Monday, March 7, 2011

SPI is not a good index at the end of a project

The Schedule Performance Index, SPI = EV / PV, is commonly used as value to monitor how a project achieves the milestones in a timeline. However, this indicator is less effective when a project nears the end. It is clear that when EV is close to PV, the indicator tends to 1, which is the ideal value. Even when a project is completed late, the SPI indicator always ends in 1.

To understand the problem, consider what happens to the analog index Cost Performance Index, CPI = EV / AC. Clearly, when AC passes PV, ie, there is economic loss, then EV will never reaches or passes AC, and then, if a project ends with economic losses, the CPI indicator is always <1, even after completion project.

To solve the problem, the literature suggests to use a value called Earned Schedule ES. It is possible to find adequate information on the use of this indicator in http://www.earnedschedule.com/.

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