Project managers have a big job in a company, and schedule variance is a confusing concept. They have to plan work, handle people, deal with money, and manage technology. If we had to sum up their main job in one sentence, it would be something like, “Project managers make sure that work is done on time and doesn’t go over budget.”
Now, how do they figure out if a project is on track or falling behind? They rely on a powerful calculation called project schedule variance. While it can be calculated by hand, it’s much better to use project management software. This way, it can update and change as the project moves forward, giving real-time information to internal teams.
Schedule variance helps you figure out if your entire project side is on track or running late. If your whole project team is behind schedule and has limited resources, finding this out early is crucial. It helps you manage resources well, focus on the most important tasks, and handle stakeholder expectations.
Now, let’s break down the schedule variance formula into three main parts:
This shows the difference between the work completed and the work expected by a project efficiency rating a certain date. It helps you see the schedule performance indicator if you’re ahead or behind.
This tells you how much of the project’s budget you’ve used based on the work completed so far. You calculate it by multiplying the total remaining project time and budget by the percentage of work done.
This is the budget amount remaining resources you should have used by a specific date based on the expected project progress. To find it, multiply the total project budget by the percentage of work that should have been done, considering the schedule and time passed.
Schedule variance is crucial for project managers because it gives them a clear picture of how the project is progressing. This is really important in project management. Managers need to quickly identify any problems that come up and fix them so that the project progresses and stays on track.
The schedule variance formula is handy because it’s fast and efficient. Managers can calculate progress in just seconds, leaving them with more time to focus on other important things.
Another reason project schedule variance really matters is that it helps keep an eye on costs, which is a basic part of project management. Going over budget is a big test of whether a project will succeed or fail.
Project managers have a key job in preventing project delays and preventing these overruns, so they need a quick way to see project resources and figure out their costs regularly. This ensures they stick to the budget and have enough resources to finish the project successfully.
Lastly, the schedule variance calculation is vital for managing stakeholder expectations for complex projects. When project managers use the schedule variance formula, they get useful information to share at meetings with stakeholders.
These numbers can reassure stakeholders that the project’s progress is going well. If the formula shows the project is behind schedule, it helps explain why changes are needed to the project dashboard to address the delay.
Using specialized tools like Online Project Tracking by TimeTrack can enhance the efficiency of project managers in tracking and managing project delivery schedules, aligning with the user’s emphasis on fast and efficient methods in project management.
To find out how well a project is doing, complete schedule performance indicator, you can use something called Schedule Variance. This is calculated by taking the Earned Value (EV), which shows how much work is done, and subtracting the Planned Value (PV), which is how much work was supposed to be done.
So, Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV).
Earned Value (EV) tells you the amount of work completed at a certain point in the project, while Planned Value (PV) tells you how much work was planned to be done at that same point in a construction project.
Sometimes, you might see the formula written as SV = Budgeted Cost of Work Performed (BCWP) – Budgeted Cost of Work Scheduled (BCWS).
It means the same thing. Here, BCWP is the budget for the work that’s been done, and BCWS is the budget for the work that was scheduled to be done.
Here’s the breakdown:
This is the budget for the work that’s already done. You calculate a budget value for it by calculating actual progress and multiplying the total project budget by the percentage of work completed.
This is the budget for the work that should be done by now, based on the project timeline. You find it by multiplying the scheduled cost of the total project budget by the percentage of work that should be completed, considering the time that’s passed.
Now, let’s break it down with an example. Imagine you have a 20-day project with a total budget of $100,000. After 10 days, you should have completed 50% of the work, which is $50,000. But, in reality, you’ve only finished $25,000 of work.
Plug these numbers into the following formula:
To express this as a percentage, just divide:
This percentage shows that your project’s schedule is 50% behind where it should be at this point. If the number were positive, your project would be ahead of schedule. If it’s zero, then your whole project plan is right on track!
Let’s break down the difference between the Budgeted Cost of Work Scheduled (BCWS) and the Budgeted Cost of Work Performed (BCWP). BCWS measures the overall project budget, while BCWP measures the actual cost of the actual work completed.
The schedule variance, which tells us how the project is doing compared to the plan, is found by subtracting BCWS from BCWP.
For an easy calculation, let’s say your BCWS is $20,000, and your schedule variance percentage BCWP is $40,000. To find the schedule variance, simply subtract BCWS from BCWP:
$40,000 (BCWP) minus $20,000 (BCWS) equals $20,000 (SV).
So, your schedule variance is $20,000, indicating that your project is ahead of schedule. To show this as a percentage, divide the project’s schedule variance by BCWS:
$20,000 (SV) divided by $40,000 (BCWS) equals 0.5.
This means your project is 50% ahead of schedule.
When we talk about Cumulative Schedule Variance, it’s about looking at the negative schedule variance means the difference between the earned and planned values over several periods in a row. To figure out the cumulative CVs, you just add up the Earned Value (EV) for each period. It goes like this: EV for period 1 plus EV for period 2 plus EV for period 3, and so on.
Then, you subtract the total sum of the earned and Planned Value % (PV), which means adding up PV for period 1, PV for period 2, PV for period 3, and so on. The outcome is the Cumulative Schedule Variance (cumulative SV). This gives you an overall picture of how things are going across multiple periods.
Understanding Schedule Variance is pretty straightforward: if it’s positive, your project is likely ahead of schedule; if it’s negative, you might be behind; and if it’s zero, you’re on track. However, real-world situations can make it a bit tricky:
For instance, a negative Schedule Variance doesn’t always mean you’re falling behind. Picture this: you hire a developer to finish a task, and they wrap it up in half the expected time.
This actually saves you money, so even though the schedule cost variance is negative, it’s because the work took less time than planned.
On the flip side, a positive Schedule Variance doesn’t always mean your project stays in smooth sailing. If part of your project goes over budget, the schedule variance can end up positive, even though you’re not ahead of schedule.
Some folks propose having a “time-based” earned schedule to make Schedule Variance easier to understand. That’s because SV is usually in terms of money (like dollars or euros), which can make it tricky to measure in units like months.
When you’re getting ready to figure out schedule variance, it’s good to remember a few important things. Here are three key tips:
In conclusion, understanding and calculating schedule variance is a crucial aspect of effective project management. It serves as a valuable tool, providing project managers with real-time insights into the actual and expected progress made of their projects.
The schedule variance formula, whether expressed as EV minus PV or BCWP minus BCWS, offers a quick and efficient way to gauge if a project is on track, behind schedule, or ahead of schedule.
Being a digital marketer, I have been working with different clients and following strict deadlines. For me, learning the skill of time management and tracking was crucial for juggling between tasks and completing them. So, writing about time management and monitoring helps me add my flavor to the knowledge pool. I also learned a few things, which I am excited to share with all of you.