What is the Cost Performance Index?
The Cost Performance Index (CPI) is a crucial metric in project management that helps you measure how efficiently your project is using its budget. Essentially, it compares the planned budget with the actual costs that you’ve racked up so far.
Why is the CPI so important? Because it helps you keep a close eye on your project’s financial health. By monitoring the CPI, you can catch potential cost overruns early on, giving you time to adjust and make informed decisions based on real data. It’s a really helpful way to make sure everything is on track.
The CPI is one piece of a larger puzzle called Earned Value Management (EVM). EVM combines scope, schedule, and cost to give you a complete picture of your project’s progress.
This guide will give you a solid understanding of the CPI, including how to calculate it, what the results mean, and how to use it effectively in project management.