Schedule variance

Schedule variance is the variance between earned value and planned value. It shows the amount of work that has either exceeded planned value or is lower than planned value. Schedule Variance (SV) value is shown in terms of dollars when cost is used and in hours when effort is used. It also indicates how much ahead or behind schedule a project is.

A formula can be used to give variance in terms of cost, which indicates how much cost of work is yet to be completed according to the schedule or how much cost of work has been completed over and above the scheduled cost. Positive variance indicates that a project is ahead of schedule; negative variance indicates that the project is behind schedule. Schedule variance can be calculated using the formula: $schedule\,variance(SV)=earned\,value(EV)-planned\,value(PV)$

Elements of schedule variance

Five main elements can be distinguished:

• Planned result describe the work planned to be accomplished during the reporting period
• Actual result describe the work actually accomplished during the reporting period
• Variance describe the variance
• Root cause identify the root cause of the variance
• Planned response document the planned corrective or preventive action

Schedule variance in terms of cost

In truth, the equation for schedulevariance is not all that useful until it is amended to report the schedule variance as a percentage. Once the schedule variance is know in terms of a percentage (positive or negative decimal value). this percentage can be multiplied by the time since project inception to determine the schedule variance in any until of time (days, weeks, months). The equations for schedule variance percent and schedule variance time are as follows :

• Schedule variance percent(SVP)

Schedule variance percent (SVP) indicates how much ahead or behind schedule a project is in terms of the percent of work completed.A formula will give the variance in terms of a percent which indicates what percent of work has slipped with respect to the planned duration or what percent of work has been completed over and above the planned schedule as of a given day/period.: $schedule\,variance\,percent(SVP)=schedule\,varianc(SV)+planned\,value(PV)$

• Schedule variance time (SVT):

Schedule variance time (SVT) is schedule variance shown in terms of time rather than a dollar value or effort as shown by schedule variance (SV): $schedule\,variance\,time(SVT)=schedule\,variance\,percent(SVP)\cdot actual\,duration$

• Cost variance percent (CVP):

Cost variance percent (CVP) indicates how much a project is over or under budget in terms of percent. A formula can be used to derive the variance of money spent to complete the work as planned:

$cost\,variance\,percent(CVP)={\frac {cost\,variance(CV)}{earned\,value(EV)}}$

Examples of Schedule variance

• Example 1: A project has a planned value of 2000 hours. After four months of work, the earned value of the project is 1800 hours. The Schedule Variance (SV) for the project is - 200 hours, meaning that the project is behind its planned schedule.
• Example 2: A project has a budget of $50,000. After two months of work, the earned value of the project is $35,000. The Schedule Variance (SV) for the project is -$15,000, meaning that the project is behind its planned budget.

Advantages of Schedule variance

Schedule variance is a key metric for measuring project performance. It is used to determine if a project is on track, on budget, and within the timeline. The advantages of schedule variance are:

• It helps to identify potential problems early and take corrective action before they become serious.
• It enables project managers to monitor the progress of the project and ensure accuracy in the planned timeline.
• It helps to compare the planned and actual activities and determine the amount of time needed to complete the project.
• It helps to identify any delays in the project and take corrective action accordingly.
• It allows project managers to anticipate any risks and plan accordingly.
• It helps to track the overall progress of the project and ensure that it is completed within the set timeline.

Limitations of Schedule variance

Schedule variance is a useful tool for measuring the performance of a project, but it has its limitations. These include:

• It does not take into account variances in quality or scope, so quality or scope changes may not be accurately reflected in the SV.
• It does not account for changes in the project timeline due to unforeseen circumstances or external events.
• The SV may be affected by inaccuracies in the project budget and timeline estimates.
• It does not provide any insight into the reasons behind the variance, making it difficult to take corrective action.
• The SV does not take into account changes in resource availability, making it difficult to accurately assess resource utilization.

Other approaches related to Schedule variance

Schedule variance is an important metric for assessing the progress of a project. Other related approaches to measuring project performance include:

• Earned Value Analysis (EVA): EVA is an analytical technique for measuring project performance and progress in terms of scope, cost and schedule. It helps to determine the current state of a project and how far it is from the baseline.
• Critical Path Method (CPM): CPM is a technique used to identify the critical activities in a project and the sequence of events that must be completed in order to finish the project on time.
• Resource Management: Resource management helps to identify the resources needed for a project and allocate them in the most efficient way.

These approaches are all related to the concept of schedule variance and can be used to measure project progress and performance. By using these approaches, project managers can identify any areas of concern and take corrective action to ensure the project is completed on time and within budget.

Footnotes

Schedule variance — recommended articles

Planned value — Earned value analysis — Earned value calculation — Baseline schedule — Project status report — Arrow diagram — Schedule performance index — Quality costs record — Project cost management

References

• Dayal S., (2008),Earned Value Management, J. Ross Publishing, Lauderdale.
• Havranek T.J., (2017), Modern Project Management Techniques for the Environmental Remediation Industry, Routledge, Madison.
• Stackpole C.S., (2013), A Project Manager's Book of Forms, John Wiley & Sons, New Jersey.
• Webb A., (2003), Using Earned Value: A Project Manager's Guide, Gower Publishing, Burlington.

Author: Karolina Urbańczyk