Sticking to a schedule seems like a simple concept, but every project manager knows adhering to a plan can be challenging. Even the best project managers can find themselves running behind schedule. Many factors can cause a project to be delayed, such as running out of a key material, inconvenient weather halting production, staff illness, or technical issues.
On the flip side, sometimes project managers find themselves running ahead of schedule. Running ahead of schedule because you’ve run a lean project can have several benefits, including reduced costs, earlier launch dates, and less stress for the project team. Yet, it can also indicate that there may be an issue with the project’s quality or a deliverable being missed.
Working out whether you’re behind or ahead of schedule comes with its challenges. Scheduling isn’t just about time, but resource, budget, and scope too. That’s why understanding schedule variance and its equations is a must for all project managers.
- What is Schedule Variance in Project Management
- What are the Benefits of Calculating Schedule Variance?
- How to Calculate Schedule Variance
- Additional Tips When Working with Schedule Variance
- Cautions When Calculating Schedule Variance
- How to Use Forecast to Run Schedule Variance
What is Schedule Variance in Project Management?
Schedule variance helps you determine whether you are ahead of or behind your schedule. If your project is behind schedule and has limited resources allocated, knowing this as soon as possible will help you manage resources effectively, focus on priority deliverables and manage stakeholder expectations.
Here are the three main factors in the schedule variance formula:
- Schedule Variance (SV): This is the difference between the percentage of work completed versus the percentage expected to be completed by a particular date.
- Earned Value (EV): This is the percentage of the budget that has been used based on the percentage of the work completed thus far. This can be calculated by multiplying the total project budget by the percentage of work completed.
- Planned Value (PV): This is the amount of budget you expect to have been utilized based on the progress you expected to have made by a specific date. This can be calculated by multiplying the total project budget by the percentage of work that should have been completed, based on the schedule and time elapsed.
What are the Benefits of Calculating Schedule Variance?
Getting an Accurate View of a Project’s Progress
When you’re mid-way through a project it can be difficult to determine how much progress has been made. This is especially true with complex projects with multiple moving parts and teams. Schedule variance helps clarify this, offering a clear view of progress and budget utilization without any guesswork.
When projects run beyond their expected delivery date or stages take longer to complete than estimated, costs can rise fast. Often delays are unnecessary or avoidable with effective planning and regular review sessions, which frequently reviewing schedule variance can support.
Managing Stakeholder Expectations
Delays or overspending affect a business’s bottom line. When you’ve got a clear view of your project’s progress and costs, you can better manage client and stakeholder expectations. The earlier you can flag delays, deadlines need to be pushed out, or budgets increased, the better.
How to Calculate Schedule Variance?
There are several equations that you need to know when calculating schedule variance. If you plan to take the PMP exam any time soon or simply want to up your project management game, these formulas are essential for project managers to know.
SV = EV - PV
By deducting the PV (Planned Value) from the EV (Earned Value), you can determine the
SV (Project Variance).
If the value is positive, this means you’re ahead of schedule. If it is negative, you’re
behind schedule. If you’re on schedule, the value will be zero.
SV = BCWP - BCWS
This equation is identical to the one above, the only difference being the terms used. It is essential to know both as you’ll see both variations in different contexts.
BCWP stands for budgeted cost of work planned, and BCWS stands for budgeted cost of
work scheduled. By deducting the latter from the former, you can determine the SV.
PV = (Planned % Complete) x (BAC)
The planned value can be determined by multiplying the percentage of the budget that has been used by the BAC. BAC stands for Budget at Completion, meaning the total anticipated
spend by the end of the project. This may change as the project progresses, depending on
changes to scope and timelines.
EV = (% of completed work) x (BAC)
Similarly, the earned value can be estimated by multiplying the percentage of the work
completed by the BAC.
AC stands for actual cost. While there is no formula to determine this, this is an important acronym to know.
Schedule Variance Formula Example
If these acronyms and formulas feel a little confusing, let’s put them into practice with an example project.
Planned project length: 6 months
Time worked to date: 3 months
Project cost (BAC): $120,000
Actual cost (AC): $55,000
Planned percent of project complete: 50%
Actual percent of project complete: 35%
PV = (Planned % complete) x (BAC)
PV = (50%) x ($120,000)
PV = $60,000
EV = (% completed work) x (BAC)
EV = (35%) x ($120,000)
EV = $42,000
SV = EV-PV
SV = $42,000 - $60,000
SV = -$18,000
As the result is negative, this means the project is behind schedule. To get a percentage, simply divide the SV (-$18,000) by the PV ($60,000) = -0.3, -30%. This means the project is 30% behind schedule.
If the schedule variance comes out at zero, then that means your project is on schedule, which is excellent news!
Additional Tips When Working with Schedule Variance
Formulas are incredibly useful when determining details such as overspend or schedule variance, but they can’t take into account human error, poor management, or changes to plans. Here are some other factors to consider when determining schedule variance.
Always Check the Cost Variance
Your schedule variance calculations can tell you that something isn’t quite right; what it can’t tell you is what has gone wrong or why it happened. Schedule variance can act as a warning sign that your project schedule isn’t quite lining up with reality, informing you that you need to take some time to review your costs and timelines going forward. Checking your cost variance in addition to schedule variance allows you to have difficult conversations with stakeholders or clients as early as possible.
Always Check Twice
While it can be tempting to calculate schedule variance quickly in your head, always double-check your work with a calculator. When we’re stressed, sleep-deprived, or generally busy, mistakes happen, so make sure to always check twice.
Monitor Schedule, Cost, and Quality
Monitoring schedule variance is important, but it doesn’t delve into the detail when it comes to schedule or cost. As your project progresses, monitor your schedule closely against a timeline or Gantt chart, and regularly check in on costs to ensure you’re not overspending.
Last but not least, ensure you monitor the quality of your team’s output; if you’re ahead of schedule or haven’t used all your planned budget, it may be wise to run quality assurance as this could have been compromised.
Cautions When Calculating Schedule Variance
At the end of the day, these calculations are just estimates. Here are some things to keep in mind when running your calculations:
Calculations Can Be Wrong
Human error can come into play when calculating schedule variance. Errors mainly occur due to work being rushed or miscalculated by inexperienced individuals. So, it’s always worth double-checking your calculations. Use a calculator or an Excel template to ensure accuracy.
Not All Data is Relevant or Correct
While you can use data from previous projects to create estimates for future work, not everything will be relevant. When using historical data to produce estimates for costs or timelines, be rigorous in analyzing what does and doesn’t apply to your current project, or you risk skewing your budgets and timelines.
Be Wary of Subjective Estimates
Project managers are often required to justify their decisions to clients and stakeholders. Schedule variance and similar calculations help you do just that by providing a clear view of project progress that can inform decisions. Estimates produced by either yourself or a member of your team without using mathematical calculations — such as rough estimates based on guesswork — should never be relied upon in such situations as they are subjective.
How to Use Forecast to Run Schedule Variance
Forecast is here to help with all your project management needs. From intelligent budget reconciliation to automated resource allocation, Forecast offers a wide range of tools available on one platform to help your projects run smoother.
Not only can you connect your team’s tracked time to your project schedules and budgets, helping with schedule and cost oversight, but metrics that update in real-time allow you to calculate schedule variance in seconds. That means you can quickly identify issues that are holding you back from progressing as well as opportunities for improvement.
To get a clear overview of your project’s progress and spending to date, sign up for a free 14-day trial of Forecast below.