To-Complete Performance Index (TCPI)
TCPI stands for "To-Complete Performance Index." It answers a very practical question: from this point forward, how efficiently do we need to spend our remaining money to hit our target cost? In other words, it is the level of cost performance the team must achieve on the work that is left.
To calculate it in words: take the work still remaining, which is BAC minus EV (the total budget minus the value of work already completed), and divide it by the money still remaining, which is EAC minus AC (your forecast final cost minus what you have already spent). BAC is "Budget at Completion," EV is "Earned Value" (budgeted worth of completed work), EAC is "Estimate at Completion" (your revised total cost forecast), and AC is "Actual Cost" (money already spent).
How to read the result: the number is a ratio compared to 1.0. If TCPI equals 1.0, you must perform exactly on plan for the rest of the project. If it is below 1.0, you have a little breathing room — you can be slightly less efficient and still hit the target. But if it is above 1.0, you must become more efficient than you have been so far, and the higher the number, the tougher that goal becomes.
A project manager uses TCPI as a reality check: it shows whether the remaining budget goal is realistic or a stretch. A TCPI of 1.3, for instance, is a red flag that the team would need to suddenly perform far better than before — often a sign the target needs revisiting.
Think of it like a student who wants a 90% final grade but has been scoring lower on early tests. TCPI is the score they now need on every remaining exam to still reach that 90%. If that required score is higher than anything they've managed so far, it tells them the goal is a real stretch and they'd better rethink or work much harder.
Say your total budget (BAC) is $100,000. Your earned value (EV) so far is $50,000, and your actual cost (AC) is $60,000. You still want to finish for the original budget, so you set EAC to $100,000. Remaining work = BAC − EV = $100,000 − $50,000 = $50,000. Remaining money = EAC − AC = $100,000 − $60,000 = $40,000. TCPI = $50,000 ÷ $40,000 = 1.25. That result of 1.25 means that to still finish at the original $100,000, your team must get $1.25 of value for every $1 they spend from here on — a 25% jump in efficiency. Since you have been running below 1.0 so far, that is a hard target and a clear warning that the original budget may no longer be realistic.
Every PMP formula explained free — plus worked examples and practice in PMP Math, and full timed mocks in the simulator.