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July 8, 2026How do I interpret a CPI of 0.85?
My project has a CPI of 0.85 after month 3. The PM says we're 'slightly over budget' but I think it's worse than that. How should I interpret this number and what should I tell the sponsor?
A CPI of 0.85 means you're getting 85 cents of value for every dollar spent — that's a 15% cost overrun. Saying 'slightly over budget' is misleading. At month 3 of a 12-month project, this could mean a 15% budget overrun at completion (EAC = BAC/CPI). Tell the sponsor: 'At current performance, we'll spend $X more than planned. Here are 3 options to address it.' Reference: PMBOK 8th Edition, Finance Performance Domain.
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