Project schedule variance (PSV)

Projects are temporary, coordinated efforts undertaken to create defined outputs or outcomes within agreed constraints. Unlike continuing operations, they have an authorised beginning and end. Because much organisational change is delivered through projects, schedule performance is an important—but incomplete—view of execution.

When to use it

• Answer the key performance question: “To what extent are our projects delivered on schedule?”

• Include the KPI in the operational processes and supply-chain perspective.

• Establish the baseline, unit of time, data process, reporting frequency and tolerance before calculation.

• Compare results with approved milestones, relevant project classes and the organisation’s own forecasting history.

Origins

Comparing actual and planned completion dates is a basic project-control practice rather than a measure attributable to one inventor. The PSV in this article is a simple duration variance. It is different from earned value management’s schedule variance, which compares earned value with planned value and is expressed in monetary units.

What it is

Perspective: Operational processes and supply chain perspective.

Key performance question: To what extent are our projects delivered on schedule?

Monitoring schedule performance supports current intervention, future estimating and early detection of deviation. It should be considered with three questions:

1. Is the project on schedule?
2. Is the project on budget?
3. Is it delivering the specified scope and outcomes at the required quality?

A schedule result without budget and outcome context can be misleading. Finishing early may reflect efficient delivery, but it can also indicate conservative planning or omitted work.

Historical projects illustrate how large schedule changes can accompany cost escalation. London’s new Wembley stadium opened in 2007 after originally being scheduled for 2003. The Sydney Opera House was scheduled to open in 1963 for $7 million and opened in 1973 at a reported cost of $102 million.

PSV compares scheduled completion time with actual completion time. A result of zero means the project finished on the planned duration; a negative result indicates it took longer; and a positive result indicates it finished sooner. Define whether the inputs represent elapsed duration, working days or dates, and apply the same calendar to both.

How to use it

Measurement

Approve a realistic schedule baseline with scope, calendars, milestones and dependencies. Record authorised changes and actual completion consistently. During execution, combine milestone variance with forecasts and critical-path analysis, because a completed-project measure arrives too late to guide the work.

Data collection method

Take the scheduled completion duration from the controlled baseline and the actual duration from verified project records. For active projects, record actual starts and finishes, remaining duration and forecast completion rather than relying on subjective percentage-complete estimates.

Formula

PSV = SCT − ACT

Where ACT is the actual completion time

And SCT is the scheduled completion time

ACT and SCT are measured in time intervals such as days or weeks.

For several projects, individual variances can be added to show total time difference only when the units and interpretation are comparable. A weighted average or distribution is usually more meaningful than a straight average across projects of very different scale.

Frequency

Monthly review is common, but important short-duration work may need more frequent updates. Choose a cadence that allows corrective action without creating reporting noise.

Source of the data

Use the approved schedule, change-control records and verified actual dates from the project-management system. Manual records can work if ownership and cut-off rules are clear.

Cost/effort in collecting the data

The calculation is inexpensive when teams maintain a controlled schedule and reliable actual dates. Effort rises when schedules are disconnected, baselines move without approval or progress data must be reconstructed manually.

Target setting/benchmarks

A result near zero indicates completion close to plan, but tolerances should reflect the uncertainty and class of project. Negative results indicate delay and often carry cost or benefit implications. Positive results merit review: they may show strong execution, an overly cautious baseline or incomplete scope.

Example

A division is running three projects:

PSV Project A = 72 − 85 = −13

PSV Project B = 30 − 33 = −3

PSV Project C = 15 − 12 = 3

PSV Department = (−13) + (−3) + (3) = −13

The combined result is adverse, but leaders should inspect the criticality and causes of each variance rather than assume that days across unrelated projects are economically interchangeable.

Top practical tip

A time ratio can support comparison: PSPI = SCT / ACT. Under this convention, a value below 1 means the project took longer than planned and a value above 1 means it finished faster. Label it clearly because the standard earned-value schedule performance index uses earned value and planned value instead.

Top pitfall

Do not manage schedule from one aggregate variance. Review critical-path movement, milestone reliability, dependencies, authorised scope changes, budget and quality. Time gained on a non-critical activity does not necessarily offset delay to a benefit-critical milestone.

Further reading

http://management.energy.gov/documents/performance_measures_final.pdf

www.ajdesigner.com/phpearnedvalue/schedule_variance_equation.php