To-Complete Performance Index (TCPI): Formula and Interpretation for Cost Management

PMBOK v8 Definition

The To-Complete Performance Index (TCPI) is a measure of the cost performance that should 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. The TCPI is the calculated cost performance index that is achieved on the remaining work to meet a specified management goal such as the budget at completion (BAC) or estimate at completion (EAC).

Why It Matters for the Exam

The TCPI appears frequently in PMI exam questions testing your ability to calculate and interpret whether a project can recover to its original budget (BAC) or a revised forecast (EAC). Questions typically present earned value data and ask you to determine if the required performance level is achievable, often combined with risk and time considerations.

Key Points to Remember (for the exam)

• Formula for TCPI (BAC): (BAC − EV) / (BAC − AC) — used when the original budget is still viable
• Formula for TCPI (EAC): (BAC − EV) / (EAC − AC) — used when BAC is no longer viable and EAC has been approved
• Interpretation: Greater than 1.0 = Harder to complete; Exactly 1.0 = Same to complete; Less than 1.0 = Easier to complete
• Key Distinction: TCPI measures future efficiency needed, while CPI measures past efficiency achieved
• Common Confusion: Confusing TCPI with CPI — CPI looks backward (EV/AC), TCPI looks forward (remaining work/remaining funds)
• Critical Judgment: Whether the TCPI level is achievable is a judgment call based on risk, time remaining, and technical performance
• Management Goal: TCPI can target either BAC (original budget) or EAC (revised estimate) depending on project circumstances

Typical PMI Exam Example

A project has BAC = $100,000, EV = $40,000, and AC = $50,000. The TCPI (BAC) is calculated as ($100,000 − $40,000) / ($100,000 − $50,000) = $60,000 / $50,000 = 1.2. This means the project must achieve a CPI of 1.2 on remaining work to stay within the original budget, which is harder than the baseline plan.

PMI Exam Traps

• Trap: Using AC instead of EV in the numerator

• Reality: The numerator is work remaining (BAC − EV), not cost spent (BAC − AC)

• Trap: Confusing TCPI (BAC) with TCPI (EAC) when BAC is no longer viable

• Reality: If BAC is unrealistic, use the approved EAC in the denominator: (BAC − EV) / (EAC − AC)

• Trap: Assuming a TCPI less than 1.0 means the project is in trouble

• Reality: TCPI less than 1.0 means it is easier to complete (more budget remaining than work remaining)

• Trap: Forgetting that TCPI is a forward-looking efficiency measure

• Reality: TCPI does not tell you past performance; it tells you what efficiency must be achieved going forward

Important PMI Connections

Quick Review Questions

1. A project has BAC = $200,000, EV = $120,000, and AC = $150,000. What is the TCPI (BAC), and what does it indicate about completing within the original budget?

2. When should a project manager use TCPI (EAC) instead of TCPI (BAC)?

3. If the TCPI is 0.85, is it easier or harder to complete the project within the authorized budget?

4. What three factors should be considered when judging whether the required TCPI level is achievable?

5. A project's cumulative CPI has fallen below the baseline. According to PMBOK v8, what immediate action should be considered for all future work?

PMBOK v8 Reference

Section 5.8.3 - Work Performance Data and Information (Earned Value Analysis, Table 5-1, Figure 5-24)