How can you accurately calculate project variances?

1 Why calculate project variances?

Calculating project variances helps you to monitor and control the project's performance and identify any deviations from the plan. By comparing the actual results with the baseline, you can determine if the project is on track, ahead, or behind schedule, within or over budget, and meeting or exceeding the quality standards. You can also use project variances to evaluate the effectiveness of the project management processes, identify the root causes of the problems, and implement corrective actions or preventive measures.

2 How to calculate schedule variance?

Schedule variance (SV) is the difference between the earned value (EV) and the planned value (PV) of the project. Earned value is the value of the work completed as of a certain date, and planned value is the value of the work that should have been completed by that date. To calculate SV, you can use this formula: SV = EV - PV. A positive SV means that the project is ahead of schedule, while a negative SV means that the project is behind schedule. You can also express SV as a percentage of PV: SV% = (EV - PV) / PV * 100.

3 How to calculate cost variance?

Cost variance (CV) is the difference between the earned value (EV) and the actual cost (AC) of the project. Actual cost is the amount of money spent on the project as of a certain date. To calculate CV, you can use this formula: CV = EV - AC. A positive CV means that the project is under budget, while a negative CV means that the project is over budget. You can also express CV as a percentage of EV: CV% = (EV - AC) / EV * 100.

4 How to calculate scope variance?

Scope variance (SCV) is the difference between the planned scope (PS) and the actual scope (AS) of the project. Planned scope is the total amount of work that the project intends to deliver, and actual scope is the amount of work that the project has delivered as of a certain date. To calculate SCV, you can use this formula: SCV = PS - AS. A positive SCV means that the project has delivered more than planned, while a negative SCV means that the project has delivered less than planned. You can also express SCV as a percentage of PS: SCV% = (PS - AS) / PS * 100.

5 How to calculate quality variance?

Quality variance (QV) is the difference between the expected quality (EQ) and the actual quality (AQ) of the project. Expected quality is the level of quality that the project aims to achieve, and actual quality is the level of quality that the project has achieved as of a certain date. To calculate QV, you can use this formula: QV = EQ - AQ. A positive QV means that the project has exceeded the quality expectations, while a negative QV means that the project has fallen short of the quality expectations. You can also express QV as a percentage of EQ: QV% = (EQ - AQ) / EQ * 100.

6 How to report project variances?

Reporting project variances is an essential part of project communication and stakeholder management. To do so effectively, you need to report the project variances in a clear, concise, and timely manner, using appropriate formats and channels. A variance report is a document that summarizes the project variances and their causes, impacts, and actions taken or planned. A variance dashboard is a visual tool that displays the project variances and their status using charts, graphs, indicators, and colors. Additionally, a variance analysis is a process that explains the project variances and their implications, and provides recommendations and lessons learned.

7 Here’s what else to consider

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