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What is schedule variance? Definition
Schedule variance is a project management metric that measures the difference between a project's planned and actual progress at a given time. It is an essential metric for project cost and progress analysis, as it can show the managers exactly how their project performs, and whether or not it is in jeopardy of being delayed.
Why should you include schedule variance (SV) in project management?
Schedule variance is a project management and schedule performance indicator that act as an alert for the project team and project managers. It helps project managers assess whether the entire project is behind or ahead of schedule and see whether the cost variance does not threaten the projected earned value of the operation.
By calculating and analyzing schedule variance, project managers can identify any potential deviations from the planned schedule and take corrective actions to ensure the project stays on schedule. It also improves cost management in project's schedule, as it allows managers to see whether total project budget can cover all the required tasks. Later on, understanding schedule variance can also help them improve their project planning process in the long run.
Schedule variance formula
The schedule variance (SV) is typically calculated using the following formula:
Where:
- BCWP (Budgeted Cost of Work Performed) represents the value of the work that has actually been completed on the project up to the current date, according to the project schedule.
- BCWS (Budgeted Cost of Work Scheduled) represents the schedule cost of work that was supposed to be completed up to the current date, as per the project schedule.
Both of these variables are typically expressed in the costs of work.
How to interpret the results of calculating schedule variance?
A positive SV indicates that the project is ahead of schedule, meaning that the work completed is greater than planned. Conversely, a negative SV indicates that the project is behind schedule, and the work completed is less than planned.
Calculating schedule variance - example
Imagine you are a project manager overseeing an IT project to develop a new software application. The project is scheduled to be completed in 6 months with a total budget of $100,000. After 3 months, you assess the project progress and gather the following information:
- BCWP (Budgeted Cost of Work Performed): $50,000
- BCWS (Budgeted Cost of Work Scheduled): $60,000
Using the formula mentioned above, we are plugging in the values from the example:
SV = $50,000 - $60,000
SV = -$10,000
The calculated schedule variance is -$10,000, which indicates that the project is behind schedule, as the actual work completed (BCWP) is $10,000 less than the planned work (BCWS) at this point in time.
Calculating schedule variance percentage
In some cases, specifying whether or not the project exceeds the budget is not enough. Some project managers would prefer to express the progress (or lack of it) in percentage - and here’s how it is done using a schedule variance percentage.
Schedule variance percentage formula
The schedule variance percentage (SV%) is a measure that expresses the schedule variance as a percentage of the planned work. It is calculated using the following formula:
Where:
- SV is the schedule variance
- BCWS is the budgeted cost of work scheduled
- Plugging in the values from the previous example:
Schedule variance percentage formula - example
Using the data from the previous example, we can already see that:
- SV = -$10,000
- BCWS = $60,000
Therefore, we can now apply the information to the schedule variance percentage formula. In this example, it looks as follows:
SV% = (-$10,000 / $60,000) x 100
SV% = -16.67%
As you can see, the calculated schedule variance percentage is -16.67%. Negative schedule variance means some project delays are present, and the project's budget may be at risk.
How else can I monitor the progress of my project?
The easiest way for project managers to calculate schedule variance, monitor project's actual cost, and compare it to its planned value that is to automate schedule variance calculations using dedicated project management tools - such as Primetric.
In Primetric, you can monitor a project's schedule variance live, as the tool shows every hour tracked and assigned to a given operation. Later on, the data is summarized in the Report section. It can also act as a source of information on complete schedule performance indicator - live.
By choosing the Project Progress Report, you can see the status of all the operations performed in your company and see exactly how they are doing in terms of time and money.
Project progress report in Primetric
What if I want to learn more about monitoring project progress?
If knowledge about schedule variance (SV) is not enough for you, we have a few other resources about project management you might want to read. Go to our blog and browse the articles about:
- billable utilization and how to use it,
- revenue projection and calculation,
- preventing employee bench - and financial losses,
- project financial analysis,
- preventing cost overrun.
