The schedule’s status (Did tasks start and finish on time?), although critical to nearly all projects, is only one indicator of overall project health. For projects that include cost information, another critical indicator is cost variance: Are tasks running over or under budget? Task costs in Project consist of fixed costs applied directly to tasks, resource costs derived from assignments, or both. When tasks cost more or less than planned to complete, cost variance is the result. Evaluating cost variance enables you to make incremental budget adjustments for individual tasks to avoid exceeding your project’s overall budget.
Another way of using project costs to measure past performance and predict future performance is earned value analysis. For more information about earned value analysis, type About earned value analysis into the Search box in the upper right corner of the Project window. The Search box initially contains the text Type a question for help. You can also see Chapter 19, “Measuring Performance with Earned Value Analysis.”
Although tasks and resources (and their costs) are directly related, it’s informative to evaluate each individually. In this exercise, you view task cost variance. Again you’ll start at the highest level—the project summary information.
On the Project menu, click Project Information.
The Project Information dialog box appears.
Click the Statistics button.
The Project Statistics dialog box appears.
In the Cost column, you can see the current, baseline, actual, and remaining cost values for the entire project:
The current cost value is the sum of the actual and remaining cost values.
The baseline cost value is the project’s total planned cost when its baseline was saved.
The actual cost is the cost that’s been incurred so far, that is, after 39 percent of the project’s duration and 44 percent of the total work have been completed.
The remaining cost is the difference between the current cost and actual cost.
Clearly, some cost variance has occurred, but you can’t tell from this information when or where it occurred.
Click the Close button to close the Project Statistics dialog box.
Next you will switch to views where you can examine cost variance more closely, starting with the Cost table.
On the View menu, point to Table: Variance, and click Cost.
You also can right-click the upper left corner of the active table, and in the shortcut menu that appears, click Cost.
The Cost table appears in the Task Sheet view. Your screen should look similar to the following illustration:
In this table, you can see each task’s baseline cost, scheduled cost (in the Total Cost column), actual cost, and variance. The variance is the difference between the baseline cost and the scheduled cost. Of course, costs aren’t scheduled in the same sense that work is scheduled; however, costs (other than fixed costs) are derived directly from the scheduled work.
Next you’ll focus on the top-level costs.
Click the Task Name column heading.
On the Formatting toolbar, click the Hide Subtasks button.
Project displays only the top three summary tasks, which in this project correspond to the major phases of the short film project. Because we’re currently working on tasks in the Production phase, we’ll direct our attention there.
Click the plus sign next to task 24, Production.
Project expands the Production summary task to show the summary tasks for the individual scenes. Your screen should look similar to the following illustration:
Looking at the Variance column, you can see that Scene 7 had some modest variance, but Scene 1 had significantly more. Next you’ll focus on the details for Scene 1.
Click the plus sign next to summary task 37, Scene 1.
Project expands the Scene 1 summary task to show the subtasks. Your screen should look similar to the following illustration:
Looking at the Variance column, you can see that the Scene 1 rehearsal accounts for much of the variance for the Scene 1 summary task.
Click the Task Name column heading.
On the Formatting toolbar, click the Show Subtasks button.
Project expands the task list to show all subtasks.
To conclude this exercise, you will use the Project Guide to examine task costs. The information is similar to what you’ve seen before, but the Project Guide includes a handy explanation of variance and a short list of the most relevant filters.
On the Project Guide toolbar, click the Report button.
In the Report pane, click the See project costs link.
The Project Guide: Analyze Costs view appears. Your screen should look similar to the following illustration:
This view is similar to the Task Sheet view with the Cost table applied, which you displayed in step 4 of this exercise. In the Project Costs pane, you also have quick access to the filters most relevant to project costs.
In the Project Costs pane, under Apply a filter, click Cost Overbudget in the drop- down list.
Project filters the task list to show only those tasks that had actual and scheduled costs greater than their baseline costs. Your screen should look similar to this illustration:
Note the gaps in the task ID numbers, indicating which tasks are not shown with this filter applied.
In the Apply a filter box, click No Filter Applied.
Project removes the filter.
Click the Show/Hide Project Guide button on the Project Guide toolbar.
The Project Guide closes.
What caused the task cost variance in the short film project? Because this project’s costs are almost entirely derived from work performed by resources, we can conclude that more work than scheduled has been required to complete the tasks up to now.
As we noted earlier, task and resource costs are closely related; in most cases the task costs are mostly or fully derived from the costs of resources assigned to tasks. Examining resource costs is the subject of the next exercise.
Here are a few more tips and suggestions for working with cost data:
To see tasks that are over budget, you can use the Overbudget Tasks report. On the View menu, click Reports. In the Reports dialog box, double-click Costs, and then double-click Overbudget Tasks.
The Cost Overbudget filter and all the other filters in the Project Costs pane of the Project Guide are also available in the More Filters dialog box (on the Project menu, point to Filtered For: All Tasks, and then click More Filters) and via the Filter button on the Formatting toolbar.
To see work variance in the Work table, in a task view on the View menu point to Table, and then click Work. You can also compare timephased baseline and scheduled work in a usage view. For example, in the Task Usage view, on the Format menu, point to Details, and click Baseline Work.
In this exercise, you have viewed cost variance for a task. To see cost variance for assignments to a task, switch to the Task Usage view, and then apply the Cost table.