EAC, ETC, VAC and TCPI: The 4 Forecasts Your Board Needs
CPI and SPI describe where a project stands today. The board needs something else: where it's going to end up. Four figures turn current performance into a closeout forecast — and into a decision you can make with months of runway instead of at the autopsy.
If CPI and SPI still sound like noise, read What Is Earned Value and How to Read CPI and SPI in a Committee first. Here we take the next step: forecasting the finish.
The four figures, at a glance
| Acronym | Name | Answers |
|---|---|---|
| EAC | Estimate at completion | How much will the whole project have cost when it's done? |
| ETC | Estimate to complete | How much money is left to spend from today to the finish? |
| VAC | Variance at completion | How far off the approved budget will we end up? |
| TCPI | To-complete performance index | At what pace does the rest of the work need to run to hit budget? |
All four start from two figures you already have: the BAC (total approved budget) and performance to date.
EAC: the estimated final cost — and its three variants
EAC is the number the board wants to hear. The problem is there isn't just one — the formula depends on what you assume about the work that's left.
1. "What's happened will keep happening"
EAC = BAC / CPI
The most common, and the most honest by default. It assumes current cost performance holds. At a CPI of 0.90, this formula says the whole project will cost 11% more than planned.
2. "The overrun was a one-off"
EAC = AC + (BAC − EV)
Assumes the remaining work will land exactly on budget. Only use it when you can defend why the overrun won't repeat (a closed incident, a replaced vendor). If you use it "just because," you're dressing up the numbers.
3. "The delay costs money too"
EAC = AC + (BAC − EV) / (CPI × SPI)
Penalizes the remaining work for both the overrun and the delay. It's the most pessimistic — and the most realistic on low-SPI projects, where running longer means more hours, more coordination, and more overhead cost.
Rule of thumb. Always present variant 1 as the baseline. If you propose another, state the assumption behind it explicitly. A board shown three different EACs with no explanation stops trusting any of them.
ETC: what's left from today
ETC = EAC − AC
ETC is EAC minus what's already been spent: the money that needs to go in from this point on to reach the finish. This is the figure that matters when discussing a budget increase, because money already spent doesn't come back — the decision is only about what's left.
VAC: the variance the board will see
VAC = BAC − EAC
Variance at completion is the expected overrun (if negative) or savings (if positive) at finish. It's the only EVM figure a steering committee needs to see with no context attached: "this project will close $340,000 over the approved budget" is a sentence that triggers a decision. "CPI is at 0.88" isn't.
Presenting VAC in month 6 instead of at closeout is the difference between managing and explaining.
TCPI: the pace you need to avoid slipping
TCPI = (BAC − EV) / (BAC − AC)
TCPI tells you how cost-efficiently you need to run the rest of the project to finish exactly on budget. Read it as a target CPI:
- TCPI ≤ 1.00 — the target is achievable at the current pace, or even easing off.
- TCPI between 1.00 and ~1.10 — you'll need to push, but it's plausible.
- TCPI > 1.10 — red flag. You're asking the team for a performance level this project has never delivered. If your cumulative CPI is 0.90 and TCPI comes out at 1.25, the original budget is no longer realistic: the conversation is about adding budget or cutting scope, not "trying harder."
Board-ready example. A project with BAC = $2.0M. Halfway through: EV = $0.90M, AC = $1.05M → CPI = 0.86.
- EAC (variant 1) = 2.0 / 0.86 = $2.33M
- ETC = 2.33 − 1.05 = $1.28M still to be spent
- VAC = 2.0 − 2.33 = −$0.33M expected overrun
- TCPI = (2.0 − 0.90) / (2.0 − 1.05) = 1.10 / 0.95 = 1.16
Translation for the board: "If nothing changes, we close $330,000 over. To avoid slipping, the remaining work would need to run 35% more efficiently than we've managed so far, and we have no reason to believe that will happen. We're asking for: an additional $300,000, or removing module C from scope."
When to look at each one
| Situation | Key figure |
|---|---|
| Monthly steering committee | VAC (and its trend) |
| Requesting a budget increase | ETC |
| Deciding whether the original budget is still realistic | TCPI |
| Year-end close / portfolio roll-up | EAC per project |
The requirement almost nobody meets
These four forecasts are only as good as EV is properly measured. And EV is only properly measured when there's a frozen baseline with budget per work package and a progress criterion that isn't decided by whoever's reporting. Without that, EAC is an opinion with decimal points.
The calculation itself, on the other hand, shouldn't be anyone's job: it's four divisions the tool can run on its own at every period close.
PMOvio forecasts the finish for you
EAC, ETC, VAC and the estimated finish date, updated automatically on every project and rolled up across the portfolio. 15 days free, no card required.
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