SPI and CPI thresholds

EP Help General > Tools > Dashboard

The health of a project/activity is assessed using two indices: SPI and CPI.

 

SPI Explained

 

This project management index centers around schedule.

A value of an activity's SPI of less than one means that the project/activity is potentially behind schedule. So if your SPI is 0.8, the project/activity will not finish on time. An SPI of one means that your project/activity will be finished exactly when the plan predicts. A value greater than one means that the project/activity will be completed early. So if your SPI is 1.2, the project/activity will be completed sooner than the plan predicts. The central question that SPI is designed to answer is “When will the project be completed?”

 

CPI Explained

 

This index deals primarily with cost.

A value of CPI less than one means that money is being spent inefficiently on the project. So if your CPI is 0.7, this means that for every $1spent on the project/activity you are getting $0.7 of value. A CPI of one means that your project is exactly on the cutting edge in terms of cost effectiveness. You spent $1 on the project and got $1 of value in return.

A value greater than one means that money is being spent efficiently on the project. So if your CPI is 1.4, this means that for every $1 spent on the project you are getting $1.40 of value.

Cost Performance Index answers the question “We’re spending money on this project, but is what we’re producing worth something?”

 

 

Formulas

 

1. If Hours left = 0:

 

2. If Hours left > 0:

 

 

SPI is calculated using the formula:

where StartDate, EndDate, Progress, EstimatedHours, HoursLeft, and ActualHours are activity parameters, and CurrentDate is the current date.

 

 

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An activity that is started today has SPI=1 even if it has zero progress.

 

 

"Definitely bad" index

 

SPI is 'definitely bad' when the end date is in the past.

 

CPI is 'definitely bad' when Actual Hours > Estimated Hours and Hours left = 0.

 

 

Health color coding

 

The chart explains the color coding being used to show what health a given activity/project has:

 

 

CPI/SPI Values

Color Code

Comment

Both indices are at or above their thresholds

evagreen

Healthy project (when one of the indices is good and the other is unavailable*, or both SPI and CPI are good)

One index is below and the other is above its threshold or N/A.

evayellow

Activity/Project is at moderate risk (CPI is good and SPI is bad, or vice versa)

Both indices are below their thresholds.

evared

Activity/Project is at high risk (both CPI and SPI are below the threshold, or either SPI or CPI is definitely bad (DB))

 

* The conditions under which SPI and CPI are not calculated (not available) are given in the notes below.

 

Calculating CPI and SPI individually

 

Use 'Allow calculating CPI and SPI individually' (Settings > General > Advanced settings > Project Health (Earned Value Analysis) settings) to make sure one of the indices is calculated when the other one is unavailable.

 

 

Threshold

 

The default threshold for both CPI and SPI is 1.

 

The threshold is a value you set to match CPI and SPI against.

 

Generally, the higher the threshold the stricter your requirement for activity cost or schedule performance is.

 

However, setting the thresholds needs to be done with care. For example, 'having a CPI that is very high (in some cases, very high is only 1.2) may mean that the plan was too conservative, and thus a very high number may in fact not be good, as the CPI is being measured against a poor baseline. Management or the customer may be upset with the planners as an overly conservative baseline ties up available funds for other purposes, and the baseline is also used for manpower planning.' (a Wikipedia article on EVA).

 

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If an activity has zero or no Estimated Hours and/or Actual Hours, CPI is not calculated at all. Such an activity is 'green', if its SPI is above the threshold. If SPI is below the threshold, the activity is 'yellow' (at risk) if it is on schedule, or 'red' (troubled) otherwise.

 

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Only activities with the following characteristics are used in the calculation:

 

1. Activity's start date is less than the current date so the activity is current.

 

2. Activity's status is open or equal to open - those with a status equal to completed or on hold are not included in the calculation.

 

The conditions when SPI and CPI are not calculated

 

SPI is not calculated if:

 

 

both start and end dates are in the future.

 

both start and end dates are unavailable.

 

CPI is not calculated if:

 

 

either estimated hours or actual hours is zero.

 

SPI and CPI settings

 

To learn how to set SPI and CPI, refer to EVA settings in the online help.

 

 

 

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