XempleX Solutions: Variance Analysis

Variance analysis allows you to identify and learn from the causes of unusual or unexpected business results. A result can only be 'unusual' in comparison to something else such as a historical precedent, a formal forecast based on documented business and mining principles, or the expectations of experienced staff.

Where did this number come from?

Unexpected results may be due to factors of time, cost, quantity, or activity, and identifying which is responsible can be time-consuming and difficult.

Odd patterns may only emerge once data has been consolidated. By this time traditional spreadsheet-based solutions have lost their links to the source data, and the opportunity for accurate and efficient detective work has been lost. 

For example, differences in final figures may be the result of unscheduled or delayed activities; failure to include all costs or allow for price increases within the planning period; or finding different quantities or grades of ore from that predicted by the geotechnical data. 

Variance analysis can improve the accuracy of forecasts and the forecasting process. An important part of developing a budgeting and forecasting model is determining the accuracy of the business logic. A model that fails to take into account all labour costs, for example, will not produce the same results as the actuals data for the same period.

A XempleX variance analysis solution provides the tools to test assumptions about cause and effect in your business, and to track down exactly where, when and how actuals diverged from forecasts.