Baseline vs Actual

in #variance6 years ago

The project network schedule, derived from the WBS/OBS, serves as the baseline to compare against actual performance. (Larson 459)

maxresdefault

This is interesting to me. The idea of ‘what I think will occur’ compared to ‘what actually occurs’ in a project. It all looks good on paper, until we attempt to accomplish it. As the process begins to be implemented, other unknown variables begin to emerge. Some of these variables should be obvious, but others become a learning curve.

Regarding Project Management, this difference between plan and action is referred to as variance. Depending on the difference this variance can be positive or negative. The purpose of watching these variances is to gain insight of why it may be positive (sell more) than negative (losing money). I found one interesting article with a real example comment it this way. “What’s important is not the accounting, the calculations, but rather the resulting management.” (Berry, 2018) The purpose is for the manager or owner to understand the real versus the assumption.

You can take this same scenario and apply it to culture, religion, politics, or a number of variables in one's worldview. As facts begin to be revealed, the variances will come out as positive or negative. Whether this particular scenario is positive or negative is dependent to the individual.

 

References:

Larson, Erik, Clifford Gray. Project Management: The Managerial Process, 6th Edition. McGraw-Hill Learning Solutions, 10/2013. VitalBook file.

Tim Berry. (2018). Plan vs. Actual Means Management. Retrieved from https://leanplan.com/plan-vs-actual-example/

 

#AuthorMattCole
http://MattCole.us