What is cost performance index in SAP SRD-PRO-PMN - PRO-Project Management?

SAP Term: cost performance index

• Component: SRD-PRO-PMN

• Component Name: PRO-Project Management

• Description: The cost efficiency of a project, which is measured as a ratio of earned value to the actual cost.

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• Key Concepts: 
  Cost Performance Index (CPI) is a metric used in project management to measure the efficiency of a project’s performance. It is calculated by dividing the total earned value of a project by its total actual cost. CPI is used to measure the progress of a project and to determine if it is on track to meet its budget and timeline goals. 
  
  How to use it: 
  CPI can be used to measure the progress of a project and to determine if it is on track to meet its budget and timeline goals. To calculate CPI, divide the total earned value of a project by its total actual cost. If the CPI is greater than 1, then the project is on track and meeting its goals. If the CPI is less than 1, then the project is not meeting its goals and corrective action may be needed. 
  
  Tips & Tricks: 
  It is important to monitor CPI regularly throughout the life of a project in order to ensure that it remains on track. Additionally, CPI should be compared with other projects in order to identify areas for improvement and ensure that resources are being used efficiently. 
  
  Related Information: 
  CPI is related to other metrics such as Earned Value Management (EVM) and Schedule Performance Index (SPI). EVM measures the progress of a project against its planned timeline, while SPI measures the progress of a project against its planned budget. Both metrics can be used in conjunction with CPI to provide an overall picture of a project’s performance.