Earned Value Management – SPI & CPI – The Basics

Earned Value Provides multiple metrics based on past performance to calculate future out-turn positions. This article describes Schedule Performance Index and Cost Performance Index.

SPI – Schedule Performance Index is calculated from the baseline profile and performance achieved to date:

SPI = BCWP (EV)/BCWS (PV) or Performance/Baseline

A value of 1.00 indicates that the work is on track against the baseline or planned work. Below 1.00 would indicate that things are behind schedule and above 1.00 indicates an ahead of schedule position.

It is important to note that the SPI will always return to 1.00 on completion whether late, early or on time. Earned Schedule addresses this effect, for more information visit ‘Can You Tell the Time?’ on the Earned Schedule website.

CPI – Cost Performance Index is calculated from the work performed and the actual cost of that work.

CPI = BCWP (EV)/ACWP (AC) or Performance/Actuals

A value of 1.00 indicates that the spend is in line with the work performed, below 1.00 indicates an overspend and above 1.00 indicates an underspend. In other words for every 1.00 hour or unit of currency spent what is the return?

For example a CPI of 0.50 would indicate only 50% of the initial 1.00 invested has been returned, showing an inefficiency of 50%.

Brought to you by http://www.myxacom.com where knowledge is no weight to carry.

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