Schedule variance and effort variance are the values which the corporate management wants to see in a project. This will help them analyse the performance of the project. Variance calculation is trickier but is very easy.
Basic inputs are derived from the task planner or the task tracking sheet. This is the sheet that you maintain within the WBS. WBS has tasks and their respective start date and end dates which are estimated in the project initiation phase. Project Manager or team members have to update this sheet regularly with the actual dates when the task was done, as well as the hours spent on each task. These values form the basis for the variance calculation.
Now that you have estimated start and end dates of a task and the actual start and end dates of a particular task, it is time to calculate the variance. The difference between these estimated end date and actual end date becomes the Schedule Variance.
For example, if a task is estimated from 22-Feb-2016 to 27-Feb-2016 (6 days), but the task was actually performed between 24-Feb-2016 to 3-Mar-2016 (8 days), the variance is 4 days, since the dependent tasks are pushed by 4 days each. This calculation is for individual tasks. For deriving final variance we have to consider the project estimated end date and the actual end date.
It may also happen that a task was delayed by X days, but the overall project end date did not change. In such case the Schedule variance is zero.
This is determined by the difference between the estimated efforts in hours and the actual hours spent.
For example, if a task is estimated as 56 hours and the actual hours are 78 hours, the variation is 56-78 = 22 hours. Now this 22 hours is converted to percentage. 56hrs = 100%, so 78hrs = 139%. So calculated variance percentage is 39% for a particular task.
Effort variance will be calculated on the totals. i.e. total estimated hours of all the tasks and total actual hours of the tasks. Then difference is calculated and that becomes your Effort variance.
Schedule and Effort variances can be calculated for sprints, milestones and most of the time, for the complete project.
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