SPI & CPI

Hi, Abdul. Johannes post is completely correct, but to just take it a little further:

1. Earned value analysis is based on cost (or resource usage) and thus its cost/resource usage data is pretty good.
2. Its schedule data, including SPI, is pretty dodgy! It fails to reflect THE most important scheduling factor: is work on or off the critical path? It could be made better by using a separate ALAP baseline for schedule than for cost and by not allowing credit for out-of-sequence work EXCEPT on the critical path -- but almost nobody is doing this.  
3. Nevertheless, the cost predictor which some studies have shown to be the most accurate is the critical ratio CPI: Cost EAC = budget-at-completion divided by (CPI * SPI). This reflects the fact that if the project is BOTH overspending AND late, it'll be overspending for longer than you originally thought!
4. It is usually valuable to track not just budget CPI but labor CPI.
5. CPI (and especially CPI-labor) deterioration is often a leading indicator of SPI deterioration. (Teams can stay on schedule for a while by their fingernails by working extra hours -- but eventually they can't hold the overly-ambitious schedule together and it starts to slip.)

I hope this info is helpful. If you want to explore all this further, I'd recommend ordering my new book Managing Projects as Investments: Earned Value to Business Value, due out from CRC Press in September.

Fraternally in project management,

Steve the Bajan

Hi Abdul

SPI is a Schedule Performance Index  value is expressed as a ratio. SPI = Earned Value Cost/Planned value cost.

A value of less then then one indicates that less work was actually performed than was scheduled.

CPI is Cost Performance Index is expressed as a ration CPI= Earned Value Cost/ Actual cost.

A value less the one indicates that actual costs have exceeded the value of work performed.

The acceptable are different for every schedule. Suggest to  aim for a range of 0.95-1.15 for both cases

Trust this helps

Regards Johannes