Project Variances, Solve Just the Real Problems

Work Breakdown Structure
Dick Billows, PMP

Project variance is what gives executives nightmares about project failure. They are the calculated difference between the approved project plan’s costs and duration and the actual project results. We can have project variance vs.  schedule where we identified that a task should have been finished by July 1 and it was actually finished by July 5. That’s a four day bad variance. We can also have project variance on the project budget. Let’s say a task was planned to cost $5,000 and it actually cost $4,500 when we were done. That’s a $500 good variance.  Project Tracking Reports Main Page

We can also have project variance on the characteristics of the deliverable and on the planned work versus the actual work. The most important thing about project variances is we do not have to wait until the task is completed to identify a variance. Project managers get information from their team members’ status reports. Using project management software, they take the information about the actual results versus the plan and they forecast variances when the task is done. That allows the project manager to start corrective action before the task is actually finished.

Another major use of project variance is in status reporting to the project sponsor. Having the variance data allows the project manager to show the sponsor how the project is going and what tasks are on schedule and what tasks are not. One of the techniques that separates consistently successful project managers from the rest of the pack is their ability to identify problems early, when they are small and easily solved. Unsuccessful project managers are routinely surprised by big problems that they find out about when it’s too late to fix the damage that’s been done.

The important thing to remember when your project sponsor becomes hysterical about a variance is that we do not have to take corrective action about every variance. If we have a 5 day variance on a task’s forecasted completion date, We do not have to order overtime for the whole team.  If you have used professional scheduling techniques, you will be able to quickly determine if the task is on the critical path and if not how much slack it has. I the task has 10 days of slack you should do nothing about the variance because the slack can absorb it and it will not affect the project completion date. You also need to check if the variance is a signal of a growing problem. But that is an example of when we can ignore a variance.

A few prudent steps during project planning can make all the difference. To spot problems early, you need unambiguous, measurable checkpoints in the project so you don’t have to guess whether you’re on track. With the deliverables defined by metrics, you will know exactly where you are. That’s what lets you take action at the first sign of a problem. Do you want to be regularly surprised by problems when it is too late to fix them or do you want to spot problems early and fix them before they mushroom? How to Write a Weekly Status Report

At the beginning, when you and Dick talk to design your program and what you want to learn, you will select case studies that fit the kind of projects you want to manage. Chose you course and then select the which specialty case study from business, or marketing,  or construction, or healthcare, or consulting.  That way your case studies and project plans, schedules and presentations will fit your desired specialty.

  1. 101 Project Management Basics
  2. 103 Advanced Project Management Tools
  3. 201 Managing Programs, Portfolios & Multiple Projects
  4. 203 Presentation and Negotiation Skills
  5. 304 Strategy & Tactics in Project management

Author: Dick Billows, PMP

Dick has more than 25 years of project and program management experience throughout the US and overseas. Dick was a partner in the 4th largest professional firm and a VP in a Fortune 200 company. He trained and developed 100's of project managers using his methodology. Dick is the author of 14 books, over 300 articles and director/producer of 90 short project management training videos. He and a team of 25 project managers work with client companies & students across the US and in Europe, South America, Asia and the Middle East. They have assisted over 300 organizations in improving their project performance. Books by Dick Billows, PMP are on