SPI Above One on a Late Project
At a portfolio review, a project shows CPI 0.94 and SPI 1.08, and the project manager reports that the project is ahead of schedule. The CPM forecast, however, shows completion six weeks after the baseline. The schedule is cost-loaded, but the planned value curve is heavily front-loaded: 60% of PV was planned in the first four months, while engineering is only 25% complete against a plan of 40%. The project has consumed 55% of its management reserve, and a scope change worth $1.2M has been approved but not added to the cost baseline. The controls lead must explain the contradiction and recommend a corrected reporting approach.
1. Explain how SPI can be 1.08 while CPM forecasts a six-week delay, and recommend a better schedule metric.
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SPI is EV divided by PV at a point in time, so it is sensitive to the shape of the PV curve and to the earned-value measurement rules. If 60% of PV was planned in the first four months, PV is high early. Earning value from equipment deliveries while installation lags can still produce EV above PV at this data date, giving SPI above 1.0 even though physical work is late. SPI also measures cost-weighted work, not time, and cannot show whether remaining work will finish on time.
A better metric is earned schedule: convert EV to the date on the baseline when that value was planned to be earned, then compare earned schedule with actual time to get schedule variance in time and SPI-t. Complement it with the CPM forecast, critical-path delay analysis, and milestone trends. If earned schedule shows the project one month behind, that reconciles better with the six-week CPM slip. The project manager should not describe SPI 1.08 as ahead of schedule without this conversion.
2. What is wrong with the cost and schedule baseline treatment, and what should be done?
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Two baseline-control problems are visible. The approved $1.2M scope change has not been added to the cost baseline, so PV, BAC, and variances are measured against a stale scope; earned value comparisons will be distorted and the change is invisible in performance reporting. The management reserve is not a project contingency to be spent at will: 55% consumption should be authorized through change control, with a risk review and a forecast of remaining reserve.
The controls lead should incorporate approved changes into the performance measurement baseline, or clearly disclose them outside it if governance requires, and report BAC, EAC, VAC, and reserve separately. Recommend a schedule and cost integrated change log, earned schedule for time performance, and a monthly reconciliation between EVM and CPM. Also check whether the front-loaded PV reflects the actual planned sequence; if not, correct the baseline loading before drawing conclusions.