What are the best practices for managing earned value variance in complex projects?

1 Understand the sources of variance

The first step to managing earned value variance is to understand where it comes from. Variance can arise from various factors, such as changes in scope, requirements, resources, quality, risks, dependencies, or assumptions. Some of these factors may be internal to your project, while others may be external or influenced by stakeholders. You need to identify the sources of variance and analyze their impact on your project objectives and constraints. This will help you prioritize and address the most critical issues and avoid unnecessary changes.

2 Use a consistent and realistic baseline

The second step to managing earned value variance is to use a consistent and realistic baseline for your project. The baseline is the reference point against which you measure the earned value and the variance. It should reflect the agreed scope, schedule, and budget of your project, as well as the assumptions and risks involved. You should also update the baseline regularly to account for any approved changes or deviations. A consistent and realistic baseline will help you avoid unrealistic expectations and inaccurate calculations of the variance.

3 Communicate and report the variance

The third step to managing earned value variance is to communicate and report it to the relevant stakeholders. You should use clear and concise formats and methods to present the variance, such as graphs, tables, dashboards, or indicators. You should also explain the causes and implications of the variance, as well as the corrective actions or recommendations you have taken or proposed. Communicating and reporting the variance will help you keep the stakeholders informed and engaged, as well as solicit their feedback and support.

4 Implement corrective actions and preventive measures

The fourth step to managing earned value variance is to implement corrective actions and preventive measures to address the variance and prevent it from worsening or recurring. Corrective actions involve revising the scope, schedule, or budget to align with the current situation, reallocating or acquiring additional resources to meet the demand, and improving the quality or efficiency of processes or deliverables. Preventive measures include resolving or escalating issues or risks that cause or contribute to the variance, as well as implementing change control or risk management procedures to minimize the impact of changes or uncertainties.

5 Review and learn from the variance

The fifth step to managing earned value variance is to review and learn from it. You should conduct regular and systematic reviews of the variance and its causes, effects, and solutions. You should also document and share the lessons learned and best practices from your experience. Reviewing and learning from the variance will help you improve your project management skills and knowledge, as well as enhance your project performance and outcomes.

6 Adapt and improve your EVM approach

The sixth step to managing earned value variance is to adapt and improve your EVM approach. EVM is not a one-size-fits-all technique, but a flexible and dynamic tool that you can customize and optimize for your project needs and context. You should evaluate and adjust your EVM approach according to the characteristics, complexity, and maturity of your project, as well as the feedback and expectations of your stakeholders. Adapting and improving your EVM approach will help you make it more relevant, effective, and efficient for your project.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?