What Are Schedule Performance Index (SPI) and ... - Hourly.io

Schedule Performance Index measures the ratio of work completed compared to plan, while Schedule Variance compares the difference between Earned Value and ... Platform Icon CreatedwithSketch. WorkersCompGreatcoveragewithserioussavingsPayrollEverythingyouneedtopayyourpeoplemadeeasyHRSupportYourpersonalexpertsatthereadySeeOurAmazingReviewsFeeltheloveLearnmore Icon CreatedwithSketch. 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Everyprojectyoumanagestartswithadeadlineandaplan.Yourplancanincludeproductiondetailsandintermediatedeadlines,butyoucan’tprepareforthingsoutsideofyourcontrol. ‍Almostnoprojectgoesperfectlyasplanned,butthat’stobeexpected.Whatyouneedtoknowishowfaryourprogressfromyourplanis.MetricssuchasSchedulePerformanceIndexandScheduleVariancehelpyoutellwhetheryourprojectisontracktomeetyouroriginalcommitments,andwhenit’stimetotakecorrectiveactionsorchangeyourtimelineandnotifystakeholders. TheImportanceofTrackingMetricsinProjectManagementProjectmanagementreferstothetasksinvolvedinplanningandmanagingyourresourcestoachieveanendgoal(orproject),suchasaneventordelivery,orproduct. Engineering,construction,andITdevelopmentregularlyhireprojectmanagerstooverseeplanninganddelivery.ImageSourceProjectmanagerscreatetheschedule,delegatetasks,andremoveobstaclestoemployeeproductivity.Theprojectmanagermustalsoupdatestakeholdersonprogressandadjustthebudgetortheschedulewhennecessary.So,projectmanagersneedtomeasurethehealthoftheirprojectssotheycanmakechangestoaprojectthat’sindangeroffallingbehindschedule. EarnedValueManagementTechniquesEveryprojectmanagerhasaccesstoavarietyoftoolsandtechniquesformeasuringandforecasting.ManyofthesetechniquesarelistedintheProjectManagementBodyofKnowledge(PMBOKGuide).We’lldiscussafewmetricsusedinEarnedValueManagement. EarnedValueManagement(EVM)techniques(alsoknownasEarnedValueAnalysis)givemanagersandorganizationstoolstomeasurethecurrentstatusofaprojectanddeterminefutureprogress. EVMhelpstoanswerquestionslike:Areweusingresourcesefficiently?Areweusingtimeefficiently?Howlongwilltheprojecttaketocomplete?Hasourtotalcostestimatechanged?Whereareweexperiencingproblems?ManagerswhouseEVMtechniquescalculateprojectperformanceusingthreevariables:time,cost,andscope(orwork). You’llusethesevariablesforassessingcurrentprojectstatusandforecastingfutureprogress.AssumptionsforEVMBeforegoinganyfurther,youneedtomakesureyourprojectmeetsthefollowingassumptions.Thescope(worktobedone)oftheprojectcanbefullydefined.Theproject’sphaseswillbeexecutedsequentially. ‍Aslongasthetwoaboveconditionsaremet,youcanuseEVManalysisforawidevarietyofprojectsinvariousindustries.ParametersforEVMAnalysisYoubeginEVManalysisbycreatingyourprojectcostbaseline. Tocreateyourbaseline,reviewyourprojectscheduleandestimatethetimeandcostrequiredtocompletetheworkneeded.Projectsarebrokendownintoseveralworkpackages.Aworkpackageisagroupofrelatedtaskswithinaproject.Workpackagesserveasthebuildingblocksforyourtotalproject. Whenyoucreateyourfullbaselineschedule,you’llcalculatethetotalbudgetintendedfortheproject,whichisreferredtoastheBudgetatCompletion(BAC).ImageSourceAfterestablishingyourbaseline,you’llusethefollowingparameterstoperformEVManalysisonanyworkpackageoratanystageduringtheproject.PlannedValue(PV)-Thebudgetallocatedtowardsaspecificworkpackageintheproject.AlsocalledBudgetedCostofWorkScheduled(BCWS).EarnedValue(EV)-Theactualamountofworkcompletedatthetime(orbyaspecificdate).AlsocalledBudgetedCostofWorkPerformed(BCWP).ActualCost(AC)-Actualcostoramountofresourcesusedtocompletetheworkproject.AlsocalledActualCostofWorkPerformed(ACWP).ImageSourceHerearetheformulasforPlannedValueandEarnedValue.PV=PlannedProgress%xBudgetatCompletionEV=ActualProgress%xBudgetatCompletionActualCostissimplytheamountofmoneyyou’vespentatthetimeofyouranalysis.EVManalysisusestheprojectbaselineandthethreeparametersabovetocalculateseveralmetrics. Inthisguide,we’regoingtofocusspecificallyonSchedulePerformanceIndexandScheduleVariance.CalculatingSchedulePerformanceIndexSchedulePerformanceIndex(SPI)isameasureoftheefficiencyofyourschedule.Ittellsyouhowwellyou’restickingtoyourscheduleandhowefficientlyyou’reusingyourtime.TheSchedulePerformanceIndexFormulaSchedulePerformanceIndexistheratioofyourEarnedValuetoyourPlannedValue. YoucancalculateSPIusingtheformula: SPI=EV/PVLet’ssayyouhavethefollowinginformationonemonthintoyourtwo-monthproject.‍TotalPlannedBudget:$10,000Planned%at30Days:50%Actual%at30Days:33.50%ActualCostat30Days:$4,250Inthiscase,yourEarnedValueis$3,350(0.335x$10,000)andyourPlannedValueis$5,000(0.5x$10,000).So,yourSPIwouldbe$3,350/$5,000or0.67. HowtoInterpretSPIValuesYouhaveyourSPImeasurement,nowwhatdoesitmean?AnSPIofonetellsyouthatyouareexactlyonscheduleandusingyourtimeasyoupredicted. AnSPIbelowonemeansyourteamisworkingslowerthanplanned,andanSPIaboveonemeansyourteamisworkingfasterthanexpected.AgoodSPIisequaltoorabove1,meaningyouareonoraheadofschedule.Intheaboveexample,wecalculatedanSPIof0.67,whichindicatesthattheworkisbehindschedule. AnSPIof0.67meansthattheprojectteamonlycompletes0.67hoursworthofworkforeveryhourofplannedwork. SchedulePerformancevsScheduleVarianceWhileSchedulePerformancemeasurestheratioofworkcompletedcomparedtoplan,ScheduleVariance(SV)comparesthedifferencebetweenEarnedValue(EV)andPlannedValue(PV).ScheduleVarianceisameasureofhowmuchyou’veearnedatthispointintheprojecttimeline.Itcanhelpyouunderstandaproject’scurrentcompletionstatus(orthestatusofyourprojectatanyprevioustimeframeyouchoose).  Forexample,ScheduleVariancecanshowyouhowmuchoftheprojectcostyouhaven’ttechnicallymadeyetifyou’rebehindschedule.Ontheflipside,ifyou’reaheadofschedule,you’llseethattoo—inwhichcaseyoumightconsidertakingonnewprojectsorclients.SchedulePerformanceandScheduleVarianceofferdifferentframestolookatsimilarmetrics,andit’simportanttoconsiderboth.SometimestheratiomeasuredbySchedulePerformancemayseembigifyou’reworkingwithsmallnumbers,whichiswhytrackingScheduleVarianceoffersadditionalcontext. Ifyou’reconstantlymonitoringthesemetrics,youcandetermineyouravailability,andyourclientswillbehappyifyoucomeinunderbudgetandaheadoftime. TheScheduleVarianceFormulaScheduleVarianceiscalculatedasthedifferencebetweenyourPlannedValueandyourEarnedValue. SV=EV-PVIfweusethesameexampleasbefore,wehaveanEVof$4,000andaPVof$5,000. So,ourSV=$4,000-$5,000.WehaveaScheduleVarianceof-$1,000. HowToInterpretScheduleVarianceWithScheduleVariance,anegativevaluemeansyou’rebehindschedule,whileapositivevaluemeansyou’reaheadofschedule.AnSVof$0indicatesyouarerightonschedule. Ifyouwanttogetasenseofhowfaroffscheduleyouare,thenyoucancalculateScheduleVariancepercentageas:SV%=SV/PVUsingthevaluesinourexample,wewouldcalculateSV%as-$1,000/$5,000=-0.2. Writtenasapercentage,youcanseethattheprojectis20%behindschedule.WhataboutCostPerformanceIndex(CPI)?Ifyouwanttotrackwhetherornotyouareonbudget,youcanuseCostPerformanceIndex(CPI). MeasuringCPIinaprojecttellsyouyourfinancialefficiencyoreffectiveness.ItistheratioofyourEarnedValue(EV)toyourActualCost(AC). Inmoredetailedterms,CPImeasurestheamountofworkcompletedforeverydollar(orothermonetaryunit)spent. ACPIof1.0indicatestheplanisonbudget.Valueslowerthanonetellyouthattheprojectisoverbudget,andvalueshigherthanonetellyouthatyouareunderbudget. Let'ssayforthisexample,ourEarnedValue(EV)is$3,315andourActualCost(AC)is$4,250,thecalculationwouldbeasfollows: CPI=EV/ACSothatwouldmeanwe'ddivide$3,315/$4,250togetaCPI of0.78.ACPIof0.78indicatesthatyouareoverbudget.Specifically,youhavespentabout22%morethanplannedatthepointofcalculation.Incontrast,ifyoucalculateaCPIof2.0,thismeansthatyou’veonlyspenthalfofthemoneyyouplannedtospendatthispoint. Let’sWrapItUp:HowToUseSchedulePerformanceIndexandScheduleVarianceKeepingaprojectonscheduleisessentialtokeepingyourbusinessrunningandyourstakeholdershappy. Ifdelaysarise,youneedtonotifyyourstakeholdersaheadoftime.That’swhymeasuringprogressandefficiencyareessentialskillsforanyprojectmanager. SchedulePerformanceIndexandScheduleVariancegiveyouasnapshotofyourcurrentprogressandletyouknowifyou’reusingyourtimeefficiently. Keepingyourbusinessontrackmeanstakingcareofeverythingfromprojectmanagementtopeoplemanagementtaskssuchasworkers’comp.DiscoverhowHourlycanhelpyoumanageyourworkers’comppaymentswitheasewhilesavingmoney.OtherNovember9,2021WhatYouNeedToKnowAboutYourRightToRefuseServiceByKatBoogaard6minreadOtherNovember9,202123ImpressiveQuestionstoAskinaJobInterviewByDeannadeBara12minreadOtherNovember9,2021CanIBeFiredForBeingSickTooMuch?ByDeannadeBara5minreadNameEmailAddressThankyou!Yoursubmissionhasbeenreceived!Oops!Somethingwentwrongwhilesubmittingtheform.