Project managers are responsible for tasks across every part of a business. They have to schedule work, manage people, manage budgets and wrangle technology—just to name a few. If you had to boil it down and define the core function of a project manager in just one sentence, it would be something like, “Project managers ensure work is finished on time and within budget.” But how does a project manager actually know whether a project is within scope, or falling behind? They use a powerful calculation that quantifies and measures project progress called schedule variance. What is Schedule Variance? Schedule variance (SV) is a calculation that measures whether a project is on track by calculating actual progress against expected progress. Schedule variance allows project managers to bring data into the conversation. Instead of saying, “The project is falling behind a little bit,” one could say, “The project is 20 percent behind where it should be.” Schedule variance can be calculated manually by hand, but it’s much more effective to utilize a project management software so that it can update dynamically and change in real time as the project progresses. How to Calculate Schedule Variance To calculate schedule variance, subtract the Budgeted Cost of Work Scheduled (BCWS) from the Budgeted Cost of Work Performed (BCWP). All values used will be a monetary figure (USD, GBP, etc.). Here’s the formula: BCWP – BCWS = SV Sometimes you will see this formula as EV – PV, but it means the same thing: EV (Earned Value) – PV (Planned Value) = SV To utilize this formula, we first need to define BCWP and BCWS: BCWP (Budgeted Cost of Work Performed): This is the budget value of the work that has already been completed. (Total Project Budget) X (The Percentage of Work That Has Been Completed) BCWS (Budgeted Cost of Work Scheduled): This is the budget value of the work that is expected to have been completed by now. (Total Project Budget) X (The Percentage of Work That Should Be Done By Now, Based On Time Elapsed) An Example Calculation To help you fully understand this calculation, let’s use an example scenario and plug in the numbers. Let’s say you’re managing a project that will last 20 days and the total project budget is $100,000. In this example, you are 10 days (or 50%) into the project, so you should have completed $50,000 (50% of total budget) worth of work by this point. But, unfortunately, you’ve really only finished $25,000 of work. Here is what it looks like when you plug the numbers into our schedule variance formula: BCWP ($25,000) – BCWS ($50,000) = SV (-$25,000) Then, to express schedule variance as a percentage, simply divide: SV (-$25,000) / BCWS ($50,000) = -.5 or -50% This figure tells you that your project is 50% behind where it should be at this time. If the resulting number is a positive number, then your project is ahead of schedule. If the schedule variance comes out as zero, then the project is exactly where it should be! Why Schedule Variance is Important Knowing whether a project is ahead or behind schedule and over or under budget is a core responsibility of a project manager. Project managers are trusted by their teams and by their companies to stay in control of projects because of the following reasons: Project delivery affects the bottom line. If a project is late, clients and internal stakeholders stand to lose financially. When this happens, it threatens the reputation of the company—which can lead to future losses! Disorganization affects internal teams. If projects slide off the rails and delays happen often, teams are likely to lose morale and motivation. Teams are the happiest when their hard work pays off at the end of a project. However, when a project stalls or a project never seems to finish, team members begin to lose faith. Using A Project Management Dashboard To Calculate SV Although the calculation is simple, it can rapidly become a tedious task to crunch the numbers by hand, considering the calculations should be re-crunched every day as the project changes. On large projects, keeping track of thousands of data points becomes impossible. That’s why savvy project managers choose to use a project dashboard to run their calculations, saving valuable time and resources. ProjectManager.com Dashboards for Schedule Variance ProjectManager.com’s software was designed by professional project managers after they noticed a need for better tools on their own projects. When managing any project, particularly large ones, a PM’s time is best spent moving work forward—not running equations all day. Our project dashboards are built to give you real-time information about tasks, teams, and budgets. Here’s how they work. Enter Resources and Budgets When you build a new project, start by adding your total project budget. This number will act as a reference point as the work progresses, and graphs will be generated that allow you to quickly see if the project is within budget or at risk of going over. Additionally, you will add two types of resources to your new project: people and things. People are internal team members and outside contractors who will be working on the project. Things are other resources that have costs like room rentals, equipment and travel. Data Rolls Up Automatically When you set a cost rate for each person, and that person logs time on their tasks, the software will automatically organize the data in the dashboard. The same goes for non-human resource costs—the data rolls up into the dashboard for easy viewing. This information can be used to see, in real time, whether a project’s schedule and its budget is over or under target. Schedule variance is automatically calculated. A Closer Look At The Dashboards Schedule variance is just one of the metrics that will be automatically calculated for you. In addition to variance, you also will see graphs for Health: An overview of the pacing and progress of all project work Tasks: A breakdown of which tasks are started, completed, or yet to be worked Progress: A zoomed-in look at the progress of each task, to see where each piece of work is at Time: A look at planned vs. actual project completion Workload: A visual representation of each team member’s workload and availability ProjectManager.com Is the Best Scheduling Software The project dashboard is just one small piece of the software suite offered by ProjectManager.com. The software is used by thousands of teams and companies including NASA, Volvo and Bank of America for project planning, collaboration, monitoring and reporting. Our powerful Gantt charts enable users to plan projects of any size. Enter tasks with start and due dates and they are plotted out on a visual timeline, making it easy to see the whole project at a glance. Team members also love ProjectManager.com because it makes work management simple. They can see the work that needs to be done in task lists, kanban boards and calendars. To see ProjectManager.com’s software in action, and calculate your project’s schedule variance, take a free 30-day trial. For 30 days you’ll be able to use all of the powerful project management tools we offer, at no cost to you. Get planning, monitoring, reporting and collaboration all in one software suite. Click here to start your free trial today! 6 Tips for Better Schedule Management What Is Microsoft Project? Uses, Features and Pricing How to Create a Project Management Schedule (Example Included) The 10 Project Management Knowledge Areas (PMBOK)