Devaux's Index of Project Performance

Devaux's Index of Project Performance (usually known as the DIPP) is a project management performance metric formulated by Stephen Devaux as part of the total project control (TPC) approach to project and program value analysis. It is an index that integrates the three variables of a project (scope, time and cost) into a single value-based index where:

The DIPP was originally proposed as a value-based metric that quantified the key variables in the decision of whether to continue funding or terminate an ongoing project. It was introduced in the Sep/Oct 1992 issue of Project Management Journal and reprinted as a chapter in the 1999 book Essentials of Project Control. It was intended to lessen the emotions surrounding such a critical decision by reducing the value/cost aspects to a formula that removed sunk costs from consideration while focusing on opportunity cost, salvage value, and project termination costs. The formula is:

In 1999, a simplified form of the DIPP was introduced as a technique for monetizing and integrating all three variables of the traditional project "Iron Triangle" into a single value-based baseline for measuring what the project's expected return is scheduled to be at any given future progress reporting date. The Tracking DIPP baseline formula is:

As project work is performed and sunk costs accrue, the Cost ETC is expected to decrease at a planned rate. Since the planned Cost ETC is the denominator of the DIPP formula, the DIPP can be plotted to rise steadily during project execution, reflecting the fact that as a project nears completion, the return on the remaining investment becomes greater and greater (thus usually making it unwise to kill an ongoing project unless its Actual DIPP approaches 1.0 or less).

As the project is executed, the DIPP provides an integrated metric, reflecting the project's investment value, against which any changes in the three variables of scope, time and cost can be measured. Any changes in the expected value of the scope, any acceleration or delay in schedule, and any change in the planned Cost ETC can be reflected in the Actual DIPP. This can be measured against the Planned DIPP to produce the DIPP Progress Index (DPI), an extension to the project's expected business value of the earned value indices the schedule performance index (SPI) and the cost performance index (CPI). The DIPP Progress Index formula is:

The DIPP baseline presents the project team with a planned metric against which to manage, and provides guidance for individual team members who seek opportunities to enhance the project's overall business value and expected project profit (EPP) by generating a DPI of greater than 1.0. This can generally be accomplished most easily through identifying schedule acceleration opportunities identified through critical path drag and drag cost computation.

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