Schedule Performance Index (SPI) is a term you might have come across in relation to earned value management methods. If your organization uses earned value to track project performance, you might have to calculate and report on SPI regularly.
But what exactly is it? In this guide to SPI in project management we’ll cover what you need to know about tracking schedule performance in this way.
First, let’s define what the term means.
Here’s a definition of SPI:
SPI measures how much work has been completed on a project compared to how much progress was planned.
It’s a way of comparing how much time you said you’d need to deliver the project against how much time it is actually taking. It’s a useful way of looking at the efficiency and effectiveness of project performance.
What’s the purpose of SPI?
Schedule Performance Index gives you useful information about whether the project is progressing to plan. Of course, you could simply look at the project baseline and do a visual check on a Gantt chart to see whether the project is behind schedule. However, SPI provides a mathematical assessment and a figure that lets you compare and track performance over time.
It’s useful because the SPI number is easy to understand and helps with project communication. You can present a subjective view of progress summed up in a number. That’s something project executives can get behind. In our experience, measuring progress like this helps avoid discussions around alternative ways of interpreting the data. There is one number, one way of viewing progress, and that’s how performance is tracked.
The calculation shows you whether the project is meeting the planned deadlines or not, and if not, how far out progress is. The schedule variance is useful information that acts as an early warning indicator. Watch out for trends in the number as you measure it over time. Then consider what corrective action you can take to ensure the project maintains good progress against the planned schedule.
What do you need to calculate SPI?
To calculate SPI you need:
- The baselined project schedule: use this to work out how much work should have been completed to date (the planned value)
- The baselined project budget: use this to work out the planned cost for the scheduled work
- The actual schedule: use this to work out how much work has actually been completed to date
Those inputs give you the required information for the calculation. The final two costs are used to calculate earned value.
If you’re reading those data points and are concerned that you don’t have accurate ways of getting the data, then that’s your starting point for improving project performance tracking. Think about how you can improve the way planned and actual data are captured for scheduling. You need accurate methods for tracking actual performance, such as timesheets or project management software that enables real-time data capture.
How is SPI calculated?
SPI is presented as a ratio. It’s calculated by taking the budgeted cost of work completed (also known as the earned value or EV) and dividing it by the planned value.
The SPI formula is:
SPI = EV / PV
That gives you a number, which in turn tells you how the project is performing against the anticipated delivery time.
Remember, the SPI measure is only as good as the data used to calculate it. Make sure your project tracking methods are as robust and accurate as possible so you get the most accurate SPI that you can.
What is a good schedule performance index?
An SPI of 1 means that your budgeted cost of work scheduled is the same as the actual cost of work performed: in other words, your project is exactly on schedule. That’s a positive thing!
If your SPI is greater than one, your project is ahead of schedule. The team has managed to complete more activity than was planned in the time.
However, if the SPI of the project is less than one, you’ll want to understand why that is the case. An SPI of less than one tells you that your project is behind schedule. Let’s say the SPI is 0.75. That tells you that for every hour of planned work, the team is only completing 45 minutes of actual work.
This information is useful for planning forward in the project: you may want to look at how estimates were calculated and revise the task duration of upcoming work to allow for the current levels of performance.
As with CPI, it’s important to understand the driving force behind the number. Perhaps a team member has gone off work sick so progress is slower. There could be a range of reasons for the current performance. As the project manager, your job is to understand and then course-correct as far as you can to ensure the project gets back on track. When you have a deep understanding of the data, you can make better decisions about what management actions to take.
How does SPI relate to CPI?
Schedule Performance Index is useful, but it does only tell you about progress measured by time taken. It says nothing about how much money has been spent to get to where you are today. That’s where Cost Performance Index (CPI) comes in.
CPI gives you the other half of the story: it’s calculated in a similar way and tells you how efficient and effective the project has been at delivering on budget.
Together, cost and schedule measures give you a complete view of performance including variances against your anticipated progress. These two numbers offer insights into how the project is going and a way of answering stakeholder questions about what progress looks like and whether the project is on track to complete as per the original plan.
Both SPI and CPI are part of the data set for earned value management: a holistic way of looking at project performance that combines planned budget and schedule with actual performance in a way that allows the team to track and forecast progress.
Earned value analysis is sometimes mandated by contracts because it is such an effective way of tracking and reporting. Are you considering implementing earned value on your projects? It can be complicated to get started so let us know how we can help.