Understanding CPI and SPI: The Only 2 Numbers Every Project Manager Needs

Category: Best Practices | Read Time: 6 min | Updated: January 2026

The Two Numbers That Tell You Everything

You've heard of Earned Value Management (EVM). Maybe you've seen formulas like BCWS, BCWP, ACWP. Your eyes glazed over. You're not alone.

Here's the secret: You only need to understand two numbers to know if your project is healthy.

CPI + SPI

· CPI (Cost Performance Index) - Are you on budget?

· SPI (Schedule Performance Index) - Are you on schedule?

That's it. Everything else is detail.

What is CPI? (Cost Performance Index)

CPI tells you: For every $1 you spend, how much value are you getting?

CPI = Earned Value ÷ Actual Cost

= (Value of work completed) ÷ (What you actually spent)

How to Read CPI:

CPI Value	What It Means	Action
CPI = 1.0	✅ On budget	Keep doing what you're doing
CPI > 1.0	🎉 Under budget	Great! You're efficient
CPI < 1.0	⚠️ Over budget	Investigate and correct

Real Example:

· You planned to spend $100,000 for certain work

· The work is now complete

· But you actually spent $115,000

CPI = $100,000 ÷ $115,000 = 0.87

Translation: For every $1 you spend, you're only getting $0.87 of value. You're 13% over budget.

What is SPI? (Schedule Performance Index)

SPI tells you: For every day that passes, how much work are you completing?

SPI = Earned Value ÷ Planned Value

= (Value of work completed) ÷ (Value of work you planned to complete by now)

How to Read SPI:

SPI Value	What It Means	Action
SPI = 1.0	✅ On schedule	Keep doing what you're doing
SPI > 1.0	🎉 Ahead of schedule	Consider reallocating resources
SPI < 1.0	⚠️ Behind schedule	Focus on critical path activities

Real Example:

· By today, you planned to complete $200,000 worth of work

· But you've only completed $180,000 worth of work

SPI = $180,000 ÷ $200,000 = 0.90

Translation: For every day that passes, you're only completing 90% of planned work. You're 10% behind schedule.

The Magic Quadrant: CPI + SPI Together

When you look at both numbers together, you get the full picture:

1. CPI > 1.0, SPI > 1.0

🎉 EXCELLENT

You're winning. Under budget AND ahead of schedule.

Action: Maintain current approach.

2. CPI > 1.0, SPI < 1.0

⚠️ WATCH OUT

Spending efficiently but work is slow.

Action: Add resources (you have budget room).

3. CPI < 1.0, SPI > 1.0

⚠️ WATCH OUT

Work is fast but expensive.

Action: Review cost drivers, negotiate better rates.

4. CPI < 1.0, SPI < 1.0

🚨 TROUBLE

The danger zone. Over budget AND behind schedule.

Action: Recovery plan needed. Escalate to stakeholders.

What "Good" Looks Like

Zone	CPI Range	SPI Range	Status
Green	0.95 - 1.05	0.95 - 1.05	✅ Healthy - within 5%
Yellow	0.90 - 0.95	0.90 - 0.95	⚠️ Warning - needs attention
Red	< 0.90	< 0.90	🚨 Critical - action required
Severe	< 0.80	< 0.80	🆘 Emergency - recovery plan needed

Common Mistakes to Avoid

❌ Mistake 1: Ignoring Early Warnings

Wrong: "It's only 0.95, that's basically 1.0"

Right: Small deviations early become big problems late. A CPI of 0.95 at 20% complete means you'll be 5% over budget at the end—that could be millions of dollars.

❌ Mistake 2: Thinking You Can "Catch Up"

Wrong: "Our CPI was 0.85 last month but 1.15 this month, so we average 1.0"

Right: CPI is cumulative. If you overspent early, you need CPI > 1.0 for the rest of the project to recover. It's mathematically very difficult to recover.

❌ Mistake 3: Looking at Numbers Without Context

Wrong: "Our SPI is 1.2, we're way ahead!"

Right: Check which activities are ahead. If non-critical activities are ahead but critical path is behind, you're still going to be late.

Quick Reference Card

CPI = EV ÷ AC → "For every $1 spent, how much value did I get?"

SPI = EV ÷ PV → "For every day passed, how much work got done?"

Value	Meaning
= 1.0	On target
> 1.0	Better than planned
< 1.0	Worse than planned

See Your CPI and SPI in Nahla

Nahla automatically calculates CPI and SPI from your Primavera P6 or MS Project file:

1. Upload your XER or XML file to nahla.ai

2. View Dashboard - CPI and SPI displayed in the top ribbon

3. Analytics Tab - See Performance Indices chart with trends over time

4. Ask AI - "What is my schedule performance?" or "Show budget performance"

5. Drill Down - Ask "Show me the critical path" or "Show me delayed tasks"

No manual calculations. No spreadsheets. Just upload and understand.

Key Takeaways

1. CPI = Budget health (> 1.0 is good)

2. SPI = Schedule health (> 1.0 is good)

3. Both < 1.0 = Recovery plan needed

4. Small deviations early = Big problems later

5. Check weekly to catch issues before they grow

Nahla is an AI-powered project analytics platform designed specifically for construction and engineering professionals using Primavera P6 and MS Project.

Try Nahla today → nahla.ai