What is Schedule Variance in Project Management?
Schedule variance is an indicator of whether a project schedule is ahead or behind. It is typically used within earned value management (EVM) to provide a progress update for project managers at the point of analysis.
Schedule variance is typically represented as a monetary unit, with minus values used to highlight any delays. See below as an example:
- Ahead of schedule: $1,000
- On schedule: $0
- Behind schedule: -$1,000
How to calculate schedule variance
The budgeted cost of work scheduled (BCWS) measures the budget for the entire project, while the budgeted cost of work performed (BCWP) measures the cost of actual work done. The difference between these two numbers is the schedule variance.
To calculate schedule variance, simply subtract the BCWS from the BCWP.
For example, if you have a BCWS of $20,000 and a BCWP of $40,000, your calculation, using the schedule variance formula, would look like this:
$40,000 (BCWP) – $20,000 (BCWS) = $20,000 (SV)
Your schedule variance here is $20,000, meaning that your project is ahead of schedule. To represent this figure as a percentage, you can divide it by the BCWS:
$20,000 (SV) ÷ $40,000 (BCWS) = 0.5
This means your project is 50% ahead of schedule.
Why is schedule variance important?
Schedule variance is important because it gives project managers an accurate picture of the project’s progress, which is a vital element of project management. Project managers must be able to spot any roadblocks as they arise and address them quickly to ensure the project stays on track. The schedule variance formula is a particularly useful tool because it is quick and efficient. Progress can be calculated in seconds, giving project managers extra time to focus on other priorities.
Schedule variance is also a simple way to monitor costs, which is a fundamental practice in project management. According to CIO.com, budget overruns are “a litmus test for project success or failure.” Preventing these overruns is one of the key responsibilities of a project manager, so they need a way to quickly calculate their costs at various intervals. This will ensure they stay within budget and have enough resources to successfully complete the project.
Lastly, schedule variance is important for managing stakeholder expectations. When project managers calculate schedule variance, they gain valuable insights and figures to present at stakeholder meetings. These figures can assure stakeholders that the project is running smoothly. If the schedule variance formula proves that the project is behind schedule, this will provide context for stakeholders on why necessary changes are needed to address the delay.
Top tips for making schedule variance calculations
If you’re preparing to calculate schedule variance, there are a few best practices you should keep in mind. Here are three top tips:
- Always double-check your calculations: If you do the schedule variance formula in your head, verify it with a calculator.
- Calculate schedule variance at different project stages: Projects can change fast, so it’s good practice to get regular updates in real-time. This is particularly relevant if a previous calculation showed you were behind schedule, and you want to ensure you have caught up.
- Focus on quality assurance as well as schedule variance: Your project may be ahead of schedule, but the quality of your deliverables may have been compromised along the way.
- Monitor your project timeline using a Gantt chart: This will help you spot any scheduling clashes and ensure that major milestones are met on time.
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