A Beginner's Guide to the Schedule Performance Index - The ...

The schedule performance index is a subset of earned value management (EVM), a popular but controversial technique for measuring project ... TheMotleyFool AboutTheBlueprint ReviewMethodology AdvertiserDisclosure Wemayreceivecompensationfromsomepartnersandadvertiserswhoseproductsappearhere.That’showwemakemoney.Compensationmayimpactwhereproductsareplacedonoursite,buteditorialopinions,scores,andreviewsareindependentfromtheadvertisingsideofTheBlueprintandourobjectivityisanintegralpartofwhoweare.Ourcommitmenttoyouiscompletehonesty:wewillneverallowadvertiserstoinfluenceouropinionofproductsthatappearonthissite. Enteryouremailaddress: Search OurTopPicks Accounting AccountEdgePro AccountEdgeProhasalltheaccountingfeaturesagrowingbusinessneeds,combiningthereliabilityofadesktopapplicationwiththeflexibilityofamobileappforthoseneedingon-the-goaccess. 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Accounting Construction COVID-19 EmailMarketing FieldService HumanResources ITSecurity ITSM Marketing ProjectManagement RealEstate RemoteWork SmallBusiness WomeninBusiness Searchforsoftwareandbusinesstopics: AdvertiserDisclosure Wemayreceivecompensationfromsomepartnersandadvertiserswhoseproductsappearhere.That’showwemakemoney.Compensationmayimpactwhereproductsareplacedonoursite,buteditorialopinions,scores,andreviewsareindependentfromtheadvertisingsideofTheBlueprintandourobjectivityisanintegralpartofwhoweare.Ourcommitmenttoyouiscompletehonesty:wewillneverallowadvertiserstoinfluenceouropinionofproductsthatappearonthissite. SchedulePerformanceIndex101:MeasuringProjectSchedulingEfficiency Thescheduleperformanceindex(SPI)measureshowcloselyyourprojectfollowstheschedule.Inthisguide,wesharesomeexamplesandwhattowatchoutforwhenworkingwithSPI. 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Updated July25,2020 SaveasPDF Theprojectscheduleisacriticalprojecttool.Itcommunicatesmanythings:whichtasksmustbedoneandwhen,theresourcesassignedtoperformtasks,duedates,themilestonestheteamhasachievedandisyettoachieve,andsoon.Aprojectthat’sbehindschedulecancauseaseriesofeventsdetrimentaltoprojectsuccess:TheprojectgoesoverbudgetDeliverablesfailqualitychecksStakeholdersareunhappyEverybodyisstressedThisiswhyprojectmanagers,regardlessoftheprojectmanagementframeworktheyadopt,useanassortmentoftechniquesandtools-Ganttcharts,PERTcharts,theprioritizationmatrix,etc.,—tokeepthingsonschedule.Andthen,there’sthisindicatorcalledthescheduleperformanceindex(SPI),whichmeasurestheproject’sactualperformanceagainsttheschedule.Overview:Whatisthescheduleperformanceindex(SPI)?Thescheduleperformanceindexisasubsetofearnedvaluemanagement(EVM),apopularbutcontroversialtechniqueformeasuringprojectperformance.EVMshowshowtheworkaccomplishedtodatemeasuresagainstthebaselinesestablishedduringtheprojectplanningstage.Bothschedulevariance(SV),alsoanEVMcalculation,andSPImeasurewhetheraprojectisbehind,on,oraheadofschedule.SVgaugeshowmuchtheactualworkisdeviatingfromtheplannedschedule,whileSPIistheratiooftheperformedworktothescheduledwork.Itquantifiesschedulingefficiencyandshows,inpercentageterms,theproject’sstatusvis-a-visthetimeline.Findmoreinfoontheschedulevariancecalculation,plusexamples,inourSVarticlehere.Scheduleperformanceindex(SPI)vs.costperformanceindex(CPI):What'sthedifference?Costperformanceindex(CPI)isalsoanearnedvaluemetric.WhileSPImeasuresschedulingefficiency,CPImeasurestheproject’scostefficiency.It’stheratiooftheworkcompletedtodatetothetotalamountspenttocompletethework.TheCPIformulais:CostPerformanceIndex(CPI)=EarnedValue(EV)/ActualCost(AC)CPI=EV/ACIftheCPIcalculationis:Equalto1:Theprojectisonbudget.Lessthan1:Theprojectisoverbudget.Thevalueoftheperformedworkislessthanthemoneyspent.Greaterthan1:Theprojectisunderbudget.Thevalueoftheperformedworkisgreaterthanthemoneyspent.Tocalculateearnedvalue:EarnedValue(EV)=%ofCompletedWorkxBudgetatCompletion(BAC)EV=%ActualCompletexBACBudgetatcompletionisthetotalprojectbudget.AsfortheAC,getallthecostsassociatedwiththeworkperformed,includinglabor,machinery,travel,softwarelicenses,etc.Costscheduleindex(CSI)Anotherearnedvalueformulaworthmentioningisthecostscheduleindex.Itmeasurestheproject’soverallefficiencyandindicateshowlikelyaprojectthat’sdeviatingfrombaselinesistorecover.It’scalculatedas:CostScheduleIndex(CSI)=CostPerformanceIndex(CPI)xSchedulePerformanceIndex(SPI)CSI=CPIxSPIThefarthertheCSIisfrom1.0,themoreunlikelyaprojectthatislateand/oroverbudgetistorecover.Whatistheformulaforthescheduleperformanceindex?Toillustratetherelationshipbetweenearnedvalueandplannedvalue,whicharenecessaryforcalculatingSPI,takealookatthisgraph:Here,weseethattheperformedwork(earnedvalue)todateisgreaterthanthescheduledwork(plannedvalue).Tocalculateyourproject’sSPIperformance,theformulais:SchedulePerformanceIndex(SPI)=EarnedValue(EV)/PlannedValue(PV)SPI=EV/PVIftheSPIcalculationyieldsavaluethatis:Greaterthan1:Theprojectisaheadofschedule.Lessthan1:Theprojectisbehindschedule.Equalto1:Theprojectisonschedule.Wealreadyknowhowtocalculatetheearnedvalue.Tofindtheplannedvalue,multiplythepercentageofthescheduledworktotheproject’sbudget.PlannedValue(PV)=Planned%CompletexBudgetatCompletion(BAC)PV=%PlannedCompletexBACSoifyourprojectisscheduledfor,say,twoweeksandit’snowexactlyaweeksinceyoustarted,accordingtotheschedule,yourprojectshouldalreadybe50%complete.Let’sconsidersomeexamples.ExampleSPIcalculationNo.1Project#1hasa$5,000budgetandisscheduledfor30days.Todate,50%oftheworkiscomplete,whichisinlinewiththeproject’sschedule.50%oftheworkiscomplete,asscheduled,buttheactualcostis$500morethanplanned.Basedonthefiguresonthesheet,theearnedvalueis:EV=%ActualCompletexBACEV=50%x$5,000EV=$2,500Theplannedvaluetodateis:PV=%PlannedCompletexBACPV=50%x$5,000PV=$2,500SubstitutingEVandPVintheSPIformula,weget:SPI=EV/PVSPI=$2,500/$2,500SPI=1.00SinceSPIisequalto1,theprojectisonschedule.You’regettinganhour’sworthofworkforeveryhouryouputintotheproject.Now,ifyou’rethinking,sure,it’sonschedule,butit’soverbudget,youarecorrect.ButSPIisn’tdesignedtomeasurecostefficiency.That’sCPI’sjob—hence,the“cost”incostperformanceindex.Thisprojectisonschedulebutoverbudget,asindicatedbytheCPI.TocalculateCPI:CPI=EV/ACCPI=$2,500/$3,000CPI=0.83SinceCPIislessthan1,theprojectisoverbudget.Forevery$1youspendontheproject,youget$0.83back.ExampleSPIcalculationNo.2Next,wehavea15-dayprojectona$10,000budget.Three-fourthsoftheprojectisscheduledforcompletiontoday,buttheprojectteamwentaboveandbeyondexpectationsbycompleting80%oftheworkinsteadof75%.Theprojectisearly.Completedworktodateisgreaterthanplanned.Theproject’searnedvalueis:EV=%ActualCompletexBACEV=80%x$10,000EV=$8,000Asforplannedvalue:PV=%PlannedCompletedxBACPV=75%x$10,000PV=$7,500Now,computingforSPI,wehave:SPI=EV/PVSPI=$8,000/$7,500SPI=1.06SinceSPIisgreaterthan1,ourprojectisaheadofschedule.Foreveryhouryouputin,yougetback1.06hours’worthofwork.ButwhatabouttheCPI?TogettheCPI:CPI=EV/ACCPI=$8,000/$8,000CPI=1.00Intermsofcostefficiency,theprojectisonbudget.Yougetadollar’sworthofworkforeverydollaryouspendonit.BasedonourSPIandCPIcalculations,theprojectisonbudgetandaheadofschedule.3tipstoworkwiththescheduleperformanceindexAlthoughusefultomeasureprojectperformance,SPIhaslimitations.It’simportanttokeepthefollowingconsiderationsinmindwhenworkingwithSPI.Tip1:AgoodSPIisn’talwaysgoodSPIcannotdistinguishcriticalfromnoncriticaltasks—meaning,noncriticaltasksthatareaheadofschedulemayobscurecriticaltasksbehindschedule.Therefore,SPImayindicateaprojectismovingatagoodpacewhenitactuallyisn’t.Also,attheendofeveryproject,theSPIisalwaysmarkedas1,regardlessoftheactualcompletiondate.Soevenifyoudelivertheprojectsixmonthsaftertheduedate,SPIwillsayit’sonschedule.Tip2:SPIisonlyasgoodasthedatayoukeepSPIreliesheavilyontheaccuracyofthedatayoufeedit.Ifthedatayou’reworkingoffofisproblematic,e.g.,incompleteworkbreakdownordelayedcostsreporting,thenSPIwon’tbemuchhelp.Garbagein,garbageout.Tip3:SPIshouldn’tbeusedonitsownTogetanaccurateviewoftheproject’sscheduleperformance,SPIvaluesarebestanalyzedalongsideotherprojectmanagementtechniques,particularlythecriticalpathmethod(CPM).Thisway,ifSPIisindicatingonethingandCPManother,digdeeperanduncoverthetruestory.KeepingyourprojectscheduleontrackSPIisjustoneofseveralwaystostayincontroloftheproject’sschedule.Whilenotperfect,it’snodoubtausefultoolforensuringtheprojectfollowsitsdesignatedroadmap.Soyourprojectteamcanmoreefficientlycollaborateonprojectsandbettertrackyourproject’sschedule,considersomeoftheprojectmanagementsoftwareoptionsTheBlueprinthasreviewed.Werateeachoneaccordingtoeaseofuse,features,pricing,andqualityofsupport. 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