What is To Complete Performance Index (TCPI)?

August 21, 2014
iZenBridge
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  • PMP®
  • Project Cost Management
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‘To Complete Performance Index’ helps us in projecting what cost performance project needs to achieve in order to active the budget targets.

PMBOK® Guide Fifth Edition

The to-complete performance index (TCPI) is –

a measure of the cost performance that is required to be achieved with the remaining resources in order to meet a specified management goal, expressed as the ratio of the cost to finish the outstanding work to the remaining budget.

It’s like if my work is about dispatching books and I have planned to dispatch 100 books in 5 hours, but in the first two hours I have been able to dispatch just 10 books so now I need to dispatch the 90 books in remaining 3 hours in order to achieve the plan of dispatching 100 books in 5 hours. The initial plan was to dispatch 20 books per hour, but now the revised rate is 30 books per hour, which represents the ‘to complete performance index.’ So, the performance, I need to achieve in the next 3 hours represent to complete performance index, in this example I have taken it in forms of work item but in EVM we use the money as measurement of work done and work remaining.

The formula for TCPI is

TCPI = Work Remaining / Funds Remaining

Lets look at what is this work remaining is about, in monetary term Budget at completion (BAC) represent the total value of the work, and the Earned Value (EV) represents the value of completed work in budgetary terms, so work remaining is BAC-EV.

Now fund remaining is all about how much money left in hand for this project? Now here we have two cases, is the original budget is the one we are targeting to, which means, do we need to still install the 100 machines in 5 hours or we have some revised plan? In case of initial budget is still valid , we need to calculate the fund remaining by subtracting amount of money, we have spent, (BAC-AC) from the original budget, the other case we have revised budget for project (EAC), in case of revised budget we can calculate the remaining budget  by subtracting the money spent from revised budget (EAC – AC ).

TCPI = (BAC-EV) / ((BAC-AC) or (EAC-AC))

Now let’s come to the point which triggered this blog, I received a question from one of my students, “when I get question to calculate the TCPI how do I decide that should I use BAC for calculating the fund remaining or should I use EAC?” The answer is simple, having EAC value in question represent that you have done the planning and when you have done the revised plan, you need to consider the EAC only for calculating the fund remaining in such cases.

By now you must be all clear about what is ‘to complete performance index. Also, you have learned the formula on how to calculate TCIP.

You can post follow up questions here on our DISCUSSION FORUM and I would be happy to answer those.

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