Confused about CPI and SPI? They often sit together in project reports and there’s a good reason for that. But they measure very different things. If you’re unsure how to interpret them, or when one matters more than the other, you’re not alone.
In this article, we’ll cover how to use the metrics, tell them apart and talk about them with confidence. You’ll learn how to use CPI and SPI together to manage your project performance.
Two different performance measures
Cost performance index measures cost efficiency and answers the question: are we getting value for money?
Schedule performance index measures schedule efficiency and answers the question: are we progressing as planned?
As a refresher, when either index is calculated at the value of 1, it means they are performing exactly as planned. Numbers under 1 mean worse performance than expected, so the project is either over budget or behind schedule. Numbers over 1 indicate positive performance, so under budget or ahead of schedule.
As an example:
- CPI = 0.85 → over budget
- SPI = 1.05 → ahead of schedule
You can have a healthy SPI and poor CPI (and vice versa), which is why both are critical as they tell you different things about the project. You need both to interpret earned value properly.
In the example above, the project is over budget and ahead of schedule. That could make logical sense if you’ve delivered more than you planned so far. In a project where CPI is 1.0 and SPI is 0.8, you’re spending exactly as planned, but the project is running behind schedule. That could point to a problem. Using both metrics together gives you a more rounded picture of project performance.
Using the measures for decision-making
The metrics are indicators by themselves, but they are most useful for informing decisions.
CPI tends to inform decisions about:
- Budget adjustments – do we have enough? Should we use the reserves?
- Scope trade-offs – can we pause or stop something to better use our funding?
- Vendor negotiation – can we change our supplier strategy to be more efficient with cost?
SPI tends to prompt discussion about:
- Schedule crashing or fast-tracking – can we go faster?
- Resourcing decisions – do we have the right resources?
- Prioritization changes – how does this project sit against other projects, and would we be faster if we changed that?
In our experience, executives often care more about CPI because it relates to the money, but project teams focus on SPI because they’re all about the delivery.
Remember, context is everything for decision-making. If your cost performance is low but SPI is fine, you may be overspending to stay on time. That might be OK if it’s a conscious and strategic choice, but make sure the senior leadership team know that’s what is happening.
How these metrics trend during the project
Typically, we see commonalties between how SPI and CPI trend during the project lifecycle. SPI tends to flatten or become less meaningful late in the project. That’s not surprising, as there are fewer tasks left, so there’s less time for the team to recover any slippage.
CPI often stays sensitive right to the end because every cost decision still affects outcomes. You could spend a lot in the last few weeks of the project and that could materially affect the final figures.
As a result, it’s helpful to lean into SPI in the early stages or the middle of the project while there is still time to make changes and influence the direction of the project. In the later stages of the project, make sure to focus on CPI for cost control.
Common mistakes when using CPI and SPI
As we’ve seen above, you can’t rely on one metric alone. They come as a pair! Another mistake we see is people assuming a ratio >1 always means something positive. It could signal that a change has been made or a big chunk of scope isn’t being delivered. Context is everything. For example, if SPI is less than 1 it could be because all the ‘easy’ tasks were front-loaded on the plan and have been completed, leaving the risky, complex tasks with vague estimates still to come.
Finally, we sometimes see teams not asking themselves the right questions about why these metrics have diverged. What is causing the variance? Without that, you can’t course-correct and get the project back on track. Ask yourself: “Is our CPI sustainable?” and check in with the team to find out if the SPI is telling the full story of delivery progress.
Reporting to stakeholders
As with all earned value metrics, they can be hard to understand if you aren’t used to them. When you report to stakeholders, avoid jargon: translate the ratios into plain English. That looks like phrasing your reports to show the impact instead of the numbers like this:
- “We’re delivering 95c of value for every $1 spent.”
- “We’re running 9% behind our planned pace.”
Use traffic light (Red, Yellow, Green) reporting or trend lines to show movement over time. And finish reporting with the actions you are taking to investigate the root cause of the variance or to adjust the forecast. If you can’t take action, spell out the decision you need executives to take (like approving additional funding) so what you need from them is clear.
To summarize, CPI and SPI measure different things, and both matter. Context matters even more. These measures will give you a richer picture of how your project is really performing. They aren’t simply metrics for a report, they are there to be used to help you direct the project. Once you’ve understood the figures and the narrative that supports them, they will help you make the right decisions for your project every day.