How to Isolate Unfavorable Work and Cost Variances in Microsoft Project

Introduction

Keeping your project under control requires a periodic look for tasks that are not progressing as originally planned. As a first step, you must track progress by entering Actual Work, Remaining work, Actual Start and Actual Finish. Once you have captured this information you’re ready to analyze plan variances–that is: tasks where progress is out of sync with the baseline (original estimates).

Project automatically calculates the difference between current progress and original estimates and places the result into 5 different variance fields, as follows:

• Work Variance = (Work – Baseline Work)
• Cost Variance = (Cost – Baseline Cost)
• Start Variance = (Start – Baseline Start)
• Finish Variance = (Finish – Baseline Finish)
• Duration Variance = (Duration – Baseline Duration)

For the purpose of this post, we will focus on the first of these, Work Variances. To learn more about Start, Finish and Duration Variances in MS Project, see this post. I find it easier to remember these fields as follows: think of Work as “Current Estimated Work” and Baseline Work as “Original Estimated Work.” The Work Variance is then the difference between your Current Estimated Work and your Original Estimated Work. The same holds true for the other four variance fields listed above.

Note that anytime the “Current Estimated” values are higher than the “Original Estimated” (Baseline) values, the resulting variance will be a positive number.  This means that any variance that is greater than zero is exceeding your original estimates and so is “unfavorable.”

The easiest way to hone in on unfavorable variances is to build a set of tables and filters that are combined into views so that it’s easy to quickly locate them. Let’s look at how we can construct these views to catch trouble early.

Isolating Unfavorable Work Estimates for Tasks

The first analysis we’ll perform is for work estimates that are higher than the original Baseline Work. We’ll use a “Single View”–which combines a filter and a table–so that we can view a table that contains all the relevant work-related fields alongside a filter to look for unfavorable Work Variances.

Figure 1 shows the contents of the Work Table.  From the View:Data tab on the ribbon, choose Tables, then scroll down to More Tables.

Figure 1:

Figure 2 shows the contents of the Work Overbudget filter.

From the View:Data tab on the ribbon, use the drop-down list against the Filter icon, then More Filters.

From the More Filters dialog box, click on the filter named “Work Overbudget,” and then the Edit button. As you can see, the Work Overbudget filter looks for tasks that have Work in excess of Baseline Work and Baseline Work not equal to “0h” (meaning there was work scheduled to the task and the task was baselined).*

Figure 2:

Now, let’s build a View that combines the Work table with the Work Overbudget filter. In the More Views dialog box, click on the New button.

In the Define New View dialog box, click on Single View, then OK. Figure 3 shows the View Definition dialog box with the proper options applied. In the Name field, type “Work Variance.” In the Table drop-down, choose “Work.” In the Group drop-down, choose “No Group.” In the Filter drop-down, choose “Work Overbudget.” To add this new view to your View menu, select the Show in Menu option box. Click OK.

Figure 3:

You are now ready to apply the new Work Variance view to look for tasks with work estimates higher than you originally predicted. From the More Views dialog, select “Work Variance” and click Apply. Figure 4 shows a typical sample of this view.

Figure 4:

Modifying the Work Overbudget Filter to Be Proactive

You may wish to look for unfavorable Work Variances for tasks that are not complete. These are the tasks that you might still be able to finish withint their estimated work amount by reducing the scope. In the previous example, we looked at all tasks with unfavorable work variances, including completed tasks. Now let’s modify the Work Overbudget filter to look for tasks that are in trouble, but not yet complete.

From the Vew:Data tab on the ribbon, use the drop-down list against the Filter icon, then More Filters. From the More Filters dialog box, select the filter named “Work Overbudget,” and click Edit. On the third line, type “And” in the And/Or column. Under the Field Name, choose “Remaining Work” from the drop-down. In the Test field, type (or choose from the drop-down) “is greater than.” In the Value(s) field, type “0h.” Figure 5 shows the new Work Variance filter.

Figure 5:

Click Save. Now when you run your new Work Variance view, you will see unfavorable work variances for tasks that still have not completed, as in Figure 6.

Figure 6:

Closing Thoughts on Variance Analyses

Working with Large Plans

For a large work plan, you may find that looking at variances at the task level provides too much detail. In this case, use the Show Outline Level option to automatically limit the displayed project to a selected number of top levels. From the View:Data ribbon, select the Outline function. From here, click on whichever number of levels you want to see displayed

Resource Work Variances

The Work Variance view you created to look at unfavorable task variances can also be built to look at unfavorable Work Variances by resource. In this case, start by applying the Resource Sheet. Follow the same steps you followed in the previous example (see Isolating Unfavorable Work Estimates for Tasks) to build a new Single View, this time naming it Resource Work Variances. Use the Work table and Work Overbudget filter again, but this time, next to Screen, choose the “Resource Sheet.” The resulting options should look as follows:

Figure 7:

Caution When Interpreting Variances

Whenever you view Work Variances, you are looking at a “raw” number. These raw numbers can be deceiving. For example, a 6-hour variance might be viewed as more serious than a 4-hour variance, but what if the 6-hour variance is for a task with Baseline Work of 100 hours and the 4-hour variance is for a task with Baseline Work of 20 hours? The 6-hour variance is 6% of the total Work while the 4-hour variance is 20% of the total Work. You may wish to consider the “Percent Variance” before determining which tasks require the most attention.

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Now that you know how to analyze a work plan for unfavorable work variances, you are ready to stay in control by revising your plan to recover your schedule and complete on-time and on-budget. Successful project management relies on the project manager’s ability to spot trouble early through good tracking and analysis practices.

In the next post, we’ll cover how to track Start, Finish and Duration Variances.

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