KEVOS® MAKEOS · Projects
Earned Value Check (Cost and Schedule Variance, CPI, SPI, Estimate at Completion, TCPI)
From the planned value, earned value and actual cost to date, is this project on budget and on schedule, what will it cost at completion, and how efficient must the rest of the work be to finish on budget?
Earned value status of a project at a reporting date: cost and schedule variances, the cost and schedule performance indices, two estimates at completion (current cost efficiency continuing, and cost and schedule efficiency together), the estimate to complete, the variance at completion, the to-complete performance index needed to finish within budget, the per cent complete and a simple forecast duration, against the lowest indices and highest TCPI you accept.
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How this tool works
Inputs, units and where to find them
| Input | Unit | Typical source |
|---|---|---|
| Budget at completion | AUD | Total approved budget for the work, on one GST basis (normally ex GST). |
| Planned value to date | AUD | Budgeted cost of the work scheduled to be done by the reporting date, from the baseline schedule. |
| Earned value to date | AUD | Budgeted cost of the work actually done by the reporting date. |
| Actual cost to date | AUD | Actual cost recorded for the work done, from the cost ledger. |
| Planned duration | months | Planned duration of the whole project. |
| Limits you accept | ||
| Lowest CPI accepted | Lowest cost performance index your organisation accepts before acting. | |
| Lowest SPI accepted | Lowest schedule performance index accepted. | |
| Highest TCPI accepted | Highest to-complete performance index you consider achievable. | |
What each input means
Open an input to see what it is, its units, the worked example and the common mistakes, with a small diagram.
What this means: Budget at completion
- What it is
- The total approved budget for all the work in the project, the figure every estimate at completion is compared with.
- Units and format
- Enter a number in AUD: Australian dollars. The form accepts 0.000001 AUD or more. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 500000 AUD as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Estimates at completion rise in proportion; a larger budget also lowers the TCPI.
- Get it right
- Use the current approved budget including approved changes, on one GST basis throughout.
What this means: Planned value to date
- What it is
- The budgeted cost of the work the baseline schedule says should be done by the reporting date.
- Units and format
- Enter a number in AUD: Australian dollars. The form accepts 0 AUD or more. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 200000 AUD as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A higher planned value lowers the SPI and the schedule variance.
- Get it right
- Read it from the baseline schedule, not the current forecast schedule.
What this means: Earned value to date
- What it is
- The budgeted cost of the work actually completed by the reporting date, measured against the same budget as the planned value.
- Units and format
- Enter a number in AUD: Australian dollars. The form accepts 0 AUD or more. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 195000 AUD as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Raises both CPI and SPI and lowers the estimate at completion.
- Get it right
- Base it on objective progress such as completed milestones or installed quantities, not hours spent.
What this means: Actual cost to date
- What it is
- The cost actually incurred for the work done by the reporting date, including accrued costs not yet invoiced.
- Units and format
- Enter a number in AUD: Australian dollars. The form accepts 0 AUD or more. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 200000 AUD as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- A higher actual cost lowers the CPI and raises the estimate at completion and the TCPI.
- Get it right
- Accrue costs for work done but not yet billed, or the CPI looks better than it is.
What this means: Planned duration
- What it is
- The planned length of the whole project in months, from which the simple forecast duration is scaled by the SPI.
- Units and format
- Enter a number in months: months. The form accepts 0.000001 months to 1000 months. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 12 months as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- The forecast duration rises in proportion.
- Get it right
- Use the baseline duration; it only affects the forecast duration.
Limits you accept
What this means: Lowest CPI accepted
- What it is
- The lowest cost performance index you accept before the project needs corrective action.
- Units and format
- Enter a plain number with no unit. The form accepts 0.01 to 2. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 0.95 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Only moves the pass or fail line for the CPI.
- Get it right
- Set it from your organisation’s reporting rules; this tool does not set a value.
What this means: Lowest SPI accepted
- What it is
- The lowest schedule performance index you accept before the schedule needs corrective action.
- Units and format
- Enter a plain number with no unit. The form accepts 0.01 to 2. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 0.95 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Only moves the pass or fail line for the SPI.
- Get it right
- Set it from your reporting rules; SPI drifts towards 1 near the end of every project.
What this means: Highest TCPI accepted
- What it is
- The highest to-complete performance index you believe the remaining work can achieve, used to judge whether finishing on budget is realistic.
- Units and format
- Enter a plain number with no unit. The form accepts 0.5 to 5. Required: the tool does not calculate until every input is valid.
- Example
- The form opens with 1.1 as a worked example. It is an illustration, not a recommended value: replace it with your own figure.
- Effect on the result
- Only moves the pass or fail line for the TCPI.
- Get it right
- Compare it with the CPI the project has actually achieved; a TCPI far above it is wishful.
Method and formulas
- Cost variance CV = EV − AC; schedule variance SV = EV − PV; CPI = EV ÷ AC; SPI = EV ÷ PV.
- EAC (cost efficiency continues) = BAC ÷ CPI; EAC (cost and schedule) = AC + (BAC − EV) ÷ (CPI × SPI); ETC = EAC − AC; VAC = BAC − EAC.
- TCPI = (BAC − EV) ÷ (BAC − AC), the cost efficiency the remaining work needs to finish on budget; forecast duration ≈ planned duration ÷ SPI.
- Example: CPI 0.975 and SPI 0.975; the project is forecast to cost A$512,820, needing a TCPI of 1.0167.
Limitations
- The indices are only as good as the earned value measurement: percent-complete claims without objective milestones overstate progress.
- SPI in cost terms drifts back to 1 near the end of every project, so the forecast duration is unreliable late in the job.
- Example values are illustrations. Replace them with values for your actual task.
Typical uses
- Report the status of a capital or plant project each month
- Forecast the final cost of a fabrication contract
- Decide whether a project needs a recovery plan
Who it is for
- Project managers
- Project controllers and cost engineers
- Engineering managers
What you get
- Cost and schedule variance
- CPI and SPI
- Estimates at completion and to complete, variance at completion
- TCPI and forecast duration
Interpreting the result
- A TCPI well above the CPI achieved so far means finishing on budget needs a level of efficiency the project has not shown: re-forecast rather than hope.
References
- U.S. Government Accountability Office, GAO-20-195G Cost Estimating and Assessment Guide (2020), chapters 17–19 on earned value management — https://www.gao.gov/products/gao-20-195g
- AS 4817-2006, Project performance measurement using Earned Value (Standards Australia); named for scope only.
Learn the Concepts Behind This Tool
These KEVOS® Library readings explain the method this tool uses, with worked examples.
Method explained here · Library collection
Earned value: what it shows about a job, and what it cannot
In Project Estimates, Schedules and Costs
What it covers: Earned value compares work done with work planned and money spent. How to measure it honestly, read the indices in context and not mistake delivery efficiency for a job worth doing.
Useful alongside · Library collection
Schedule compression and recovery: crashing, fast-tracking and bringing a late project back
In Project Planning and Control
What it covers: When a project slips and the deadline cannot move, panic costs money. How to reschedule first, crash the cheapest critical work, fast-track with care and know when recovery is not worth it.
KEVOS® tools are screening and decision-support utilities. Verify important financial, engineering, safety, legal or operational decisions using appropriate professional standards and your organisation’s approved data.