Variance Responses

If the variance is due to estimating errors or estimating assumptions that have not held up, you should update your estimates and assumptions based on your actual experiences, and use this new information as the basis for the revised baseline.

As we have mentioned, the first goal of our project control system is to prevent any variance. However, we also realize variances and changes will occurthis 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 (the project) 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 get the variance corrected. 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, 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 may 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 project There may 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. Then from this point on, performance is measured from this revised baseline. This is part of the change control procedures we will discuss more in Chapter 11.

caution

Approved change requests would cause a baseline revision too.