Where this ends.

Where this ends

Our project converts money into building at 79 cents on the dollar. That's not an opinion; it's six months of evidence.

So take the budget and divide it by the exchange rate.

A million dollars of work, purchased at 79 cents on the dollar, costs about 1.27 million.

There it is. A quarter of a million over — and you know it in month six, not month eleven. That's the whole value of everything we've done: the overrun didn't appear at the end. It was visible from the moment you knew your exchange rate.

Two other numbers fall straight out of it, and they're the ones your finance director actually needs.

The overrun is the gap between what you promised and where you're heading: 267 thousand. Someone has to find that money, and they'd rather know now.

What's left to spend is the forecast minus what's already gone: about 887 thousand still to be paid out. That's not a scary number — it's a cash-flow number, and the business needs it to keep the lights on.

Both are simple subtractions. Both are unanswerable without earned value.

The number that ends the meeting

Now the one I want you to actually take away from this whole series.

Someone senior will look at that forecast and say the thing they always say: "That's not acceptable. Put a recovery plan together and bring it back to budget."

Fine. What would that actually require?

You have 700 thousand of building still to erect, and 620 thousand of budget left to do it with. So from tomorrow, every dollar you spend must buy 1.13 dollars of building.

Sit with those two numbers. For six months, on this site, with these crews, you have proven you can achieve 0.79. To hit the original budget you must now, starting tomorrow, achieve 1.13.

That's a 43% improvement in efficiency — not against your plan, against your actual demonstrated performance. On the same site. With the same subcontractors. In less time than you had when you couldn't manage it the first time.

This is the number that turns a "recovery plan" from a management aspiration into an arithmetic claim that someone has to defend. And that's exactly why you should calculate it before the meeting, not during it.

Anything meaningfully above 1.0 means the budget is under real pressure. Far above it — and 1.13 against a proven 0.79 is far above it — means the budget is gone, and the honest conversation is about which of Week 14's three options you're choosing: more money, less scope, or more time.

Fixing what SPI couldn't see

Now the schedule half — and the flaw we left hanging last week.

The schedule index is measured in money, and it has a fatal quirk. On the very last day of your project, all the work is done: earned value equals planned value equals the whole budget. So the index reads 1.0. Perfect.

Even if you delivered a year late.

Think about that. The one number on your report claiming to describe schedule performance politely climbs back to "everything's fine" as the disaster completes. It is at its most reassuring exactly when it is most useless.

The fix is beautifully simple: stop measuring the delay in money. Measure it in months.

Here's the move. You've earned 300 thousand of value. Go to your baseline and ask: when did we say we'd have reached 300 thousand?

The plan said month five. It is now month six.

So you have earned five months of plan, using six months of calendar. You are one month behind — stated in months, not dollars. And your true schedule efficiency is 5 ÷ 6, or 0.83: you're generating about five months of progress for every six months you burn.

Unlike the dollar version, this doesn't lie at the end. If you finish a year late, it says so on the last day, in months, in a unit every site manager on earth understands without a glossary.

And notice the two schedule numbers disagree — 0.75 in dollars, 0.83 in time. They're measuring different things. The time-based one is the one you should be quoting.

Forecasting isn't fortune-telling. It's arithmetic on a trend you already have. The project has been telling you how it behaves for six months — every invoice, every pour, every missed date. All these formulas do is refuse to look away.

Practical insight

Before your next steering meeting, work out three numbers.

What does this finish at, if we carry on exactly as we have? What efficiency would we need, from tomorrow, to still hit the budget? And how does that compare to the best month we have actually had?

If the required number is higher than your best-ever month, you don't have a recovery plan. You have a hope with a spreadsheet attached — and the most valuable thing you can do for that project is say so, out loud, while there's still a project left to save.

Key takeaways

✔ Divide the budget by your cost efficiency and you have the finish cost — in month six, not month eleven.
✔ The overrun and the remaining spend both fall out of that one forecast.
✔ The to-complete index asks what efficiency you now need to still hit the budget.
✔ Compare it to what you've proven you can do. Ours: 1.13 required against 0.79 achieved.
✔ If the required efficiency beats your best-ever month, it isn't a plan — it's a hope.
✔ The dollar schedule index always creeps back to 1.0 by the end, even on a project delivered a year late.
✔ Earned schedule fixes it: find the date the plan said you'd reach today's earned value.
✔ Five months of plan earned in six months of calendar — a delay stated in a unit everyone understands.

What's coming next

Our project is 267 thousand over and a month behind, and we can prove both.

So the client asks for a change. A big one. And here is where everything we've built either holds or collapses — because the moment scope moves, every number in this article stops meaning anything unless the baseline moves with it, formally, on the record.

Next week: change control, and how a project protects the only thing it has left — the ability to prove what happened.