click Edit to open the Edit Rate window.

    Delete a cost rule
    1. From the menu bar, select Search > Administrative > Cost Rules for non-team cost rules, or Search > Administrative > Team Cost Rules for team cost rules.

    2. Enter search criteria into the desired fields and click Search.

      The Search Cost Rules page reloads, displaying the results of the search.

    3. Click the Edit button next to the rule you want to delete.

    4. Click Delete This Rule in the top right corner.

      A dialog box opens, asking you to confirm the deletion of the rule. Deletion of cost rules cannot be undone.

    5. Click Delete.

    Note: If you delete a cost rule, the event cannot be tracked in the cost rule audit trail. However, it is recorded in the database.

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    Recalculate cost after cost rule changes

    After you make changes to cost rules, PPM recalculates cost according to a schedule specified in the Cost Rate Rule Update Service, as described in Cost Calculation Services.

    Note: Changes to cost rules may not take effect immediately. By default, costs are recalculated as needed once every hour. We recommend that changes to cost rules be made after working hours or on weekends, to avoid confusion.

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    How PPM picks up cost rules

    When calculating the cost of a resource, team, or a staffing profile position, PPM uses the rate of the cost rule that is besting matching the resource, team, or the position. Here is how PPM picks up the best matching cost rule for a resource. The case for a team or position is the same.

    1. PPM checks whether the cost rule and the resource contain the same cost factors and whether values of the factors are the same. If yes, the cost factor is considered matching.
    2. PPM calculates the score of each cost rule based on the matching cost factors, and the rule with the highest score is the best matching rule.

      Scenario Calculation
      If a cost rule contains no matching cost factor It is considered not applicable and gets -1 point.
      If a cost rule contains one or more matching cost factors

      PPM assigns 2n points to each matching factor according to its priority.

      For example, if a cost rule contains four cost factors and they are all matching factors,

      • the factor of top priority gets 24 = 16 points;
      • the one of second priority gets 23 = 8 points;
      • the one of third priority gets 22 = 4 points;
      • the last one gets 21 = 2 points.

      The score of this cost rule is the sum of all points its factors get. In this example, it is 16 + 8 + 4 + 2 = 30 points.

      If a cost factor contains no value It is considered as a wildcard factor. PPM assigns 1 point to each wildcard factor.
      If a cost rule is not the default one

      It gets an extra 1 point.

      Therefore, if a cost rule contains the same cost factors with the default cost rule, it gets a higher score than the default one.

      Note: There is at least one matching rule, that is, the default rule which cannot be deleted and whose cost factors are all wildcard factors.

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