THE SIMPLE PROBLEM OF

SCHEDULE PERFORMANCE

INDICES

Knowing how our project is performing means knowing how our Cost, Schedule and Technical Performance is performing

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Glen B. Alleman

Lewis & Fowler

Keeping on Pace

If the performance of our project is like cycling, then we plan to ride at a known pace –say 20 mph

If our group maintains the target pace of 20 mph they can look at their watches to determine if we’re on pace to complete our 40 mile ride in 2 hours

30 minutes into the ride we’re still all riding as a group. Nice sustainable pace, we’ll make the 40 miles in our planned time – no problems so far

2

Falling off Our Planned Pace

But some of us are starting to get tired. We’re falling off the back of pace line.

Instead of our planned 20 mph, we’ve dropped to 19 mph, still moving along but a gap is starting to open

As time passes this gap is opening further –we’re falling off the back of pace line – and we’re gonna get dropped if we don’t do something soon

We’re Underperforming to our Plan

For the invested effort (ACWP) we’re under delivering value (BCWP)

3

Assessing the Widening Gap

If we keep riding at our 19 mph pace, the gap will continue to open and we’ll soon be all alone

Our planned performance (BCWP) has fallen off the planned pace (BCWS) and we need to do something about it, and we need to do it fast

If we can get back on pace (BCWP) – go back to our planned 20 mph –this will be good, but the gap that opened up will remain (SPI < 1.0)

Our riding group is now far ahead

We’re not falling further behind, but we’re still behind

We’ll need to pick up the pace (SPI > 1.0)

4

Time to Pick Up the Pace

In order to close the gap,

riding at our planned 20 mph

pace is not enough

We have to ride faster – say

a 22 mph pace to close the

gap

Let’s assume we have the strength, skills, stamina, and mental

fortitude to pick up the pace and ride a 22 mph pace to try to

reconnect with the Peloton

Exactly how to do this will require some thought Simply peddle faster – steady increase in effort

Sprint to close the gap on an uphill section

Ride faster down hill

Find someone to pull us to the Peloton in a draft

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Closing the Gap

In order to close the gap,

we need to find the

needed actions to close the

gap that put us back on

pace – 20 mph

But first we need to ride

faster – at 22mph

Both are needed

Close the gap – ride at 22 mph

Once reconnected with the group, keep on planned pace

– maintain 20 mph

Easy in concept – hard in the execution

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RIDING IN A PELOTON IS LIKE

MANAGING A PROJECT WITH

EARNED VALUEThe planned pace is BCWS

The actual pace is BCWP

The effort need to close the gap is TCPI

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Glen B. Alleman

Lewis & Fowler

Earned Value Components8

Budgeted Cost of Work Scheduled

The planned spend rate in hours and / or dollars

Budget Cost of Work Performed

The planned value of the work delivered

When BCWS = BCWP we’re staying with the Peloton

We’re staying on Plan

Actual Cost of Work Performed

The cost in dollars or hours to produce the value

(BCWP)

Simple Cost Performance9

TIME

CO

ST

Planned Cost

Actual Costs

Time

Now

Measuring budget performance is

useful for the financial staff.

But program managers need

insight into the delivery of

techncial value

Earning the Value for the Project

Planned Costs

Earned Value

Actual Costs

Time

Now

TIME

CO

ST

It’s the Earned Value

measurement we’re after.

The EV represents the delivered

value to the customer, not just

the consumption of resources

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Measuring Schedule Performance

Schedule Variance

BC WS:

BC WP:

Of the work scheduled to have done,

how much was it budget for it to cost?

Of the work actually performed,

how much was it budget for it to cost?

SCHEDULE VARIANCE is the difference between work scheduled

and work performed (expressed in terms of budget dollars)

formula: SV$ = BCWP – BCWSexample: SV = BCWP – BCWS = $1,800 – $2,000

SV= –$200 (negative = behind schedule)

SCHEDULE VARIANCE is the difference between work scheduled

and work performed (expressed in terms of budget dollars)

formula: SV$ = BCWP – BCWSexample: SV = BCWP – BCWS = $1,800 – $2,000

SV= –$200 (negative = behind schedule)

Convert SCHEDULE VARIANCE to a percentage

formula: SV% = BCWP – BCWS = SV$

BCWS BCWS

example: SV% = – $200 = –10%

$2,000

Convert SCHEDULE VARIANCE to a percentage

formula: SV% = BCWP – BCWS = SV$

BCWS BCWS

example: SV% = – $200 = –10%

$2,000

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Measuring Cost Performance

Cost Variance

BC WP:

AC WP:

Of the work actually performed,

how much was it budgeted to cost?

Of the work actually performed,

how much did it actually cost?

COST VARIANCE is the difference between the budgeted cost and

the actual cost

formula: CV$ = BCWP – ACWPexample: CV = BCWP – ACWP = $1,800 – $1,900

SV= –$100 (negative = cost overrun)

COST VARIANCE is the difference between the budgeted cost and

the actual cost

formula: CV$ = BCWP – ACWPexample: CV = BCWP – ACWP = $1,800 – $1,900

SV= –$100 (negative = cost overrun)

Convert COST VARIANCE to a percentage:

formula: CV% = BCWP – ACWP = CV $

BCWP BCWP

example: CV% = –$100 = –6%

$1,800

Convert COST VARIANCE to a percentage:

formula: CV% = BCWP – ACWP = CV $

BCWP BCWP

example: CV% = –$100 = –6%

$1,800

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Closing the Gap13

When a gap opens in cost or schedule, it needs to be closed

Knowing the CPI and SPI is necessary but not sufficient

We need to know how much better we must perform to close the gap

Have much faster do we need to ride to get back to the Peloton?

How much more efficient do we need to be for each dollar spent to get back on schedule?

To Complete Performance Index (TCPI)14

The To Complete Performance Index (TCPI) is an

index states how much better we need to perform

to close the gap

The TCPI is an indicator of how our performance

needs to improve to close the gap between the

planned performance and the actual performance

BAC BCWPTCPI

EAC ACWP

Closing the Gap15

If the TCPI is > 1.0 something has to change to stay

on schedule and budget

Reduce scope – do less work (BCWP) for the same

effort

Reduce rework – reduce breakage

Increase efficiency – do more work (BCWP) with the

same (ACWP)

In the End It’s About Staying on Pace

When a gap opens

Getting back on the original plan (pace) is necessary but not sufficient

We have to perform better (faster than plan) in order to close any gaps that opened while we were falling behind

Knowing the level to which we need to perform to close the gap is the To Complete Performance Index (TCPI)

Being able to perform at this level requires we understand what went wrong and how to fix it

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