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Variance Analysis

A method used to identify why results differ from the baseline and to measure how large those differences are.

Key Points

  • Compares actual results to baseline plans for cost, schedule, and other performance areas.
  • Quantifies the size of the deviation and investigates root causes.
  • Supports corrective and preventive actions and informs forecasts (for example, EAC in EVM).
  • Performed during monitoring and controlling, often alongside trend and earned value analysis.

Example

At the end of month 3, the project planned value is USD 300,000, earned value is USD 250,000, and actual cost is USD 280,000. Variance analysis shows SV = -50,000 and CV = -30,000. The team traces the cause to a vendor delay and overtime costs, then updates the schedule and cost forecasts and implements corrective actions.

PMP Example Question

During Control Costs, the project manager sees that actual costs are higher than planned. Which technique should be used to determine why the deviation occurred and how large it is compared to the baseline?

  1. Trend analysis
  2. Variance analysis
  3. What-if scenario analysis
  4. Reserve analysis

Correct Answer: B — analyzing differences from the plan and their causes

Explanation: Variance analysis compares actuals to the baseline to quantify the gap and identify root causes, enabling targeted corrective action.

Advanced Project Management — Measuring Project Performance

Move beyond guesswork and status reporting. This course helps you measure real progress, spot problems early, and make confident decisions using proven project performance techniques. If you manage complex projects and want clearer visibility and control, this course is built for you.

This is not abstract theory. You’ll work step by step through Earned Value Management (EVM), learning how cost, schedule, and scope come together to show true performance. You’ll build a solid foundation in EVM concepts, understand why formulas work, and learn how performance data actually supports leadership decisions.

You’ll master Work Breakdown Structures (WBS), control accounts, and budget baselines, then apply core EVM metrics like EAC, TCPI, and variance analysis. Through a detailed real-world example, you’ll forecast outcomes, analyze trends, and understand contingencies and management reserves with confidence.

Learn how experienced project managers monitor performance, communicate results clearly, and take corrective action before projects slip. With practical exercises and hands-on analysis, you’ll be ready to apply EVM immediately. Enroll now and start managing performance with clarity and control.



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