TCPI (To Complete Performance Index) in Brief

In my PMP Workshops many times project managers share the challenges they have in completely understanding the term TCPI (To complete Performance Index). Often most of the project managers find the concept complex and difficult to apply in a real time scenario. In this article I have attempted to make it simple. Before going into details first let's understand what TCPI is and how it is related to CPI (Cost Performance Index)

What is TCPI?

To-Complete Performance Index (TCPI) is the estimate of cost performance required for the project to meet the project’s budget goal. In simple words TCPI is the Cost efficiency at which you need to run the project in order to be within the budget.

 The two important points to be interpreted from this definition are;

 • If the CPI of your project is equal to or more than one, which means your project is moving within the budge. In this situation you can complete the project within approved budget; i.e. BAC.

 • If the CPI of your project is less than one, which means your project is overshooting the budget. In this situation if the BAC seems unachievable the project manager should negotiate a new budget with the senior management .The new budget will be EAC and now your objective should be to try to complete the project within this new approved budget.

How would you derive the formula for computing TCPI?

 Based on the above two points the formula for To-Complete Performance Index (TCPI) will be;

 TCPI = (Work Remaining)/(Budget Remaining)

 If you’re under budget

 • TCPI = (BAC–EV)/(BAC–AC)

If you’re over Budget

 • TCPI = (BAC–EV)/(EAC–AC)

 

Conclusions

 • If To-Complete Performance Index (TCPI) is less than one, then your project is in good shape.

 • If To-Complete Performance Index (TCPI) is greater than one, then you’ve to perform with better cost performance efficiency than the efficiency at which the work that has been completed.

• And finally if TCPI is equal to one then it’s OK even if you continue to work with same cost performance efficiency.

 
Example:

You have a project to be completed in 12 months and your BAC is $100,000. Three months have been passed and $40,000 is spent but while tracking you found that only 25 % of work is completed so far. As a project manager you know that you can’t improve CPI beyond 1.1.

Based on the above situation do you think it is possible to complete the project in the available budget or you have to re-negotiate with for a revised budget?

 
You can discuss it with me at pankajsh10@yahoo.com