Pocket PMOEarned value management formulas for CPI and SPI
Earned value management translates project progress and cost into objective performance signals. The formulas are simple, but they only help when the underlying baseline and updates are credible.
Core values
Planned value is the budgeted value of work scheduled. Earned value is the budgeted value of work completed. Actual cost is what the completed work has cost so far.
Performance indexes
Cost Performance Index is earned value divided by actual cost. Schedule Performance Index is earned value divided by planned value. Values below 1.0 usually signal pressure.
Variance formulas
Cost variance is earned value minus actual cost. Schedule variance is earned value minus planned value. These measures help explain whether the project is over budget or behind plan.
A worked CPI and SPI example
Take a project with a planned value of 100, earned value of 90, and actual cost of 105. CPI is 90 over 105, roughly 0.86, so each unit of budget is buying less work than planned. SPI is 0.90. Together the two indexes say the project is both late and over cost, and they quantify by how much.
Making EVM stick in status reviews
Report CPI and SPI next to the underlying variance numbers, and pair every index below 1.0 with the corrective action already underway. An index without a response invites debate about the formula; an index with a response moves the meeting straight to the decision that actually matters for delivery.
When simple percent complete is enough
For very small projects, full EVM can outweigh its benefits. The signal to adopt it is the moment status meetings start arguing about whether the project is on track. Objective indexes end that argument and reveal which projects in the portfolio need attention first.
Run the example on your own schedule
Pocket PMO keeps your baseline credible so every CPI and SPI in the status review comes with the variance numbers behind it.