Variance Analysis
Variance analysis is a quantitative technique used to compare planned or budgeted performance against actual results to identify and explain deviations. It involves calculating differences in key metrics like costs, revenues, or time, and analyzing the root causes of these variances to inform decision-making and improve future planning. This methodology is widely applied in fields such as finance, project management, and manufacturing to monitor performance and control processes.
Developers should learn variance analysis when working on projects with budgets, timelines, or performance metrics, as it helps track progress, identify inefficiencies, and optimize resource allocation. For example, in software development, it can be used to analyze cost overruns in cloud infrastructure, delays in sprint timelines, or deviations in code quality metrics, enabling data-driven adjustments and better project outcomes.