TCPI - A Bats and Cats Story
Maybe it was because there weren't quite enough formulas for a PMP student to memorize prior to their exam, but PMI has added another formula for you to add to your exam "dump sheet": TCPI - also known as the To-Complete Performance Index.
TCPI is a comparison of the work remaining to the funds remaining (either in your budget [BAC] or your forecast [EAC]).
Work remaining is equal to your budget at completion (BAC) minus your earned value (EV).
Funds remaining is equal to either your budget at completion (BAC) minus your actual costs (AC) OR your estimate at completion (EAC) minus your actual costs (AC).
TCPI = (BAC-EV) / (BAC-AC) or TCPI = (BAC-EV) / (EAC-AC)
The TCPI provides an indicator as to how "efficient" you will need to be for the remaining project work.
For example:
Devin's $20,000 project is 30% complete. To-date, he has spent $9,000.
To determine the TCPI for Devin's project, he will take the BAC ($20,000) minus the EV ($6,000), which equals $14,000. He will then divide the $14,000 by the BAC ($20,000) minus the AC ($9,000) - or $11,000.
$14,000 / $11,000 = 1.27. This is telling Devin that he needs to work at 27% higher efficiency rate for the remainder of the project. Unlike CPI or SPI, a TCPI greater than one is not "good".
Let's say that Devin's management comes back and adjusts his budget. The new forecast (EAC) is $30,000. Devin will take the BAC minus the EV, as before, which equals $14,000. But now he will divide it by the EAC ($30,000) minus the AC ($9,000) - or $21,000.
$14,000 / $21,000 = .67. This is telling Devin he can take it easy! Plenty of funds remaining - because that always happens...right??
Over the past six months, we have seen an increase in PPM students that are having TCPI questions on the exam. We here at PPM consider any "formula" question an "easy right" - meaning, it's math. You're going to know if you have the right answer. On the PMP exam there are not a lot of "easy rights", so it's definitely worth having the TCPI formula on your dump sheet.
An easy way to remember it?
Bats And Cats Eat Vermin. Bats And Cats Are Cool. (Just remember that they have to eat the vermin before they can be cool!)
Managing to the forecast? Bats And Cats Eat Vermin. Eagles And Cats Are Cool!
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Comments
Thank you, thank you!
I was dreading any of the formulas on the exam. I've been using your blog as a study aide and this one really made the difference for me. (although I think people were looking at me as if I were crazy when I started whispering things about bats and cats!!)
Thank you for all of the information! Very helpful! (And free!!)
Looks familiar!
I took my test yesterday and I actually had two questions on TCPI. Had not seen it in any of the other prep books, so I'm glad it was on your site. I was already nervous - seeing an unknown acronym may have pushed me over the edge.
Good news is that I passed - I am so relieved to have that done.