Saving Time and Money: How to Make a Schedule Performance Index Work in a NetSuite ERP

Your company must eliminate inefficiencies and manage time to reach its full potential. The right software and analytics can help.

Understanding a Schedule Performance Index

SPI measures schedule efficiency and expresses it as the ratio of earned value (EV) to planned value (PV). Project managers use it to determine whether their projects are ahead, on, or behind schedule.

“At the core, the SPI gives insight into the accuracy of the predicted schedule compared to the actual schedule of the project,” the Project Management Academy explains.

This metric is a critical component of Earned Value Management (EVM) methodology, which uses quantitative data—such as schedule, cost, and scope—to measure project performance and progress and allow companies to change course if needed. 

Formula

The formula for SPI is simple and based on two elements.

• Earned Value (EV) is the value of work actually performed up to a certain point.
• Planned Value (PV) is the value of work that was scheduled to be completed up to that same point.

Calculating SPI is a simple matter of division: SPI = EV / PV. The quotient indicates your project’s progress.

• SPI > 1: Project is ahead of schedule.
• SPI = 1: Project is on schedule.
• SPI < 1: Project is behind schedule.

Example

Imagine you’re managing a website redesign project. Your team has completed $60,000 worth of work, but according to the schedule, $75,000 should have been completed by now.

60,000​/75,000=0.8

Unfortunately, a 0.8 SPI means your project is behind schedule. Consequently, you need to hold a team meeting to examine the delays and reallocate resources to critical tasks. Addressing issues early can bring the SPI back to 1.0 within a few weeks, putting the project back on track.

Why is SPI Important?

SPI answers the crucial question: "Are we on schedule?" 

At first, this measurement may seem unnecessary because you can simply look at your numbers and determine whether production has fallen behind. However, quantifying schedule performance offers a clear, objective measure that supports decision-making and forecasting. Its benefits include:

1. Clear Visibility: SPI offers a snapshot of the project’s health in terms of schedule, making it easier to spot delays or ahead-of-schedule progress.
2. Objective Assessment: It provides an unbiased view of the project's timeline, free from personal or subjective opinions. You know precisely how ahead or behind you are instead of relying on a vague impression of the progress.
3. Proactive Management: With SPI, managers can identify trends early and take corrective actions before minor issues become major problems.

The index can be a crucial analytic since time management is a primary issue for many companies and their staff. According to a 2022 Timewatch study, 38% of surveyed people said they spend up to an hour per workday on unimportant tasks. Another 32% wasted up to 2 hours, and 17% wasted two or three hours. VoucherCloud says a worker is normally productive for 2 hours and 53 minutes daily on average.

Inefficiency at the employee level can easily translate to time management issues for entire projects. In fact, the on-time project completion rate hovered around 50% from 2011 to 2020, according to The Project Management Institute.

Many companies now use project management software, including ERP systems, to handle inefficiency issues. ERPs like NetSuite allow companies to track projects in real time, increasing SPI accuracy so leaders can make better decisions.

SuiteDynamics experts can explain the software during your free consultation. You can even request a demonstration to understand how NetSuite can save your company time and money. 

Practical Tips for Using SPI Effectively

SPI is a powerful tool for executing a project—you just need to know how to use it. Follow a few tips to get the most from the metric.

1. Regular Monitoring: Regularly calculate and review SPI to stay informed about your project’s schedule status.
2. Communicate Clearly: Use SPI to convey your project status to stakeholders. Visual aids like charts or dashboards can help clarify the message.
3. Adjust Plans Proactively: If SPI shows the project is behind schedule, consider adjusting resources or re-prioritizing tasks to get back on track.
4. Combine with Other Metrics: Pair SPI with your Cost Performance Index (CPI) to create a more comprehensive view of project performance.
5. Connect SPI with Overall Objectives: According to Google research, 95% of leading marketers believe that marketing analytics and KPIs must be linked to broader business goals before they really matter.

“Fundamentally, the most effective KPIs are closely tied to strategic objectives and help to answer the most critical business questions,” Prashanth Southekal writes in a piece for Forbes.

Therefore, SPI should be synced with revenue growth, customer satisfaction, and operational efficiency objectives. If your company wants to increase market share, you must ensure timely project completion (reflected by a high SPI) to successfully launch products ahead of competitors.

Implementing SPI in NetSuite ERP

As a comprehensive cloud-based business management suite, a NetSuite ERP system offers robust project management tools that SuiteDynamics experts can customize to include SPI for enhanced project performance tracking. Here’s how businesses can integrate and use SPI within the platform.

Step 1: Set Up Project Management in NetSuite

Ensure your NetSuite environment is configured for project management. Enable the Project Management and Advanced Project Tracking modules and assign appropriate roles and permissions to project managers and team members.

Step 2: Define Project Tasks and Milestones

Break down your project into tasks and milestones with start and end dates so you can calculate Planned Value (PV). Use NetSuite's task management features to create and assign tasks. Then, set up milestones to mark significant points in the project timeline.

Step 3: Capture Actual Work and Progress

NetSuite allows you to log actual work done against each task, which is crucial for calculating Earned Value (EV). Encourage team members to update their timesheets regularly. You can also use NetSuite’s project status reports to capture each task’s progress.

Step 4: Calculate SPI

To calculate SPI within NetSuite, you must establish Earned and Planned Value. You can create custom fields or use SuiteScript to automate SPI calculation based on these metrics. SuiteDynamics experts can write the script for you during a NetSuite ERP implementation or as a Managed Service after go-live. Schedule your free consultation with our team to learn more.

Step 5: Monitor and Analyze SPI

Regularly monitor the SPI to understand project performance and make data-driven decisions. Use NetSuite’s customizable dashboards to display SPI and other key project metrics and generate periodic reports to analyze SPI trends and identify potential issues. Schedule a free consultation with SuiteDynamics to learn more about these dashboards and reports and discover how easily you can access essential data in the system.

Benefits of Using SPI with a NetSuite ERP

NetSuite’s robust project management features allow you to better determine and utilize SPI for projects. It offers:

1. Enhanced Visibility: Gain real-time insights into project performance.
2. Proactive Management: Identify and address schedule deviations early.
3. Improved Efficiency: Optimize resource allocation and project execution.
4. Informed Decision-Making: Use data-driven insights to make better project management decisions.

These benefits offer a true advantage in the marketplace since many competitors won’t have the same capabilities. According to a 2020 Wellingtone report, just under a quarter of surveyed organizations said they used project management software. The rest made do with Excel, paper, or a loose network of tools with poor integration. Consequently, 54% couldn’t track KPIs in real time.

However, companies using NetSuite’s powerful capabilities can monitor project progress and address issues early. They can meet deadlines and hit goals while competitors struggle to keep up.

SuiteDynamics experts can help your business customize and implement project management software that provides accurate and comprehensive visibility into your operations. Schedule a free consultation to discuss your challenges and how the software can solve them. We’ll ensure you can identify and monitor SPI and other metrics to help your business meet its full potential.

Transform Your Company into an Efficient Powerhouse

Your company must manage its time to succeed. You won’t get many positive reviews—or returning customers—by missing production or project deadlines.

Monitoring your schedule performance index produces a concrete measurement of operational progress to determine when you get off-track and correct the problem quickly. You can record your progress using spreadsheets or paper, but that method wastes time—the very commodity you’re trying to save.

Project management tools—like the features built into a NetSuite ERP system—help monitor and analyze progress automatically so you can dedicate more energy and resources to expanding your business.

We know efficiency is important to your success and want your company to operate at its best.

SuiteDynamics experts will customize and implement a NetSuite ERP system for your organization that helps identify any time management issues before they become time management disasters. Schedule your free consultation today and discover how well your business can run.



We pull information from NetSuite material, SuiteDynamics experts, and other reliable sources to compose our blog posts and educational pieces. We ensure they are as accurate as possible at the time of writing. However, software evolves quickly, and although we work to maintain these posts, some details may fall out of date. Contact SuiteDynamics experts for the latest information on NetSuite ERP systems.

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