Variance at Completion (VAC)
DE: Abweichung bei Fertigstellung (VAC)
The projected budget surplus or deficit at project completion: BAC - EAC.
Detailed Explanation
VAC is a projection of the budget surplus or deficit expressed as the difference between the Budget at Completion and the Estimate at Completion: VAC = BAC - EAC. A positive VAC means the project is projected to finish under budget; negative means over budget.
VAC provides the simplest answer to the stakeholder question: 'By how much will we be over or under budget at the end?' It translates EVM metrics into a single, easily understood number.
VAC is only as accurate as the EAC it is based on. If the EAC uses optimistic assumptions, VAC will understate the overrun. PMs should present VAC based on multiple EAC scenarios (optimistic, most likely, pessimistic) for a complete picture.
Key Points
- Formula: VAC = BAC - EAC
- Positive = projected under budget; Negative = over budget
- Simplest answer to 'how much over/under budget will we be?'
- Accuracy depends on the EAC calculation method used
- Present multiple scenarios for a complete picture
- Updated whenever EAC is recalculated
Practical Example
Project BAC = EUR 800K. Current EAC = EUR 920K. VAC = 800K - 920K = -EUR 120K. The project is projected to finish EUR 120K over budget. The PM presents this to the sponsor with three scenarios: optimistic VAC = -EUR 80K, most likely = -EUR 120K, pessimistic = -EUR 180K, requesting additional funding of EUR 120K with EUR 60K management reserve.
Tips for Learning and Applying
Always present VAC alongside the EAC method used
Calculate VAC using multiple EAC formulas for confidence ranges
Negative VAC early in the project is easier to address than late
Use VAC trends to show whether the budget situation is improving or worsening
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