Adapting Earned Value Management to Different Project Levels Based on Complexity

Abstract

The Construction Industry holds an important role by contributing around 6% to the Gross Domestic Product (GDP) based on data from Market Prospects. Despite this substantial contribution, numerous projects within the industry struggle to attain their objectives effectively. Project uniqueness, coupled with the impact of project complexity, leads to difficulties in project identification and inaccurate selection of control methods. Thus, appropriate project identification, control method selection, and monitoring techniques are vital to anticipating such issues. Earned Value Management (EVM) emerges as an advanced monitoring method to anticipate the issues that include scope, time, and budget as controlled variables within a project. However, there remains a research gap in how to effectively apply EVM to diverse project types to effectively monitor the project. Through this gap, therefore a research question emerges:
“How to adapt Earned Value Management to various levels of projects based on the project complexity?”
To answer this question, the study will first outline significant aspects within EVM and assess the maturity level of organizations implementing EVM. Van Oord is chosen as the study location to gather data on their EVM application. The study then delves into potential adaptations of EVM and its effective application across diverse project types.
The research yields several significant outcomes. Firstly, the core EVM aspects are grouped under Earned Value Analysis, encompassing Planned Value (scope, budget, schedule), Actual Cost, and Earned Value. Project variance analysis, forecast calculations, and corrective action analysis are also recognized as critical components of EVM. The next step is understanding the organization maturity level, where this study reveals that EVM partially implemented in the organization and only in selected projects, following the threshold of EVM Maturity Level standards.
The next step involves the formulation of frameworks. The ABCD EVM Framework is developed based on the modified EVM 10-step model, focusing on elements such as Earned Value Analysis and the ANSI/EIA-748 standard as modified EVM components. One impactful aspect, as per the ANSI/EIA-748 Standard, involves determining the Work Breakdown Structure level, influencing the level of detail in schedule planning, budgeting, and progress tracking. Additionally, other variations include frequency of variance calculation and project forecast estimation. Various other aspects such as changes, responsibilities, reporting, and organizational decisions outlined in the discussion chapter are also differ on each project levels.
Moreover, the EVM framework is generated through TOE complexity analysis. Out of the 47 TOE Elements, 29 elements are being identified as influencing elements for the implementation of Earned Value Management. By adhering to the scalability factor from the ANSI/EIA-748 Standard and considering interview outcomes, several suggestions are formulated for Earned Value Management activities. The objective is to anticipate the high-scoring TOE elements for each project. The EVM aspects influencing this framework mainly concern the Project Measurement Baseline Plan, Budget and Schedule Authorization, the level of detail in the Work Breakdown Structure, and the recording of allocation and management reports.
Conclusively, variation in the adaptability of Earned Value Management are shown in the resulted frameworks for variety of project levels, as well as becoming tools to improve the organization maturity level. For practical application, this study recommends organization to implement EVM using the ABCD project classification or similar project sizing measurement approach while integrating insights from the TOE EVM Framework. This holistic strategy can enhance project monitoring and control across various complexity levels, contributing to the successful and effective outcomes of projects in the construction industry.