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Variance Analysis

Definition: Variance Analysis is the process of comparing planned outcomes with actual results to identify deviations in a project’s performance.

It helps determine the reasons behind discrepancies in cost, schedule, or scope. This analysis is critical for maintaining project control and ensuring that corrective measures are taken promptly.

Key Aspects of Variance Analysis:

1. Types of Variances

Cost Variance (CV): Difference between budgeted and actual costs.
Schedule Variance (SV): Difference between planned and actual progress.
Scope Variance: Deviations in project deliverables from the initial plan.

2. Steps in Variance Analysis

Collect Data: Gather actual performance data.
Compare Baseline vs. Actual: Identify discrepancies.
Identify Root Causes: Determine why the variance occurred.
Develop Corrective Actions: Plan measures to mitigate the variance.

Tools for Effective Variance Analysis:

1. Earned Value Management (EVM): Combines scope, time, and cost data for comprehensive analysis.
2. Project Management Software: Tools like ProHance aid in tracking variances.
3. Variance Reports: Detailed documentation of discrepancies and actions taken.
4. Dashboards: Visual representations for real-time tracking of variances.

Other Terms:

No glossary files available.