Variance Responses

As previously mentioned, the first goal of our project control system is to prevent any variance. However, we also realize variances and changes will occur—this is the nature of the project beast. Thus, the remaining goals of project control are centered on early detection and appropriate response. Let’s review the general response options that are available to us as project managers when a variance occurs:

• Take corrective actions—The preferred option, whenever possible, is to understand the root cause of the variance and then implement action steps to correct the variance. When performance measurement is frequent, it is more likely that action can be taken that will make a difference. Examples of corrective actions include adding resources, changing the process, coaching individual performance, compressing the schedule (fast-tracking or crashing), or reducing scope (this would be documented as a change request, too).
• Ignore it—In cases where the variance is small (and falls within an acceptable threshold range), you might choose to take no action to resolve the deviation. Even in these cases, it would be advisable to log the variance as a risk factor.
• Cancel the project—There might be times when the appropriate response is to cancel the project altogether. This response is more likely on projects where one or more key assumptions have not held or when one or more of the critical success factors has a very low tolerance for any deviations.
• Reset baselines—While taking corrective action is the preferred option for performance variances, there are times when the variance cannot be eliminated. This is common on knowledge-based projects and common on projects where the estimating assumptions have not held. In these cases, a decision to reset the performance baselines is made and approved. From that point on, performance is measured from this revised baseline. (EVM) is the best project control technique for early detection of project performance variances.