What is SPI in project management?

There are various factors to consider when managing projects. One of the most critical ones is monitoring how efficiently the project progresses compared to the initial plan.

But, how can we identify whether the project is on track or if we need to catch up on work?

Fortunately, there is a metric for monitoring project schedule performance — the schedule performance index (SPI).

In this article, we will explain what the schedule performance index (SPI) is in project management and how to calculate it. 

To ensure all information is easy to digest, we will provide examples of schedule performance index (SPI) value variations. 

Don’t worry — you can make project schedule monitoring almost effortless. 

We will show you how you can have all vital information in one place by using project management software.

Let’s get started.

PSI in Project Management - Cover

What does SPI mean in project management?

A schedule performance index (SPI) measures the conformity of the project’s actual progress to the planned progress.

It is a metric used in earned value management (EVM).

Calculating the schedule performance index can help you assess the accuracy of a schedule and identify how efficiently the project team uses its time.

We also use the schedule performance index (SPI) as a value for the estimate at completion (EAC) calculation.

Estimate at completion (EAC) is the estimated project budget at its completion, and we determine it while the project is ongoing. 

We use the schedule performance Index (SPI) for EAC calculation in a situation when both the cost performance index (CPI) and schedule performance index (SPI) influence the remaining project work.

To avoid any unpleasant surprises that can derail your project, you should check your SPI regularly.

When the schedule performance index (SPI) value indicates the project is behind schedule, calculating the estimate at completion (EAC) helps us determine the amount of money we will actually spend on our project.

As its name suggests, the schedule performance index (SPI) is related to the project schedule.

According to the Australian Institute of Project Management (AIPM), a project schedule “is a timetable that shows the start and end date of all project tasks, how the tasks relate to each other and usually which team members or other resources are responsible for delivery.”

We create the project schedule during the project planning phase.

It is a dynamic document maintained and updated during the project, as changes are inevitable.

The approved project schedule is called a schedule baseline.

We use a schedule baseline as a basis for comparison to the project’s actual results.

How to calculate SPI in project management

The schedule performance index (SPI) is an earned value (EV) ratio to planned value (PV).

To calculate SPI in project management, you should use the following formula:

SPI = EV / PV

First, let’s explain the meaning behind the acronyms used in the SPI formula

TermAbbreviationMeaning
Earned valueEVThe measure of completed work expressed in terms of the budget authorized for it.
Planned valuePVThe budgeted cost for the scheduled work.

To determine the earned value (EV), use the following formula:

EV = % work completed x budget

Then, you should calculate the planned value (PV):

PV = % planned completion x budget

The value of SPI indicates whether your project is on track or if there has been a deviation from the initial plan.

To make it easier for you, we prepared the table interpreting the schedule performance index (SPI) values:

SPI valueMeaning
SPI is greater than 1 A project is ahead of schedule.
SPI is 1 A project is on schedule.
SPI is less than 1 A project is behind schedule.

As you can see, the SPI calculation shows us how close the project work progress is to the original schedule estimate.

Schedule performance index (SPI) examples

As the project progresses, the project schedule is sometimes different from what we originally planned.

There is no universal list of reasons for project schedules falling behind.

Sometimes, gold plating in project management causes delays in the project schedule. Other times, it is a lack of project resources. 

Preventing falling behind schedule is one of the biggest project management challenges.

Almost half of the projects in 2021 were overdue.

More precisely, according to the Pulse of the Profession® report, 55% of global projects in 2021 were completed on time.

Among other things, completing projects on schedule varies depending on the level of project management maturity.

The latest project management statistics reveal that only 39% of low-maturity organizations complete their projects on time, compared to 63% of high-maturity organizations.

Therefore, regularly monitoring your project’s schedule is a step you do not want to skip.

There are three possible SPI variations:

  • SPI less than 1
  • SPI of 1
  • SPI greater than 1

We’ll provide examples for each schedule performance index (SPI) scenario.

Example #1: SPI is less than 1

Suppose you are in charge of planning a nonprofit event for your company.

The project budget is $350,000, and the project team has done 40% of the work against the 50% planned. They have already spent $125,000 on project activities.

Let’s put all the values in the table to have everything we need for SPI calculation in one place.

TermValue
Budget$350,000
Earned value (EV)40% of the work
Planned value (PV)50% of the work
Actual cost$125,000

First, we must calculate the earned value (EV) and the planned value (PV).

EV = % work completed x budget

EV = 40% x $350,000

EV = $140,000

Let’s calculate the planned value (PV) as well:

PV = % planned completion x budget

PV= 50% x $350,000

PV = $175,000

Then, we can use the following formula to find out the SPI value:

SPI = EV / PV

SPI = $140,000 / $175,000

SPI = 0.8

As you can see, the SPI value is less than 1, meaning your project is behind schedule, and the project team has performed less work than it was supposed to at this point. 

Example #2: SPI of 1

Suppose you are managing a small project team working on improving the existing product that the company XY sells on its website.

The project budget is $500,000, and the project team has done 50% of the work against the 50% planned. They have already spent $250,000 on project activities.

TermValue
Budget$500,000
Earned value (EV)50% of the work
Planned value (PV)50% of the work
Actual cost$250,000

First, we need to determine the earned value (EV) and planned value (PV).

EV = % work completed x budget

EV = 50% x $500,000

EV = $250,000

PV = % planned completion x budget

PV= 50% x $500,000

PV = $250,000

Then we can use the following formula to find out the SPI value:

SPI = EV / PV

SPI = $250,000 / $250,000

SPI = 1

The SPI value of 1 indicates that the project is on schedule.

Example #3: SPI greater than 1 

Suppose your project team is working on an interior design project

The project budget is $750,000, and the project team has done 40% of the work against the 20% planned work. They have already spent $300,000 on project activities.

TermValue
Budget$750,000
Earned value (EV)40% of the work
Planned value (PV)20% of the work
Actual cost$300,000

First, let’s find out the earned value (EV) and planned value (PV).

EV = % work completed x budget

EV = 40% x $750,000

EV = $300,000

PV = % planned completion x budget

PV= 20% x $750,000

PV = $150,000

Then, we can determine the SPI for our project.

SPI = EV / PV

SPI = $300,000 / $150,000

SPI = 2

The SPI value of 2 means your project is ahead of schedule and you have performed twice the work you are supposed to have done at this point.

How to monitor schedule performance in project management software

The ugly truth is — missed deadlines are something every project team experiences at least once.

You can monitor project schedule performance in project management software such as Plaky.

We recommend Plaky as it is:

  • Intuitive, 
  • User-friendly, 
  • Highly customizable, and 
  • It offers a free plan, which includes everything you need to start managing your projects.

To start with, create a board within your workspace. It’s simple — click on +Add.

Create a board within a workspace
Create a board within a workspace

You can adjust the newly created workspace to suit your needs. 

Suppose you want to monitor the schedule performance index (SPI) of your marketing initiatives.

Let’s begin with listing all activities. 

Activities in Plaky
Activities in Plaky

Then, we can assign people to activities.

Add assignees in Plaky
Add assignees in Plaky

To track status, add a status column. The status column contains labels you can create, rename, and change their color.

A status column in Plaky
A status column in Plaky

You can create custom statuses for every project.

Then, you can specify:

  • Due dates, 
  • The budget dedicated to every listed activity, 
  • Planned value (PV), and 
  • Earned value (EV).

All these metrics are required for calculating the project’s SPI.

When all is set, your SPI board may look as follows:

Monitoring SPI in Plaky
Monitoring SPI in Plaky

Having all the information in one place will help you better understand whether your initiatives are going as planned or if your teams are ahead or behind schedule.

What’s more, you can check your project on the go, as Plaky is available on iOS, and try ready-made project management templates for different industries and workflows.

💡 Plaky Pro Tip

Using Plaky is quite simple. To learn more, check the following pages:

Wrapping up: Monitor the schedule performance index to identify whether your project is on track

Falling behind schedule and not being aware of it can be dangerous for any project. 

Therefore, you need a metric to help you identify whether your project is on track or if it needs your attention. 

The metric you need is called the schedule performance index (SPI). 

It helps you identify whether your project is on track, ahead of schedule, or behind schedule. 

Make sure to check the SPI value at regular intervals during a project to be able to react timely and get the project back on track.

References

  • Australian Institute of Project Management. (2021, June 22). What is a project schedule? AIPM. Retrieved October 18, 2022, from https://aipm.com.au/blog/what-is-a-project-schedule/
  • Plaky. (2022). Project management statistics (2022). Retrieved October 26, 2022, from https://plaky.com/learn/project-management/project-management-statistics/
  • PMI. (2021). Pulse of the Profession 2021: Beyond Agility. https://www.pmi.org/-/media/pmi/documents/public/pdf/learning/thought-leadership/pulse/pmi_pulse_2021.pdf
  • Project Management Institute Project Management Institute. (2021). A Guide to the Project Management Body of Knowledge (PMBOK® Guide)  Seventh Edition and The Standard for Project Management Retrieved October 17, 2022, from https://www.goodreads.com/book/show/58474625-a-guide-to-the-project-management-body-of-knowledge-pmbok-guide-sev?from_search=true&from_srp=true&qid=pSMKWtm0ef&rank=1
  • Project Management Institute. (2019). The Standard for Earned Value Management. Retrieved October 17, 2022, from https://www.goodreads.com/book/show/45899516-the-standard-for-earned-value-management?from_search=true&from_srp=true&qid=iMx9MFQGVZ&rank=1

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