Friday, June 25, 2010

That pesky schedule variance thing

Ever once in a while the argument comes up about EV -SV, the schedule variance in the earned value management (EVM) practice.  Hopefully, everyone reading this knows EV is earned value and PV is planned value, but some know it as Work Performed (WP) - Work Scheduled (WS), or as the DoD Gold card presents it: BCWP - BCWS.

Any way you write it, it's more useful to understand it as a value variance.  After all, it is the difference between two values--earned and planned--denominated in dollars; neither are a cost--both are a value measurement.

The nice thing about thinking about this as a value variance rather than a schedule variance is that the thought is consistent at all the boundary conditions and points.  One boundary point is where EV reaches PV--all the planned value is earned.  The EV - SV calculation is now $0.  As a value variance: no conceptual problem: all the value has been earned.

As a schedule variance, we have to think like a pretzel to explain how the variance can be zero under two of three boundary conditions: the project finishes early, the project finishes on-time, the project finishes late.  In all three cases, the variance can be zero  (if all value is earned) but the three conditions are really quite different vis a vis schedule variance.  Zero schedule variance doesn't compute; they share only one attribute: the value variance is zero.

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2 comments:

  1. John,
    Here's a though I had on this topic
    http://www.slideshare.net/galleman/schedule-variance-0-and-were-a-year-late

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  2. Glen: thanks for the link. You're right: efficiencies are the place to focus, SPI and CPI. If inefficient, outcomes can't be favorable.

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