Earned Value Management

Schedule Variances – What Does it Mean, and How do I Figure it Out?

Schedule Variance (SV) indicates how much a project is ahead or behind schedule. It measures whether a project is on track by calculating actual progress against expected progress. SV is used by the Program Manager (PM) and program personnel to determine how best to utilize their remaining resources. Monitoring SV will keep you apprised of your project’s status concerning deadlines and possible problems.

Definition: Schedule Variance (SV) is the difference between the actual time it has taken to get to a point on a project vs the planned time to get to that point on a project.

Primary Schedule Variance (SV) Calculation

Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)

(See below for other calculation methods)

What is Schedule Variance

Schedule variance tells you if you are ahead of or behind schedule. If your project is behind schedule and you only have a limited amount of resources, knowing this as soon as possible will help you manage resources well, focus on the most important outputs, and manage stakeholders’ expectations. Here are the three most important parts of the formula for schedule variance:

• Schedule Variance (SV): This is the difference between how much work has been done and how much should have been done by a certain date.
• Earned Value (EV): This is how much of the budget has been spent based on how much work has been done. You can figure this out by multiplying the total budget for the job by the percentage of work done.
• Planned Value (PV): This is how much of your budget you think you will have used based on how far you thought you would have come by a certain date. This can be worked out by multiplying the total budget for the project by the percentage of work that should have been done by now, based on the plan and the amount of time that has passed.

Benefits of Schedule Variance (SV)

The key takeaway from Schedule Variance for a project manager is that they can understand if their program schedule is ahead, behind, or on time and by how much. An example would be they can communicate that they are 10% ahead of schedule. This gives them a data point to better appropriate resources to fix schedule problems.

Why is Understanding Schedule Variance (SV) Important

A project manager’s main job is to know if a project is ahead of schedule, behind schedule, over budget, or under budget. Teams and companies put their faith in project managers to stay in charge of projects for the following reasons:

• The bottom line is affected by how projects are done. If a project is late, both the clients and those with a stake in the project stand to lose money. When this happens, it hurts the company’s reputation, which can cause it to lose money in the future.
• Internal teams are affected by disorganization. Teams are likely to lose morale and motivation if projects go off track and delays happen often. Teams are the happiest when their hard work pays off at the end of a project. But when a project gets stuck or doesn’t seem to end, team members start to lose faith.

Schedule Variance (SV) Results

The Schedule Variance Outcomes in Earned Value Management (EVM) are:

• Negative: Behind Schedule.
• Zero: On Schedule.

Schedule Variance (SV) Definitions

• This is the budget value of the work that has already been completed.
• This is the budget value of the work that is expected to have been completed by now.
• This is how much of the budget has been spent based on how much work has been done. You can figure this out by multiplying the total budget for the job by the percentage of work done.
• Planned Value (PV): This is how much of your budget you think you will have used based on how far you thought you would have come by a certain date. This can be worked out by multiplying the total budget for the project by the percentage of work that should have been done by now, based on the plan and the amount of time that has passed.

How to Calculate Schedule Variance

4 Schedule Variance (SV) Methods

Four (4) types of schedule variance (SV) methods exist. These methods are listed and explained below.

1. Schedule Variance (SV)
2. Schedule Variance %
3. Schedule Performance Indicator (SPI)
4. To Complete Schedule Performance Indicator (TSPI)

1. Schedule Variance (SV)

Schedule Variance indicates how much ahead or behind schedule the project is. Schedule Variance can be calculated using the following formula:

• Schedule Variance (SV) = Earned Value (EV) – Planned Value (PV)
• Schedule Variance (SV) = BCWP – BCWS

The formula mentioned above gives the variance in terms of cost which will indicate how much of the work is yet to be completed as per schedule or how much of work has been completed over and above the scheduled cost.

• Positive Schedule Variance: Indicates we are ahead of schedule
• Negative Schedule Variance: Indicates we are behind schedule

2. Schedule Variance %

Schedule Variance % indicates how much ahead or behind schedule, the project is in terms of percentage. Schedule Variance % can be calculated using the following formula:

• SV % = Schedule Variance (SV) / Planned Value (PV)
• SV % = SV / BCWS

The formula mentioned above gives the variance in terms of percentage which will indicate how much percentage of work is yet to be completed as per schedule or how much percentage of work has been completed over and above the scheduled cost.

• Positive Variance %: indicates % ahead of schedule
• Negative Variance %: indicates % behind of schedule

3. Schedule Performance Indicator (SPI)

Schedule Performance Indicator is an index showing the efficiency of the time utilized on the project. Schedule Performance Indicator can be calculated using the following formula:

• SPI = Earned Value (EV) / Planned Value (PV)
• SPI = BCWP / BCWS

The formula mentioned above gives the project team’s efficiency in utilizing the time allocated for the project.

• SPI value greater than (≥) 1: indicates the project team is very efficient in utilizing the time allocated to the project
• SPI value less than (≤) 1: indicates the project team is less efficient in utilizing the time allocated to the project

4. To Complete Schedule Performance Indicator (TSPI)

CPI is an index showing the efficiency at which the remaining time on the project should be utilized. This can be calculated using the following formula:

• TSPI = ( Total Budget – EV ) / ( Total Budget – PV )
• TSPI = ( Total Budget – BCWP ) / ( Total Budget – BCWS )

The formula mentioned above gives the efficiency at which the project team should utilize the remaining time allocated for the project.

• TSPI value greater than (≥) 1: indicates the project team can be lenient in utilizing the remaining time allocated to the project.
• TSPI value less than (≤) 1: indicates the project team needs to work harder in utilizing the remaining time allocated to the project.

Schedule Variance (CV) Example

An example of an SV is if it took a project four months to reach the mid-pointy but the scheduled amount of time was three months. The project had a schedule variance of one month. This is an unfavorable SV because the actual schedule exceeds the planned schedule.

There are some guidelines you should follow if you’re calculating schedule variance. What follows are three recommendations:

1. You should always check your work twice: If you try calculating the schedule variance in your head, you should check your work with a calculator.
2. Determine the schedule deviation at each project milestone: The pace at which projects evolve makes receiving frequent, real-time updates useful. This is an important consideration if you were behind schedule according to a previous computation and want to be sure you’re back on track.
3. Pay attention to quality control and scheduling changes: Even if you’ve finished your project early, the quality of your output may have suffered.
4. Keep track of your project’s schedule with the help of a Gantt chart. This will allow you to detect potential time conflicts and keep the project on track toward its primary goals.

EVM Definitions

– BCWP = Budgeted Cost of Work Performed
– ACWP = Actual Cost of Work Performed
– AC = Actual Cost