SkarpChapter 8 of 20
Controlling Predictive Projects: Schedule Variance, Cost, and Project Controls
Move beyond static plans into active control by tracking performance, interpreting schedule variance, and using key artifacts to keep predictive projects on track.
From Planning to Controlling: Why Schedule Variance Matters
From Planning to Control
You learned to define scope with a work breakdown structure and build a predictive schedule. Now we shift from planning to control: keeping the project on track once work starts.
Predictive Life Cycle Context
We are in the Control processes of a predictive life cycle: scope, time, and cost are determined early, then actual performance is compared to those baselines.
Key Ideas in This Module
You will work with Planned Value (PV), Earned Value (EV), Actual Cost (AC), schedule variance (SV), project control artifacts, and when to use predictive vs adaptive approaches.
CAPM Focus
For the CAPM, you must calculate EV, PV, SV for simple scenarios, interpret the results, and recognize which artifacts are used to control predictive projects.
Earned Value Basics: PV, EV, and AC
Why Earned Value?
Earned value management combines scope, schedule, and cost into one performance view. It uses three core numbers: Planned Value (PV), Earned Value (EV), and Actual Cost (AC).
Planned Value (PV)
PV is the authorized budget for work scheduled by a given date. It answers: “According to the plan, how much value should we have earned by now?”
Earned Value (EV)
EV is the measure of work performed expressed in terms of the budget for that work. It answers: “Given what we actually completed, how much value have we earned?”
Actual Cost (AC)
AC is what we really spent for the work performed so far. All three numbers must refer to the same scope and status date before you calculate variances.
Schedule Variance: Canonical Definition and Interpretation
Canonical SV Definition
Schedule variance: "A measure of schedule performance expressed as the difference between earned value and planned value." The formula is SV = EV − PV.
Interpreting SV Values
SV = 0 means on schedule. SV > 0 (positive) means ahead of schedule. SV < 0 (negative) means behind schedule, all in terms of value of work.
SV Is About Schedule
SV is expressed in budget units but describes schedule performance. Do not confuse it with cost variance, which uses EV and AC instead.
Exam Traps
Watch for questions that imply positive SV means under budget. That is incorrect. SV says nothing about cost without looking at AC.
Worked Example: Calculating PV, EV, AC, and SV
Scenario Setup
A 4-week website project has 3 work packages with a total budget of 10,000. Status date: end of week 3. We will compute PV, EV, AC, and SV.
Planned Value at Week 3
By week 3, plan says WP1 and WP2 should be 100% complete. PV = 4,000 + 4,000 = 8,000.
Earned Value at Week 3
Progress: WP1 100%, WP2 50%, WP3 0%. EV = 4,000 + 2,000 + 0 = 6,000 based on budgeted values.
Actual Cost and SV
AC = 4,500 + 2,000 + 0 = 6,500. SV = EV − PV = 6,000 − 8,000 = −2,000, so the project is behind schedule.
Thought Exercise: Visualizing SV on a Simple Chart
Imagine a basic earned value chart for the example you just saw. The x-axis is time (weeks 1–4). The y-axis is value in currency units.
You have three lines:
- PV line: rises according to the plan. By the end of week 3 it reaches 8,000.
- EV line: rises according to actual completion. By the end of week 3 it reaches 6,000.
- AC line: rises according to actual spending. By the end of week 3 it reaches 6,500.
Now do this mental exercise step-by-step:
- Close your eyes and picture the PV line: it climbs steeply in weeks 1–3, then flattens as work finishes in week 4.
- Picture the EV line: it follows PV at first, then starts to lag behind in week 3, sitting below the PV line at 6,000 vs 8,000.
- Picture the AC line: it might sit slightly above the EV line, because you have spent 6,500 to earn 6,000 of value.
Questions to think through (you can say answers aloud or jot them down):
- At the end of week 3, which two lines determine schedule variance? Why?
- If EV were above PV at week 3, how would the graph look different, and what would that say about your schedule?
- If AC were much higher than EV, even while EV is above PV, what combination of schedule and cost performance would that represent?
Try to answer without looking back at the formulas. Then check yourself: schedule variance only cares about EV vs PV; cost performance only cares about EV vs AC.
Project Controls and Status Reporting in Predictive Projects
What Are Project Controls?
Project controls are the processes and artifacts used to monitor performance, compare it to the plan, and decide how to respond to variances in a predictive project.
Core Baselines
The schedule baseline and cost baseline provide planned dates and time-phased budgets. Together they let you calculate Planned Value over time.
Scope and the Plan
The scope baseline (scope statement, WBS, WBS dictionary) ensures EV and PV are based on the same agreed scope. All sit within the project management plan.
Reports and Changes
Performance reports show PV, EV, AC, SV. The change log tracks approved changes; once baselines change, you measure future SV against the updated baseline.
Quick Check: PV, EV, and SV Interpretation
Try this CAPM-style question to test your understanding of schedule variance.
A project has a budget of 50,000. At the end of month 2, the planned value (PV) is 20,000, the earned value (EV) is 15,000, and the actual cost (AC) is 18,000. Which statement is MOST accurate?
- The project is behind schedule and over budget.
- The project is ahead of schedule and under budget.
- The project is behind schedule but cannot determine cost performance from this data.
- The project is ahead of schedule but over budget.
Show Answer
Answer: A) The project is behind schedule and over budget.
SV = EV − PV = 15,000 − 20,000 = −5,000, so the project is behind schedule. CV = EV − AC = 15,000 − 18,000 = −3,000, so the project is over budget. Therefore, the project is behind schedule and over budget.
When to Use Predictive vs Adaptive vs Hybrid Approaches
Life Cycle Definitions
Predictive life cycle: scope, time, and cost are determined early. Adaptive life cycle: agile, iterative, or incremental; detailed scope is set before each iteration.
When Predictive Fits
Use predictive when requirements are stable, governance is strict, risk is moderate, and stakeholders expect baseline-driven reports like SV and CV.
When Adaptive Fits
Use adaptive when requirements are emerging, uncertainty is high, and stakeholders prefer frequent feedback and incremental delivery.
Hybrid Signals
Hybrid mixes both: for example, predictive for infrastructure, adaptive for software. Exam clues about EVM and strict baselines usually point to predictive.
Quiz: Choosing a Predictive Approach
Test your ability to select a predictive approach from a scenario.
Which project is MOST appropriate for a predictive life cycle with earned value and schedule variance reporting?
- A startup experimenting with a new mobile app concept where features change weekly based on user feedback.
- A government-funded highway extension with fixed design specifications and strict regulatory oversight.
- An internal innovation lab exploring multiple possible AI prototypes with unclear final scope.
- A small marketing team running social media campaigns that pivot monthly based on analytics.
Show Answer
Answer: B) A government-funded highway extension with fixed design specifications and strict regulatory oversight.
The highway extension has fixed design, strong regulatory oversight, and a need for tight governance and baseline reporting, which fits a predictive life cycle with earned value and schedule variance. The other options describe high uncertainty and changing requirements, better suited to adaptive approaches.
Key Term Flashcards: SV and Project Controls
Use these flashcards to reinforce key definitions and concepts from this module.
- schedule variance (SV) – definition
- A measure of schedule performance expressed as the difference between earned value and planned value.
- Schedule variance (SV) – formula
- SV = EV − PV. Positive SV means ahead of schedule; negative SV means behind schedule; zero SV means on schedule.
- Planned Value (PV)
- The authorized budget assigned to the work scheduled to be completed by a given date. Answers: “According to the plan, how much value should we have earned by now?”
- Earned Value (EV)
- The measure of work performed expressed in terms of the budget authorized for that work. Answers: “Given what we actually completed, how much value have we earned?”
- Actual Cost (AC)
- The realized cost incurred for the work performed during a given time period. Answers: “How much have we actually spent so far?”
- predictive life cycle
- A development life cycle in which the project scope, time, and cost are determined in the early phases of the life cycle.
- adaptive life cycle
- A development life cycle that is agile, iterative, or incremental. The detailed scope is defined and approved before the start of an iteration.
- Schedule baseline
- The approved project schedule, used as a basis for comparison to actual results. Provides planned start/finish dates and milestones.
- Cost baseline
- The approved, time-phased budget for the project, excluding management reserves. Used with the schedule baseline to derive PV.
- Scope baseline
- The approved scope statement, work breakdown structure, and WBS dictionary, which together define the project scope for control.
- Performance report
- A document or dashboard that communicates project performance information such as PV, EV, AC, SV, and other key indicators.
Mini Case: Interpreting SV and Next Steps
You are managing a predictive project to implement a new internal HR system. The organization expects formal status reports each month, including earned value metrics.
At the end of month 4:
- PV = 200,000
- EV = 210,000
- AC = 240,000
Think through these questions before revealing the reasoning to yourself:
- Schedule performance
- Compute SV. Are you ahead, on, or behind schedule? How do you know?
- Cost performance
- Quickly compute CV (EV − AC). Even though this module focuses on schedule, what does this say about cost?
- Message to stakeholders
- In one or two sentences, how would you summarize performance in a status report to a busy sponsor?
- Control actions
- Based on your interpretation, which area would you investigate first: schedule management or cost management? Why?
Now check your reasoning:
- SV = 210,000 − 200,000 = +10,000: the project is ahead of schedule in value terms.
- CV = 210,000 − 240,000 = −30,000: the project is over budget.
- A concise message might be: “We are slightly ahead of schedule but significantly over budget; we need to review cost drivers, especially labor rates and change requests.”
Link this back to project controls: you would use your performance reports, cost baseline, and change log to analyze where the overspend is coming from, while monitoring that positive SV to ensure schedule gains are real and sustainable.
Key Terms
- project
- A temporary endeavor undertaken to create a unique product, service, or result.
- stakeholder
- An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project, program, or portfolio.
- work package
- The work defined at the lowest level of the work breakdown structure for which cost and duration are estimated and managed.
- cost baseline
- The approved version of the time-phased project budget, excluding management reserves, used as a basis for comparison to actual results.
- scope baseline
- The approved scope statement, work breakdown structure, and WBS dictionary, which together define the project scope.
- Actual Cost (AC)
- The realized cost incurred for the work performed during a given time period.
- Earned Value (EV)
- The measure of work performed expressed in terms of the budget authorized for that work.
- schedule baseline
- The approved version of the schedule model that is used as a basis for comparison to actual results.
- schedule variance
- A measure of schedule performance expressed as the difference between earned value and planned value.
- Planned Value (PV)
- The authorized budget assigned to the work scheduled to be completed by a given date.
- adaptive life cycle
- A development life cycle that is agile, iterative, or incremental. The detailed scope is defined and approved before the start of an iteration.
- predictive life cycle
- A development life cycle in which the project scope, time, and cost are determined in the early phases of the life cycle.
- work breakdown structure
- A hierarchical decomposition of the total scope of work to be carried out by the project team to accomplish the project objectives and create the required deliverables.