Here is an uncomfortable fact about classic earned value. On a late project, the schedule performance index drifts back toward 1.0 as the job approaches the finish, no matter how late it is. A project that finishes eight months late reports an SPI of exactly 1.0 on its last day. The indicator is not wrong. It is measuring the wrong thing.
Why SPI goes soft at the end
SPI is earned value divided by planned value, and both are measured in dollars. When all the work is done, earned value equals the budget at completion, and so does planned value. The ratio has nowhere to go but 1.0. In the last third of a late project, SPI flatters you exactly when you need it most.
Earned schedule measures time in time
Earned schedule asks a different question: at what point in the plan should we have earned what we have earned today? If the value earned by the end of month 10 was planned to be earned by the end of month 8, the earned schedule is 8 months.
- SPI(t) is earned schedule divided by actual time. In the example, 8 divided by 10 gives 0.80.
- Schedule variance in time is earned schedule minus actual time: 2 months behind, not a dollar figure nobody can picture.
- An independent duration forecast divides the planned duration by SPI(t). A 24-month plan at 0.80 points to about 30 months.
Unlike classic SPI, SPI(t) does not drift to 1.0 at the end. It keeps telling you the project is late until the day it finishes.
How to put it to work
- Start with a cost-loaded or resource-loaded baseline, so planned value has a real time-phased curve.
- Agree earned value rules per activity type before the first update, and hold to them.
- Report SPI(t) and the independent duration forecast beside the CPM finish date every month.
- When the two disagree, investigate. A CPM date that holds while SPI(t) falls usually means durations are being compressed on paper.
What it cannot do
Earned schedule is a project-level signal. It does not know which work is critical, and a project can earn plenty of value on non-critical work while the critical path stalls. Use it as a lie detector for the CPM forecast, not a replacement for it.
When the schedule says on time and the earned schedule says three months late, believe the one nobody can edit.
Cost and risk lead, AdenTurton
The Earned Value Pulse in the Controls Lab calculates SPI, CPI, earned schedule and EAC on the shared demo schedule. For a live program, our project controls and earned value team sets up the measurement and reports it monthly.
