Financial Management Variables

All these calculations deal with comparing the current status to the budget in some way. One group simply subtracts, producing a variance that is the difference between actual and budgeted; the second group, the indexes, divide to show you the ratios relative to those measurements. All these numbers might be useful to calculate, although in smaller IT projects not all of them will be necessary.


Variances show the difference between that which was budgeted and the actual costs expended. A positive variance shows that you' ve saved money or time and might be able to reapportion the savings elsewhere in the project. A negative variance states that you re either over budget or behind schedule for a given task—requiring that you take action. Cost variance

The cost variance (CV) simply represents the difference between a task' s estimated (budgeted) cost and its actual cost. Here is its formula:

Was this article helpful?

0 0

Post a comment