Knowing the Score

Two of the best known indicators of project performance are probably the SPI, or Schedule Performance Index, and the CPI or Cost Performance Index. These two indicators have been popularized due to their description in the PMBOK® and other project management sources. These indicators are key sources of information on two of the most important project performance areas: schedule performance and cost performance. There are many more areas of project performance that the project manager must monitor to assess project health but when you are reporting progress to your sponsor, they are unlikely to be enthused over the quality of the software produced if the project is 50% behind schedule and 50% over budget! The point here is that these 2 indicators are more basic than the others.

These indicators are also valuable sources of information because of the data available to create them. First of all, let's take a moment to review how these indicators are calculated. Those of you already familiar with the calculation can skip to the next paragraph. The Schedule Performance Index is calculated by comparing the amount of scheduled work completed with the amount you planned to complete: Budgeted Cost of Work Performed/Budgeted Cost of Work Scheduled. An index greater than 1.0 indicates a project ahead of schedule, an index of less than 1.0 indicates one that is behind schedule. CPI is calculated by comparing the budget for the work performed against the actual cost of that work: Budgeted Cost of Work Performed/Actual Cost of Work Performed. A CPI of greater than 1.0 means the project is under budget and a CPI of less than one means it is over budget.

The data from which these indicators are calculated is available from your scheduling tool. The tool is used to create the project's Work Breakdown Structure (WBS), project activities are assigned to the work packages and activities are scheduled with a start and finish date. The schedule is updated with project information as work is completed. Work that is finished is marked as 100% complete. Updates beyond that will depend on the tracking approach you choose.

The simplest approach to partially completed work is to ignore it. The activity is either 100% complete or 0% complete. This is the easiest method to administer because it does not require you to make difficult assessments. This approach may be practicable where work is broken down into activities that take a day to complete at maximum. In that case you won't be missing a great deal of work when only including activities that are 100% complete. If the activity in question is a 4 hour activity discounting it, even when it is 90% complete only skews the total by a little more than 3.5 hours - not much in a project with a total of thousands of man hours of work. Skewing will increase as the number of partially completed activities mounts, or if those activities account for days or weeks worth of work.

Accounting for partially completed work only becomes an issue when that work has a planned or forecast completion date before the reporting date. Activities to be completed after this date will not be included in the "Budgeted Cost of Work Scheduled" category. Work that has fallen behind schedule is not always 100% behind and reporting the amount of work completed on an activity that is behind schedule increases the accuracy of your reporting.

Where the size and complexity of the project does not allow for defining activities of under a day in duration, you should consider reporting partially completed tasks. Knowing the amount of work that has been completed, compared to the total amount to be done, is tricky. The easiest way is to have the owner of the task report progress to you in the same way the tracking tool represents it, as percentage complete. Unfortunately, this will also yield the least accurate estimate. The owner of the task will want to present the most optimistic case. You know the scenario, you ask for an estimate and get a "90%" complete. You ask at the next reporting period and you get a "95%" complete. The approach that will yield the most accurate data is one that measures a concrete, verifiable deliverable. This could be the number of lines of code, the number of tests executed, the number of feet of flooring installed, or some other metric but it should be something that is tangible. You should verify that the claimed work has been done. Have the lines of code been checked into the library? Have they been counted? Do they meet the criteria established for code? Has the code been unit tested? etc. Code that has not been checked into the library, tests that have not been reported, or flooring that is not installed don't get counted. The method you choose should one that meets the two criteria: verifiable and measurable, and should add a minimum of overhead to your project to support.

The lengths you go to make your reporting accurate should also be commensurate with your stakeholders need for accuracy. If the stakeholders express a need for accuracy to within +/- 1%, they shouldn't object to your requirement that the extra time spent managing partially completed code in the library, or tracking tests as they are completed. On the other hand, if the need for accuracy is within 10% the extra care in validation is not warranted.

The work to include in your budgeted cost of work scheduled will include any work with a forecast, or planned completion date falling on or before the reporting date. It should also include work that was planned to be partially complete by the reporting date. There is no need to include work that should be partially completed, unless you plan to add partially completed work to the Budgeted Cost of Work Performed. For example, where you are 1 week into an activity scheduled to take 2 weeks, your BCWS would include the 1 week. If the activity is indeed 50% complete then the BCSP would be incremented by 1 week to offset the 1 week added to the BCWS. A level of completion above or below 50% would shift the SPI.

The decision on how to handle partially completed work should be made in concert with the decision on how to handle scheduled work. If you plan to report on work that is partially completed, before its scheduled completion date, include the portion of that work that you had planned to complete by the reporting date. If you do not include partially completed work due on a future date in your BCWP, then there is no need to include the scheduled portion of that work in the BCWS (or indeed any work whose due date is in the future).

The Actual Cost of Work Performed and Budgeted Cost of Work Performed should be approached in the same way. Don't include partially completed work, due future, in the ACWP category if you won't be including partially completed work (due in the future) in the BCWP category.

It is important to set expectations around the accuracy of your reporting. Educate your stakeholders in the mysteries of performance reporting and then inform them of the source of your information, how it is collected and extracted, and how you calculate the various indicators. Don't neglect to provide your stakeholders with an indication of the accuracy of your indicators, and don't forget to discount them yourself when assessing your project progress. Your project progress reporting will become much more transparent when your audience understands what you are telling them, how you collected the information, and its accuracy.