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CompTIA Project+
1 Project Environment
1-1 Project Management Overview
1-2 Project Life Cycle
1-3 Organizational Structures
1-4 Project Governance
1-5 Project Management Office (PMO)
1-6 Project Management Methodologies
1-7 Project Management Software
1-8 Roles and Responsibilities
1-9 Stakeholder Management
2 Project Initiation
2-1 Project Charter
2-2 Business Case
2-3 Project Selection Methods
2-4 Project Vision and Scope
2-5 Stakeholder Identification and Analysis
2-6 Project Governance and Control
2-7 Project Constraints and Assumptions
2-8 Risk Management Planning
3 Project Planning
3-1 Scope Management
3-2 Work Breakdown Structure (WBS)
3-3 Schedule Management
3-4 Resource Management
3-5 Budget Management
3-6 Risk Management
3-7 Communication Management
3-8 Quality Management
3-9 Procurement Management
3-10 Change Management
3-11 Project Plan Development
4 Project Execution
4-1 Team Building and Leadership
4-2 Communication Management
4-3 Quality Management
4-4 Risk Management
4-5 Change Management
4-6 Procurement Management
4-7 Project Monitoring and Control
4-8 Issue Management
5 Project Monitoring and Controlling
5-1 Performance Measurement
5-2 Earned Value Management (EVM)
5-3 Variance Analysis
5-4 Trend Analysis
5-5 Risk Monitoring and Control
5-6 Change Management
5-7 Issue Management
5-8 Communication Management
5-9 Quality Control
6 Project Closing
6-1 Project Closure Process
6-2 Final Project Documentation
6-3 Lessons Learned
6-4 Stakeholder Satisfaction
6-5 Contract Closure
6-6 Financial Closure
6-7 Project Archiving
7 Professional Responsibility
7-1 Ethics and Professional Conduct
7-2 Project Management Certifications
7-3 Continuing Education and Professional Development
7-4 Legal and Regulatory Considerations
7-5 Cultural Awareness and Diversity
7-6 Sustainability and Social Responsibility
Variance Analysis Explained

Variance Analysis Explained

Variance Analysis is a critical tool in project management that helps identify discrepancies between planned and actual project performance. By analyzing variances, project managers can make informed decisions to keep the project on track and achieve its objectives.

Key Concepts

Detailed Explanation

Planned Value (PV)

Planned Value (PV) represents the budgeted cost of work that was scheduled to be completed by a specific time. It is derived from the project schedule and budget.

Example: If a project is scheduled to complete 40% of its tasks by the end of the first month, and the total budget is $100,000, the PV would be $40,000 (40% of $100,000).

Actual Cost (AC)

Actual Cost (AC) is the total cost incurred for the work performed by a specific time. It includes all expenses such as labor, materials, and overhead.

Example: If by the end of the first month, the project has spent $45,000 on labor and materials, the AC would be $45,000.

Earned Value (EV)

Earned Value (EV) is the budgeted cost of work actually completed by a specific time. It measures the value of the work performed in terms of the project budget.

Example: If by the end of the first month, the project has completed 30% of its tasks, the EV would be $30,000 (30% of $100,000).

Cost Variance (CV)

Cost Variance (CV) is the difference between the earned value (EV) and the actual cost (AC). A positive CV indicates that the project is under budget, while a negative CV indicates that the project is over budget.

Example: Using the previous examples, CV = EV - AC = $30,000 - $45,000 = -$15,000. This negative CV indicates that the project is over budget by $15,000.

Schedule Variance (SV)

Schedule Variance (SV) is the difference between the earned value (EV) and the planned value (PV). A positive SV indicates that the project is ahead of schedule, while a negative SV indicates that the project is behind schedule.

Example: Using the previous examples, SV = EV - PV = $30,000 - $40,000 = -$10,000. This negative SV indicates that the project is behind schedule by $10,000 worth of work.

Examples and Analogies

Consider a project to build a house. Planned Value (PV) would be the budgeted amount for the work scheduled to be completed by a specific time, such as the foundation. Actual Cost (AC) would be the total cost incurred for the work done, including labor and materials. Earned Value (EV) would be the budgeted amount for the work actually completed, such as the foundation and framing. Cost Variance (CV) would show if the project is over or under budget, while Schedule Variance (SV) would indicate if the project is ahead or behind schedule.

Understanding Variance Analysis helps project managers identify and address deviations from the project plan, ensuring that the project stays on track and achieves its objectives.

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