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Calculating Net Value

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The highlighted information on this page refers to functionality not yet generally available. It is available only in the Preview Sandbox environment.

Understanding the Net Value of a Project

The Net Value of a project is the total expected value of the project after calculating its benefit and removing the costs. 

The Net Value of a project is calculated using the following formula: 

Project Net Value = Planned Benefit - Budgeted Cost - Potential Risk Cost

The following fields can affect the Net Value of a project:

  • Planned Benefit: This is a manual entry specified by the Project Owner when completing the Project Info area of the Business Case. 
    For more information about the Planned Benefit of a project, see the "Project Info" section in "Creating a Business Case."
  • Budgeted Cost: This is the total cost associated with the project as estimated when you first launch the project. 
    The Budgeted Cost of the project is calculated differently in the production and the Preview Sandbox environments. 
    • In the production environment, the Budgeted Cost of a project is calculated using the Budgeted Labor Cost of the project. The Budgeted Labor Cost is calculated in the Resource Estimates area of the Business Case and it takes into account the hours estimated for your job roles in the Capacity Planner and the Cost per Hour rate of each job role. 
    • In the Preview Sandbox environment, there are two different Budgeted Cost values depending on which Budgeted Labor Cost is used for their calculation: 
      • The Budgeted Cost uses the Budgeted Labor Cost value which is calculated in the Resource Budgeting area of the Business Case and it takes into account the hours budgeted for your job roles in the Resource Planner and the Cost per Hour rate of each job role.
        The Budgeted Cost affects the Net Value of the project. 
      • The Legacy Budgeted Cost uses the Legacy Budgeted Labor Cost value which is calculated in the Legacy Resource Estimates area of the Business Case and it takes into account the hours estimated for your job roles in the Capacity Planner and the Cost per Hour rate of each job role.
        The Legacy Budgeted Cost affects the Legacy Net Value of the project. 
        For more information about how the Budgeted Cost is calculated in the production and the Preview Sandbox environments, see "Calculating Budgeted Cost."
  • Potential Risk Cost: This is the cost associated with any risks on the project, as they are defined in the Business Case, or the Risks tab of the project. 
    For more information about calculating the Potential Risk Cost of a project, see "Calculating Potential Risk Cost."

Locating the Net Value of a Project

You can find the Net Value and the Legacy Net Value for a project in the following areas in Workfront:

  • In Business Case Summary area of the Business Case. 
    For more information about the Business Case Summary area, see the "Understanding the Business Case Summary" section in "Creating a Business Case."
    net_value_and_legacy_net_value_in_business_case_summary_outline.png
  • In the Portfolio Optimizer, when the project is associated with a Portfolio. 
    The sum of all Net Values of all projects in the portfolio adds up to the Net Value of the Portfolio. 
    For more information about the Portfolio Optimizer, see "Understanding the Portfolio Optimizer."

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This is linked to Understanding the Portfolio Optimizer and Creating a Business Case. 

Replace screen shot when it comes to production?!?! Or when will the Legacy fields be retired?! 

Will this be renamed in reporting?!