If a project is completed ahead of schedule, it demonstrates a positive variance, indicating that the project team was able to deliver the project faster than planned. Similarly, variance analysis can be applied to project schedules. On the other hand, if the actual costs exceed the planned costs, it represents a negative variance, suggesting that the project is over budget. For example, if the actual costs of a project are lower than the planned costs, it signifies a positive variance, indicating that the project is more cost-efficient than anticipated. These variances can be either positive or negative, indicating whether the project is performing better or worse than expected. One of the main objectives of variance analysis is to identify and understand the reasons behind project variances. By comparing planned costs, schedules, and performance metrics with the actual results, variance analysis helps identify the root causes of discrepancies, enabling project teams to take corrective actions and improve future project performance. It provides project managers with valuable insights into the progress and success of their projects by identifying areas of deviation from the original plan. Variance analysis is a powerful tool used in project management to measure and analyze the difference between planned and actual performance.
