TCPI Meaning: What is the To Complete Performance Index?
The To Complete Performance Index (TCPI) measures the cost performance needed to finish a project within the remaining budget. It is calculated as the ratio of the cost to complete the remaining work to the available budget.
A TCPI above 1.0 means cost efficiency must improve, while a TCPI below 1.0 indicates budget flexibility. Project managers use TCPI to decide whether to control spending or adjust resources to meet financial targets.
Read our Project Controls guide to explore key processes, best practices, and tools for managing project costs effectively.
TCPI Formula: How to Calculate TCPI?
The TCPI formula calculates the cost efficiency needed to complete the remaining work while staying within a defined budget. The calculation differs based on whether the project follows the original Budget at Completion (BAC) or an updated Estimate at Completion (EAC).
There are two common ways to calculate TCPI:
- Use TCPI = (BAC - EV) / (BAC - AC) when using the original project budget (BAC).
- Use TCPI = (BAC - EV) / (EAC - AC) when using a revised budget estimate (EAC).
In this formula:
- BAC (Budget at Completion): The total planned budget for the project.
- EV (Earned Value): The value of the work completed so far.
- AC (Actual Cost): The total amount spent on the project to date.
- EAC (Estimate at Completion): The adjusted forecasted budget based on project performance.
✅ Pro Tip: Use TCPI (BAC) for projects on the original budget. If costs overrun and a new budget is set, switch to TCPI (EAC) for better accuracy.
What Does TCPI Tell You About a Project’s Performance?
A TCPI value helps determine if a project is on track or if corrective measures are needed. A TCPI of 1.0 means the project must continue spending at the current efficiency rate. A TCPI above 1.0 suggests that cost efficiency must improve, while a TCPI below 1.0 indicates that there is some budget flexibility.
The table below provides a reference guide for interpreting TCPI values:
| TCPI Value |
Meaning |
Project Implication |
| Less than 1.0 |
Budget surplus |
The project is under budget, allowing spending flexibility. |
| Exactly 1.0 |
On target |
The project must continue at the current cost efficiency rate. |
| 1.01 - 1.10 |
Slight over-budget risk |
Minor cost adjustments may be needed to stay on budget. |
| 1.11 - 1.25 |
Moderate over-budget risk |
Efficiency improvements and cost-saving measures should be implemented. |
| 1.26 - 1.50 |
High over-budget risk |
Significant corrective action is required to control costs. |
| Above 1.50 |
Critical cost overrun risk |
Immediate cost-cutting and budget reassessment are needed. |
Simply, a TCPI of 1.0 means the project must continue at its current efficiency level to meet the budget. However, a TCPI above 1.1 signals that cost efficiency must improve significantly, or the project may exceed budget. If TCPI is below 1.0, the project is in a favorable position, with budget flexibility available.
Example of TCPI Calculation (A Construction Project Over Budget)
To understand how the To Complete Performance Index (TCPI) works in practice, let’s go through a real-world example of TCPI calculation in a project.
For example: A construction company is building a new office complex. The project's total Budget at Completion (BAC) was $1,000,000, but due to unexpected material price increases and labor shortages, the new Estimate at Completion (EAC) has increased to $1,200,000.
Currently, the project has:
- Earned Value (EV) = $400,000 (value of work completed)
- Actual Cost (AC) = $450,000 (amount spent so far)
- Remaining Work = BAC - EV = $1,000,000 - $400,000 = $600,000
- Remaining Budget (Using BAC) = BAC - AC = $1,000,000 - $450,000 = $550,000
- Remaining Budget (Using EAC) = EAC - AC = $1,200,000 - $450,000 = $750,000
Now, we calculate TCPI using both BAC and EAC to compare the required cost efficiency:
The formula to use for TCPI is: TCPI = Remaining Work / Remaining Budget
1. TCPI Using BAC (Original Budget Target)
TCPI = 600,000 / 550,000 = 1.09
This means the project team must improve cost efficiency by 9% to complete the project within the original budget.
2. TCPI Using EAC (Revised Cost Estimate)
TCPI = 600,000 / 750,000 = 0.80
Since this TCPI is below 1.0, it indicates that the revised budget allows for more flexibility, and the project may not require strict cost-cutting measures.
TCPI vs CPI: Key Differences and When to Use Each
The To Complete Performance Index (TCPI) and Cost Performance Index (CPI) are both crucial Earned Value Management (EVM) metrics, but they serve different functions. CPI measures how efficiently costs have been used so far, while TCPI predicts the cost-efficiency required for the remaining work to stay within budget.
The table below breaks down the key differences between TCPI and CPI:
| Factor |
TCPI (To Complete Performance Index) |
CPI (Cost Performance Index) |
| Purpose |
Predicts future cost efficiency required to stay within budget. |
Measures past and current cost efficiency of project spending. |
| Formula |
(Remaining Work) ÷ (Remaining Budget) |
Earned Value (EV) ÷ Actual Cost (AC) |
| Interpretation |
Values above 1.0 indicate that cost control needs improvement. Values below 1.0 indicate budget flexibility. |
Values above 1.0 mean the project is under budget. Values below 1.0 mean costs are exceeding the budget. |
| Decision-Making Impact |
Helps forecast financial risks and necessary adjustments to stay on track. |
Helps assess past performance to identify cost efficiency trends. |
| Best Use Case |
Used to determine if the remaining budget is enough to complete the project. |
Used to analyze cost efficiency up to the current point. |
CPI tells project managers how well they’ve controlled costs so far, while TCPI tells them how much efficiency they need moving forward.
For example, if a construction project has a CPI of 0.90 (overspending) and a TCPI of 1.15, the project team must increase cost efficiency by 15% to stay on budget.
However, if the CPI is already above 1.0, meaning costs have been well-managed so far, TCPI will likely be lower, showing that the remaining budget is sufficient.
Best Practices for Using TCPI in Project Cost Control
To effectively use To Complete Performance Index (TCPI) for project cost control, project managers must implement structured monitoring and proactive decision-making. Below are the best practices to ensure TCPI helps maintain financial discipline and project efficiency.
1. Use TCPI Alongside Other Earned Value Metrics
- Combine TCPI with CPI (Cost Performance Index) to get a complete picture of cost efficiency.
- Track Schedule Performance Index (SPI) to ensure that cost improvements do not delay timelines.
2. Establish a TCPI Threshold for Risk Management
- Set acceptable TCPI limits (e.g., 1.0–1.1 for healthy performance, above 1.2 as a risk indicator).
- If TCPI exceeds the threshold, conduct cost-saving measures or request budget adjustments.
3. Perform Regular TCPI Recalculations
- TCPI values change as the project progresses, so recalculate after major milestones or unexpected changes.
- Adjust Estimate at Completion (EAC) frequently to ensure accurate TCPI calculations.
4. Address Cost Variance Before It Affects TCPI
- If TCPI (BAC) exceeds 1.1, identify inefficiencies, such as wasteful spending or poor labor productivity.
- If TCPI (EAC) is below 0.9, check if resources are being underutilized and optimize spending.
5. Use Automated Tools for TCPI Monitoring (Pro Tip: Mastt Can Help!)
- Mastt’s cost management features track TCPI in real time, eliminating manual calculations.
- Project dashboards provide a clear view of project variances, helping managers take early corrective actions.
To learn more about identifying risks and managing budget uncertainties, read our Cost Risk Analysis guide on causes, calculations, and proven solutions.
By integrating TCPI best practices into cost management strategies, project teams gain better control over financial risks and ensure that projects stay within an achievable budget without compromising quality or timelines.
