How to Use the AVERAGEIF Function in MS Excel
- Daniel Rivera, PMP
- Jul 29, 2021
- 2 min read
Updated: Sep 17
As project managers, we’re constantly reviewing data to determine whether our projects and programs are on track. One of the most critical metrics is the Cost Performance Index (CPI), which helps us understand if we’re under budget, over budget, or right on target.
In this lecture, we explore how the AVERAGEIF function in Excel can help you quickly calculate the average CPI across multiple projects or programs, making it easier to spot trends and identify when your portfolio may be in trouble.
Why CPI Matters in Project Management
The Cost Performance Index (CPI) is a key measure of project health. It’s calculated as:
CPI = Earned Value (EV) ÷ Actual Cost (AC)
A CPI greater than 1 means you’re under budget.
A CPI less than 1 means you’re over budget.
A CPI equal to 1 means you’re exactly on budget.
While one project’s CPI may give you insight, averaging CPI values across several initiatives tells you whether your program as a whole is financially healthy. That’s where the AVERAGEIF function becomes invaluable.
How the AVERAGEIF Function Helps
The AVERAGEIF function in Excel allows you to calculate averages based on a specific condition. For example, you might want to calculate the average CPI for only those projects where CPI falls below 1.0.
Formula Example:
=AVERAGEIF(C2:C20, "<1", C2:C20)
This formula calculates the average CPI of projects where the value is less than 1. By doing this, you can:
Quickly identify projects trending over budget.
Evaluate program-level risks before they escalate.
Report to stakeholders with data-driven insights.
Practical Example of the AverageIF Function in MS Excel
Imagine you’re overseeing a program of 15 projects. By referencing multiple worksheets in Excel, each containing project-level CPI data, you can build a summary dashboard that highlights:
The average CPI across all projects.
The average CPI of only underperforming projects.
Trends over time, helping you make informed recommendations.
This approach turns Excel into a powerful project management tool for monitoring cost performance without needing expensive software.
Click on the banner below for a video demonstration on how to use the AverageIF function in MS Excel...
Final Thoughts
The AVERAGEIF function in Excel is more than just a formula—it’s a decision-making tool for project managers. By mastering functions like this, you’ll be better equipped to monitor performance, manage budgets, and lead projects to success.
Want to take your Excel skills even further?
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