Lessons · Project management · estimate to complete and TCPI
ETC and TCPI: what is left to spend, and how well you would have to perform
The estimate to complete is EAC − AC, the money still to be spent; the to-complete performance index is (BAC − EV) / (BAC − AC), the CPI the remaining work would need to finish on budget.
Hone is a place to practise a career, one idea a day. This is one of its lessons, written out in full and free to read without an account.
What it is for
The sponsor asks whether the budget can still be met. The remaining work would need a CPI of 1.20 when we have been running at 0.80 is an honest no. TCPI is the number that turns a hope into an arithmetic answer.
How to think about it
ETC: take the forecast and remove what is already spent. TCPI: divide the work remaining (in budget dollars) by the money remaining. Compare it with the CPI so far; if the gap is wide, the budget is a wish.
Worked example
BAC = $200,000, EV = $80,000, AC = $100,000, EAC = $250,000From the earlier status.
ETC = 250,000 − 100,000 = $150,000Still to be spent, if the forecast holds.
TCPI = (200,000 − 80,000) / (200,000 − 100,000) = 120,000 / 100,000 = 1.20To finish on the original budget, every remaining dollar must buy $1.20 of work.
CPI so far is 0.80. Needed: 1.20A 50% improvement in efficiency, with no change to the work. Say so.
Your turn
BAC is $400,000, EV is $100,000 and AC is $125,000. Write the TCPI to finish on budget.
TCPI = (400,000 − 100,000) / (400,000 − )
Solve one, graded on the server
The trap
Computing TCPI against BAC after the budget has been re-baselined to an EAC. Once a new EAC is approved, the denominator is EAC − AC, or the number answers a question nobody is asking any more.