Estimate to Complete. Can Project Forecasting be Accurate?

This article is about perfecting project forecasting accuracy. Specifically, we will be talking about how time tracking ties into Estimate to Complete predictions and lowers the rate of inconsistencies. 

Forecasting is an inevitable part of project management. It gives both the client and the team a rough idea of how the project will flow and the resources it will require. Forecasts are also one of the determining factors when setting deadlines, which feeds into both task prioritisation and expense management. In other words, inaccurate estimates not only affect the completion dates but can also severely impact businesses financially, primarily if they work with a number of external suppliers. This naturally raises a question: can the accuracy rate be raised? 

The answer is positive. While forecasting will never be 100% accurate, there are ways to minimise miscalculations. This comes from spotting, analysing, and understanding patterns. This article will discuss tools and techniques for bringing your Estimate to Complete forecasts to near perfection.

What is Estimate to Complete?

Estimate to Complete, also known as ETC, is project forecasting focused on estimating the resources required to deliver the project. It covers all expenses involved in the process, including worker compensation, supply costs, labour costs, administrative costs, and many others. Some companies also include things like warranties and customer protection.

While other forecasting techniques are equally important, ETC is widely used because the biggest reason projects fail is the insufficient budget. Whether the budget was requested as too small or was exceeded halfway through, its accuracy will strongly dictate the project's success. The tricky part is that the figure is dynamic and changes depending on the information available. 

The Role of Time Tracking in Accurate Forecasting

Time tracking is one of the ways you can enhance project forecasting accuracy. In this section, we will be talking about how the two are related and what additional challenges you may expect to face.

The Connection Between Accurate Time Tracking and Reliable Forecasts

Before we delve into talking about best time tracking practices, we need to define how they relate to forecasts and their reliability. To keep it brief, the more data you collect through logging time, the quicker you will see patterns emerge. The said patterns are the cornerstone that should go into your forecasts as they are repetitive and constant, meaning something you can expect to be there. The more repetition of the said patterns you see, the better you will understand where the fluctuations happen, once again helping you minimise guestimation and drive accuracy. All in all, the more you engage in time tracking and the more diligent you are with it, the quicker it pays off in bettering your forecasts. 

What’s more, it’s not covering the use of time only, despite the title. It also addresses areas like resource distribution, automation options and collaboration opportunities. The patterns that emerge aren’t exclusive to your overall time expenditure when delivering projects. It can also be used to gauge the individual performance of your workers, what tasks your teams typically struggle with, and what areas you may need to prioritise. Having visibility of these factors will naturally enable you to become nearly laser-focused on project forecasting. Not to mention, it opens up the door to improving your business processes.

Time Tracking Challenges Affect Project Estimates

However, time tracking is a process of its own that comes with a set of potential issues and common mistakes. Unless they are addressed and dealt with, they may stretch into affecting project forecasting and its accuracy. The most glaring one would be the issue of inaccuracies when logging the hours as, naturally, you can’t build correct forecasts on incorrect data. But challenges don’t end here. 

Data inaccuracies occur very often due to human factors. Namely, employees forget to log their hours and guesstimate them afterwards or do not track them at all. Common workplace issues such as buddy-punching or absenteeism can also skewer your project forecasting efforts as they are notoriously difficult to spot, let alone address. While time tracking is crucial to solving these problems, it also prevents it from running in a way it can be used for, creating a vicious cycle. But there’s a definite and fail-proof way of breaking out of it. What’s more, it brings on further advantages too. 

Digital Timesheets is a Game Changer

Even though time tracking brings its own challenges, addressing them is relatively easy. In the modern age of digitisation, the market is densely populated with sufficient solutions. Below, we will explain how digital timesheets simplify time tracking and drive forecasting accuracy.

Advantages Over Traditional Methods

The most significant selling point of digital timesheets is their accessibility. Most solutions operate across a variety of devices and only require internet access. Some vendors create separate apps, too, to ease the use of the software across specific devices, making it incredibly convenient for the workers on the go. It also allows your employees to fill in their timesheets on their own terms, for example, while commuting, as opposed to staying additional time at work to log their time in.

There’s also a layer of security. Digital timesheets are harder to tamper with than paper ones simply because they’re not susceptible to environmental damage. Additionally, each employee has their unique login information, guarded by a two-factor authentication system, making it more difficult to share their accounts. In terms of overall data security, digital timesheets are superior, too. Most time tracking tools are built on the cloud, meaning your data is stored encrypted in overseas servers. 

Features of Effective Digital Timesheet Tools 

First and foremost, you need to prioritise the tool's customisation options. The days when every company would utilise the same tool with their basic setup are gone. Off-the-shelf solutions will never be as effective as those you can tune to your company’s unique processes and goals. This is especially true for digital timesheet tools, as businesses usually bill differently. Remember, the tools you employ should adjust to your processes, not the other way around.

The second vital criterion to suggest the time tracking tool offers excellent value for money is its integration list. You want your time recordings to seamlessly tie into everything else you do within the business so you can view the data you collect in different contexts. This will highlight your shortcomings and potential growth opportunities, enabling you to act quickly and improve the accuracy of your project forecasting within the shortest time. Not to mention, integrations bring on automation options, which will save you heaps of time in the long run, too.

Overcoming Common Pitfalls

As crucial as project forecasting is, it’s still very prone to errors, especially when we are talking about methods like estimate to completion. When everything heavily relies on data, minor inaccuracies can lead to major disasters. 

What Makes Project Forecasting Complicated?

The most common pitfall of project forecasting is relying on outdated data. Even if it’s accurate, being timely also plays a massive role in how it will affect the estimate to completion. In other words, to truly get the hang of maximising forecasting accuracy, you need to take into account a plethora of factors to ensure the pristine condition of your data. Needless to say, it in itself is difficult, especially with how much data we’re bombed with on a daily basis. 

Technology is an irreplaceable asset when it comes to ensuring you filter the correct data as it’s incoming as opposed to digging through it manually. Therefore, you won’t strip yourself of the opportunity to act on it right away instead of losing its value to time, further bettering the accuracy of your project forecasting efforts. The ability to remain flexible and adapt fast are both crucial when driving your company’s overall efficiency. It may seem odd for it to be closely connected with forecasting, but the link is there and is essential to nourish.

Summary

Accurate project forecasting is one of the most critical yet trickiest parts of project management. It dictates many components, such as time and cost estimates, on which success depends. The only way to increase accuracy is by detecting and studying patterns. Time tracking is a great way to identify them quickly. However, it also comes with challenges, such as ensuring the data logged is accurate. Not to mention the need to ensure your team is compliant with your time tracking practices. 

The easiest way to achieve that is through using digital timesheets. They are more secure overall in terms of preservation, data safety, and against malpractices. A good timesheet solution enables customisation, giving you an opportunity to shape and adjust it to your company’s goals and existing processes. Integrations with other solutions can generally speed up operations across the entire business. And most importantly, it provides you with timely, filtered data that will maximise the accuracy of your project forecasts.

Ready to elevate your project forecasting? Get in touch.