How to Assess Progress Against Budget
Perform weekly forecasts using TCPI and CPI., Keep track of time using SPI., Compare resource utilization to total resources., Use a software program.
Step-by-Step Guide
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Step 1: Perform weekly forecasts using TCPI and CPI.
Instead of waiting till the last minute to measure the project’s rate of progress versus its total costs, take stock of each week’s accomplishments as you go.
TCPI and CPI are two metrics allowing you to look at weekly progress and its fit relative to the completion of the whole project.CPI stands for Cost Performance Index.
The CPI represents the project’s overall efficiency.
You can calculate it by dividing the Earned Value (EV) by the Actual Cost (AC).
In turn, EV is calculated by multiplying the completion percentage by the Budget at Completion (BAC).
A value greater than one means the project is performing under budget.
A value less than one tells you the project is over budget.
So CPI = EV/AC, where EV =Actual completion % x BAC.
So if your BAC=$100 and you've completed 50% of the project, you'll have an EV of $50.
If you've spent $25, then you'll have a CPI of
2.
TCPI stands for To Complete Performance Index, and it is a metric designed to tell you what you need to do to stay within your budget.
You can calculate the TCPI by dividing the remaining work by the remaining funds.
In turn, remaining work can be calculated by subtracting the EV from the BAC.
A value greater than one tells you that you need to perform at a positive efficiency rate to stay under budget.
A value less than one tells you that you can actually perform at a negative efficiently and still remain within your budget.So TCPI= (BAC-EV)/(BAC-AC).
Using the same numbers as above, ($100-$50)/($100-$25)= .667. -
Step 2: Keep track of time using SPI.
A less technical way of measuring your project’s progress against budget is by simply keeping track of the schedule and how far along you are to completion.
That’s because a project that falls behind schedule usually ends up costing more than is originally forecasted.
Even if you haven’t spent extra money yet, you likely will, as one delay has a ripple effect, causing other delays down the road.SPI stands for Schedule Performance Index.
It measures how well you are adhering to the schedule.
A value greater than one means you’re ahead of schedule and a value of less than one means you are behind schedule.
Calculate SPI by dividing the Earned Value by the Planned Value (PV).
The PV can be calculated by multiplying the planned completion percentage by the BAC.
So SPI = EV/PV; where PV= Planned Completion % x BAC.
Assuming a Planned Completion % of 40%, the SPI would be
1.25, because $50/$40=1.25. , In a general sense, your total resources include everything you have available to complete the project.
But in project management assessments, resources mean hours of work.
Resource utilization can be measured by dividing the total number of hours which could be worked by the total number of billable hours (hours your firm gets paid for) worked.So if your team could be working 100 hours and has only billed 50, that's a resource utilization ratio of 2:1.
You want the ratio to be as close to 1:1 as possible. , While none of these metrics require advanced math skills, it can still be a lot to keep up with.
The easiest way to do so is to use a software program.
There are several options:
Spreadsheets are the cheapest way of keeping track of CPI, TCPI, and other assorted metrics.
However, using a spreadsheet will also be the most labor intensive way of tracking those metrics, because you will have to enter and calculate more data than you would with a more sophisticated program.
There are also dozens of more sophisticated tracking applications and software that can be used to collaborate, track budget, scheduling, resource, and completion metrics, and allow multiple users to input data simultaneously.
MS Project is probably the most famous, but Basecamp, Smartsheet, Liquid Planner, and Wrike are other highly rated options. -
Step 3: Compare resource utilization to total resources.
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Step 4: Use a software program.
Detailed Guide
Instead of waiting till the last minute to measure the project’s rate of progress versus its total costs, take stock of each week’s accomplishments as you go.
TCPI and CPI are two metrics allowing you to look at weekly progress and its fit relative to the completion of the whole project.CPI stands for Cost Performance Index.
The CPI represents the project’s overall efficiency.
You can calculate it by dividing the Earned Value (EV) by the Actual Cost (AC).
In turn, EV is calculated by multiplying the completion percentage by the Budget at Completion (BAC).
A value greater than one means the project is performing under budget.
A value less than one tells you the project is over budget.
So CPI = EV/AC, where EV =Actual completion % x BAC.
So if your BAC=$100 and you've completed 50% of the project, you'll have an EV of $50.
If you've spent $25, then you'll have a CPI of
2.
TCPI stands for To Complete Performance Index, and it is a metric designed to tell you what you need to do to stay within your budget.
You can calculate the TCPI by dividing the remaining work by the remaining funds.
In turn, remaining work can be calculated by subtracting the EV from the BAC.
A value greater than one tells you that you need to perform at a positive efficiency rate to stay under budget.
A value less than one tells you that you can actually perform at a negative efficiently and still remain within your budget.So TCPI= (BAC-EV)/(BAC-AC).
Using the same numbers as above, ($100-$50)/($100-$25)= .667.
A less technical way of measuring your project’s progress against budget is by simply keeping track of the schedule and how far along you are to completion.
That’s because a project that falls behind schedule usually ends up costing more than is originally forecasted.
Even if you haven’t spent extra money yet, you likely will, as one delay has a ripple effect, causing other delays down the road.SPI stands for Schedule Performance Index.
It measures how well you are adhering to the schedule.
A value greater than one means you’re ahead of schedule and a value of less than one means you are behind schedule.
Calculate SPI by dividing the Earned Value by the Planned Value (PV).
The PV can be calculated by multiplying the planned completion percentage by the BAC.
So SPI = EV/PV; where PV= Planned Completion % x BAC.
Assuming a Planned Completion % of 40%, the SPI would be
1.25, because $50/$40=1.25. , In a general sense, your total resources include everything you have available to complete the project.
But in project management assessments, resources mean hours of work.
Resource utilization can be measured by dividing the total number of hours which could be worked by the total number of billable hours (hours your firm gets paid for) worked.So if your team could be working 100 hours and has only billed 50, that's a resource utilization ratio of 2:1.
You want the ratio to be as close to 1:1 as possible. , While none of these metrics require advanced math skills, it can still be a lot to keep up with.
The easiest way to do so is to use a software program.
There are several options:
Spreadsheets are the cheapest way of keeping track of CPI, TCPI, and other assorted metrics.
However, using a spreadsheet will also be the most labor intensive way of tracking those metrics, because you will have to enter and calculate more data than you would with a more sophisticated program.
There are also dozens of more sophisticated tracking applications and software that can be used to collaborate, track budget, scheduling, resource, and completion metrics, and allow multiple users to input data simultaneously.
MS Project is probably the most famous, but Basecamp, Smartsheet, Liquid Planner, and Wrike are other highly rated options.
About the Author
Mary Patel
Creates helpful guides on crafts to inspire and educate readers.
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