How does project variance impact project management?

1 What is project variance analysis?

Project variance analysis is the process of comparing the planned and actual results of a project and identifying the causes and effects of any deviations. Project variance analysis helps project managers to evaluate the project's progress, performance, and health. It also helps to identify and resolve issues, make adjustments, and communicate the project status to the stakeholders.

3 How to interpret project variance?

Interpreting project variance can be done using various techniques and criteria, depending on the project's objectives, constraints, and tolerance levels. For example, one can compare the project variance to the baseline plan approved by stakeholders. If the variance is positive, it means that the project is performing better than planned; if it is negative, then the project is performing worse than planned. Additionally, one can compare the variance to a threshold to determine if the project is within control or needs corrective action. Lastly, trend analysis can reveal patterns, changes, and forecasts over time. If the variance is consistent or increasing, it means that problems are persistent or worsening; if it is decreasing or fluctuating, then the project is improving or stabilizing.

4 How to manage project variance?

Managing project variance requires various strategies and actions, based on the project's context, complexity, and stakeholder expectations. Variance reporting is essential for communicating the project variance to relevant stakeholders in a timely, accurate, and transparent manner. This helps to inform, align, and engage the stakeholders on the project's performance, issues, and changes. Additionally, variance analysis should be conducted to determine the root causes, impacts, and implications. This helps to understand, diagnose, and evaluate the project's problems, opportunities, and risks. Lastly, variance response involves developing and implementing the appropriate responses to the project variance. This can help to correct, prevent, or mitigate the project's deviations, gaps, and threats.

5 How to improve project variance?

Project variance can be improved using various practices and techniques, depending on the project's scope, schedule, cost, quality, and risk. To reduce project variance, scope management should be used to define, control, and validate the project's scope to meet stakeholder needs and expectations. Schedule management is also important for planning, monitoring, and updating the project's schedule to meet deadlines and milestones. Additionally, cost management should estimate, track, and optimize the project's budget to meet funding and profitability. Quality management should plan, assure, and control the project's quality to meet standards and requirements. Lastly, risk management should identify, assess, and manage the project's risks to stay within the project's tolerance and appetite. All of these strategies can help avoid or minimize scope creep, changes, delays, disruptions, overspending, waste, defects, errors, uncertainty, exposure, and losses that can cause project variance.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?