Question

Question Relates to Project Management TERMS CPI – Cost Performance Index SPI – Schedule Performance Index SV- Schedule Variance CV- Cost Variance

Question -

Can the CPI and SPI give you a different information about your project that the SV and CV didn’t already give you. I guess what I want to know is if the SV CV are negative result can the CPI AND SPI be 1.0 or greater? Well, the answer to that is straightforward! Right people! Right? The answer is … is what class? WHAT DO YOU THINK? EXAMPLES PLEASE…

Answer 1

To answer the question, we will first analyze the different concepts of the terms:

Cost Variance It is a measure of the difference between the Earned Value and the Real Cost; if this equals 0, the deliverables are costing us what we expected them to cost; if it is less than 0, the deliverables are costing us more than we expected and if it is greater than 1, the deliverables are costing less than we thought.

On the other hand the Schedule Variance. it is a measure that expresses the difference between the Earned Value and the Planned Value; so if it is = 0, the rhythm of the project is the rhythm foreseen in the budget; if it is greater than 0, the pace of the project is faster than budgeted and if it is less than 0, the pace of the project is slower than budgeted

On the other hand, the Cost Performance Index. CPI expresses the "efficiency" in the real costs of the project, comparing the Earned Value (budgeted cost for the work done), versus the Real Cost. If the CPI would be equal to 1, the Earned Value is equal to the Real Cost, we would say that the work has cost the expected. If the Earned Value was less than the Real Cost, it would mean that the work done (Earned Value) has cost more than expected, in which case the CPI would be less than 1; this indicates a performance worse than expected; while a CPI greater than 1 indicates better performance than expected.

Schedule Performance Index compare the EV (Earned Value), that is, the advanced, against the PV (Planned Value) what was planned to advance at a given time.
If the SPI is equal to 1, it means that the deliverable is progressing at the expected rate during the budget. If the SPI is greater than 1, it means that the deliverable is progressing at a rate greater than that foreseen in the budget. If the SPI is less than 1, it means that progress is being made at a worse rate than expected

Once reviewed the concepts we realize that each of the terms have different indices and objectives to analyze so the CPI and SPI if they provide different information on the implementation of the proposed project.