Why Does
Schedule Performance Index Matter So Much?

The construction industry has always faced unique challenges and opportunities. Most recently, there has been an increased demand for construction services due to population growth, urbanization and aging infrastructure. Simultaneously, construction project management has evolved thanks to technology adoption and advancements to help fulfill those demands, though much of the industry is still adapting to full tech development.

However you slice it, all of this is placing more emphasis and importance on schedule control. Accordingly, construction managers and general contractors have been relying on schedule performance index (SPI) to help gauge actual progress of a project against its planned progress at any given time. This metric, often existing in tandem with other earned value performance metrics, is used to gain more understanding and control over today’s capital projects. Let’s consider some of what is elevating SPI’s value.

Unanticipated risks are impacting schedules

As has often been said in construction, you can’t plan what you can’t see, and that includes planning for risk. In the last couple of years, we’ve all watched as new risks have manifested; supply chain bottlenecks due to transportation issues, supply not meeting demand resulting in backlogs on ordered materials, and a heightened difficulty finding enough skilled labor.

Without early warning signs of developing schedule-impacting problems, it’s more likely these and other threats will be discovered when it’s too late to adequately control, plan around or navigate through them. Perhaps unsurprisingly, many construction professionals who took InEight’s Global Capital Projects Outlook survey earlier this year confirmed that they don’t have the necessary metrics to understand where their projects stand at any given moment, jeopardizing their ability to adequately address risks as they arise.

Monitoring project status through performance metrics like schedule performance index, however, provides these signs so the effects of these risks can be seen as they’re developing.

Real-time metric data is providing more insights

Even with the best-laid plans, the one thing everyone can expect in construction is that the unexpected will happen. So how does tracking the schedule performance index help? Well, in and of itself, it can’t indicate what is happening specifically. However, it’s always-fluctuating value — responsive in real time to a wide range of internal and external variables — can reveal that something is happening.

This opens up the opportunity to examine the triggering event or situation, which ideally involves incorporating what other metrics are currently showing, including cost performance index (CPI) and schedule variance (SV), for a more complete assessment of project performance. Having access to real-time data like SPI is giving construction companies a chance to avert a domino effect on dependent activities, which further compounds the problem, or to plan contingencies like hiring last-minute workers to bring a task back on schedule, for example.

Escalating complexity means more to coordinate

Construction schedules are becoming more intricate to accommodate the ever-growing complexity of capital and infrastructure projects. That means additional reasons for being able to assess and manage project progress by having easier access to schedule information. This complexity, combined with the need for up-to-the-minute timeline details, is increasing the need for the simplicity of the schedule performance index. It’s at-a-glance numeric value provides contractors and project managers an easy, accessible way to see where a project stands at any given moment. In addition, you’ll want to keep an eye on any SPI values venturing outside of its operating range that can automatically trigger an alert to the appropriate people that something demands investigation, an adjustment, or a decision on a possible course correction — before it has a chance to infringe on other parts of the project.

Schedule performance index supports the realism trend

Who hasn’t seen a construction schedule that wasn’t a bit ambitious, right? Yet it’s realism that will end up showing in the finished project. Therefore, contractors stand to benefit by turning to past project data, specifically the SPI values from similar previous projects. They tell the story of what risk factors played out and the degree of their impact. Using this historical data not only informs the development of risk-adjusted schedules and contingency plans for current and future projects, it shows what it really takes — from a labor, material, equipment and time resources perspective — to complete them.

Fewer labor resources are available to finish on time

One of the biggest challenges over the last decade has been the shortage of skilled workers who can perform construction work at an acceptable level of quality. An insufficient push for better trade education, reduced social engagement with the industry, plus construction veterans retiring out of the profession all contribute to a serious situation where there may not be enough skilled individuals to finish projects.

This is further aggravated by the increase in the sheer number of capital projects. The result is that contractors now face a sort of Catch-22 when it comes to scheduling their projects: They have more work than ever before but fewer resources available to complete it all on time.

Thankfully, this all shows up in the schedule performance index. The SPI’s value can be used to help contractors determine possible courses of action. For example, it may be decided that additional resources are needed to help meet project milestones on time, pulling from another part of the jobsite that might be ahead of schedule or from another project altogether. Or, if the corresponding SPIs show that isn’t possible, it may justify a decision to secure additional funding to hire outside workers to complete a particular task or perform repairs or rework.

Schedule performance index helps you gain more control

By now, it’s clear that SPI really does matter, but are you getting the most out of it? Is it helping you get a better handle on your projects, their timelines and their impact on the respective budgets? InEight reporting delivers on all this, providing the visibility you need to proactively monitor and manage the many details that go into today’s more complex capital projects. Schedule a consultation to learn more about how our reporting can help you make full use of your SPI and other performance metrics.

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