Technical Program Abstracts

(EVM) Earned Value Management


(EVM-3058) Developing and Implementing Earned Value Analysis Over Engineering Services on a Refinery CAPEX Portfolio

Author(s)/Presenter(s): Patrick Kelly

Abstract:

In the 21st century, the downstream oil and gas industry has been impeded by poorly planned and delivered engineering services, experiencing high rework coupled with poor owner oversight of engineering delivery. Front End Engineering and Design (FEED) costs have increased, schedule delays have soared, and quality has decreased, with little understanding of the drivers and resulting impact on construction readiness. As the price of oil has fallen, owners have shifted focus to reducing business support for project controls staffing, often resulting in a lack of visibility into engineering progress and the resultant impact to construction schedules and delivery methodologies. Projects now suffer from a lack of application of the basic premises and practices as defined by AACE International’s Recommended Practices and Total Cost Management (TCM) Framework.

Implementing earned value management and analysis across a large‐scale CAPEX portfolio faces challenges in garnering the required business support to implement fit for purpose solutions. Fear of the unknown, coupled with high expectations for project delivery often leaves owners unable or unwilling to change project delivery processes and tools. Through the implementation of owner‐managed earned value analysis in the FEED process, projects experience greater transparency from engineering service providers, often resulting in reduced cost, reduced schedule slippage, and better preparedness for construction. As data is accumulated, owners are better prepared to predict engineering costs, manage and select engineering vendors, and identify areas for continuous improvement. This paper will use a recent portfolio example to describe how one owner improved the as‐is organizational state to current capability through implementation of a right‐sized Earned Value Management system.

(EVM-3096) The Research on Integrated Analysis of EVM and BIM

Author(s)/Presenter(s): Dandan Li; Xuejiao Liu; Chunfu Xu

Abstract:

At any stage of the project, a clear prediction of completion cost is a prerequisite for effective cost control. The degree of Earned Value Management determines whether the cost estimation based on Earned Value Method is feasible and effective. The paper studies how to combine Building Information Modeling technology to achieve cost prediction by applying Earned Value Method. It focuses on how to establish the budget curve based on BIM technology, and studies the benefits of EVM and BIM integration to earned value management. Comparing three methods of cost estimation based on EVM, the applicability of each method is analyzed. Finally, an example is given to illustrate how the prediction method is applied in practical engineering. The introduction of BIM technology makes the cost prediction improve accuracy and timeliness.

(EVM-3102) Effective Strategy and Practices for Change Management: Don’t  Bankrupt the Customer

Author(s)/Presenter(s): James D. Vervilos, CCP EVP PSP

Abstract:

Projects don’t fail at the end, they fail at the start, further failure is possible throughout the project life cycle. This paper focuses on the ins and outs of the TCM change process - change identification, baseline maintenance, and iterative interrelationships with risk management and forecasting. Every manager needs timely relevant actionable information to make informed decisions for successful project execution. Make success  happen and help management to understand and control the projects future with timely, relevant realistic baselines and status.  Get credit for all the work performed. Change is inevitable, omissions are likely, change, deviations, trends, are identified, managed and controlled to preserve baseline integrity. Incremental scope creep, if not controlled, has a cumulative influence on cost and schedule performance.  Well prepared baselines and control strategies can reduce uncertainty, creep, omissions, productivity and performance issues.   Having an effective change strategy, practices, procedures, and communication across the team is crucial, to keep the team focused, and resist changes bringing order to chaos. Change adds up. Scope and performance evolve daily, requires diligence, definition, assessment, adjustment and is a vital part of management. Controlling change maintains focus on the What, Where, Directions, Timing, Risks, Cost and Quality involved.

(EVM-3155) Use of Earned Value Management as a Communication Tool With the Project Team and the Client

Author(s)/Presenter(s): Edward M. McNamee

Abstract:

Many times people focus on the rigorous implantation of Earned Value Management (EVM) without receiving the value the system offers as a communication tool with the project team and the client.  Implementation of an appropriate EVM system can lead to:

•  A clear understanding of the project requirements

•  A well-thought-out execution strategy by the project team

•  Feedback between the Project Manager and the project team on issues and progress

•  A system for tracking and resolving management actions to move the project forward.

•  Objective measurement of performance that can be used to communicate progress and issues with the client.

Taking a fresh look at the EVM guidelines from a communication perspective can enhance the return on investment for using EVM and improve project performance and relationships.

(EVM-3161) EVM Application: Quantifying Value in Various Industries and Project Phases

Author(s)/Presenter(s): Pranab Kumar Deb, P.Eng. PSP; Jatin Jajal, CCP CEP EVP

Abstract:

Quantifying value in projects is a tricky issue; more so in various project types, different project locations and project phases. There is an opportunity at the outset of the project to choose the best possible way of quantifying value, so that it is easy, manageable and fit for purpose (forecast’s rightly about the project). This paper sets out to provide valuable input to the project management and controls staff to make this decision based on available resources, the stage where the project at that point in time, how progress is going to be measured and data available. Feedback was obtained in the form of a survey from the industry practitioners on best practices for quantifying progress values /percentages in various industries and project phases. It provides the most widely accepted methodology for quantifying value using both hours/costs including indirect.

(EVM-3165) Unpacking Earned Value Management for Oil and Gas Projects

Author(s)/Presenter(s): Anton W. van der Steege, CCP

Abstract:

Earned Value Management (EVM) is seen as a sound management approach to bring visibility to cost and schedule problems. However, in the oil and gas industry, specifically on large and mega projects, EVM has not been used extensively.  EVM, as a methodology, has several pitfalls that need to be considered when attempting its application in project controls. This is not an indictment of either the current practices in the oil and gas industry or on EVM, as both are indeed attending to similar challenges on projects. The ultimate approach should aim to achieve an optimum cost-benefit ratio.  It is also necessary to unpack the true meaning of the key performance factors on a project to be able to draw valid conclusions in establishing which work processes contribute the most to predictability and profitability of the outcome of a project. This paper aims to share observations and experiences in this regard.

(EVM-3210) Integrating Quality into Earned Value Management

Author(s)/Presenter(s): Reem Ahmed; Mohamed Afifi

Abstract:

The Earned Value Management (EVM) is the most commonly used system in construction projects all over the world to integrate both time and cost controls of a project. However, numerous researchers have identified gaps and limitations to using this method. The most agreed-upon limitation in using the EVM, is that it does not incorporate the quality aspect of a project, although it is one of the main drivers of success in any project. As a result, this study was conducted as a contribution to efforts in this field with the aim of identifying a proper way to integrate quality, time and cost using the EVM. A framework was developed to assess the quality of a project by the means of proposed equations and formulae that hopefully will aid project managers and responsible parties in a project in having a broader vision of the project's performance in terms of time, cost and quality. Furthermore, a case study from an actual construction project was analysed to verify and validate the framework, and the results were in favour of using the framework rather than the conventional EVM calculations.

(EVM-3212) Effectiveness of the Earned Schedule vs the Earned Value

Author(s)/Presenter(s): Keight Charles Navarro Hurtado

Abstract:

The Earned value method (EVM) is a method that allows you to measure the amount of work actually made in a project. The purpose of this paper is to know about the technique of the Earned Schedule (ES) as a tool additional to manage the schedule in construction projects, see its effectiveness compared with the EVM and determine the amount of delay when the project does not finish at the planned date. The results on a real case have showed difference between both, when the project has finished the SV=0 of the EVM this represents the EV=PV=BAC and the SV(t) of the (ES) represents a negative value it indicates the amount of delay in the project meanwhile when the project has also finished the SPI=1 it indicates that the EV=PV=BAC and the SPI(t) of the (ES) can have different values from 1, this represents the rate of progress per period towards the completion. Another difference is the SPI trend towards 1, which starts at 2/3 of the progress. The calculations made of the ES(t) on the SV and SPI are more reliable than the EVM and its effectiveness of the ES(t) is observed in the projects with late completion.

(EVM-3251) How to Calculate Estimate at Completion at a Project Level

Author(s)/Presenter(s): Mostafa AbdelRazik, PSP

Abstract:

This paper discusses two different methods of calculating Estimate at completion adopted by two different software. Seamless reporting of EAC is essential. Differences between software on how Estimate at Completion (EAC) is calculated at a project level can confuse and mislead project management professionals, especially if these differences result in tremendous project performance indicator variances from one software to another.

This paper compares between two methods of two scheduling software used to calculate EAC at a project level:

1) Adding up EAC for all control accounts on a project, at their appropriate levels to generate the EAC of the project.

2) Adding up Actual costs and Earned Value for all control accounts on a project at their appropriate levels, calculating the project’s Cost Performance Index (CPI), and using this CPI to calculate EAC.

The paper also discusses different examples that will magnify the issue discussed. This paper also outlines the accuracy of method 1 above, compared to method 2. The goal of this paper is to be the first step of gaining consensus on how EAC is calculated at a project level.

(EVM-3263) Application of Earned Schedule—A Highway Case Study

Author(s)/Presenter(s): Dr. Sevcan Agdas; Ajay Raman

Abstract:

The Earned Schedule (ES), an extension to the Earned Value Management System (EVMS),provides a better outlook by transforming the schedule performance metrics to be expressed in terms of time. This is a clear benefit over the traditional EVMS approach to schedule management as shortcomings of cost based  schedule management is well-documented. This case study focuses on a portion of the construction of a multi lane tolled highway section to highlight benefits of ES method. It uses ES performance metrics in order to calculate the impact of a major weather event and compares the results with the “as built” schedule information. The time associated with the suspended work and the time spent for re-work was inserted into the schedule before this analysis was carried out. The comparison is also extended to the schedule metrics calculated using the EVMS to further support the relevance of ES.

(EVM-3265) Earned Value Challenges in Projects where the Project Currency Differs from the Functional Currency

Author(s)/Presenter(s): Petronella Anna Cronje, CCP

Abstract:

This paper investigates the challenges faced by companies that execute projects in currencies different than those of their functional currencies.

Projects on the African continent are often performed in US Dollars. However, the companies executing these projects typically do not operate in countries where the functional currency is US Dollars. In addition, these countries often have volatile currencies. This presents various challenges when performing Earned Value evaluations, which are typically not considered in traditional scenarios where the functional and project currencies are the same. As such, there is limited research available that is based on practical examples.

To investigate these challenges, a case study project was examined. The project was based in Kenya and was performed both in US Dollars and Kenya Shillings. The company that executed the project was based in South Africa and, as such, had a functional currency of South African Rand. The case study evaluated the effect that the exchange rates of the various currencies had on the Earned Value of the project.

This paper proposes a practical solution to the challenges associated with volatile exchange rates by presenting strategies that can be implemented to mitigate the effects on the Earned Value of such projects.

(EVM-3268) Some Solutions to the Performance Assessment Conundrum: Improving Precision of Subjective

Author(s)/Presenter(s): James D. Vervilos, CCP EVP PSP

Abstract:

This paper proposes a gated planning strategy approach for controlling differing opinions during activity performance assessment presenting ideas and concepts to reign in on the questionable results obtained with percent complete and LOE.  Apportioning or apportioning like methods are often more applicable to activities than the commonly skewing LOE approach.  The author further proposes a defined gated apportioning method for iterative release type scope such as design activities. The better one can frame the scope with the performance measurement criteria, with the flow of work during planning, the more improved assessment results for management decision making.  The focus is on considering apportionment over LOE, and gated approaches over straight subjective percent complete where applicable. The goal here is to break down tasks to better report performance against plan for better results. These ideas are flexible and adaptable to any applicable situation, stage values can be refined over time allowing management ‘to better dial into’ the truth of performance assessment.  Having a performance assessment plan can reduce clutter in a schedule. The step wise approach and use of apportioning strategies align the measured performance more accurately to the work scope.

(EVM-3271) Emergent Extensions of the Earned Value Method for Construction Schedule Performance Measurement and Control

Author(s)/Presenter(s): Dr. Mohamed-Asem Abdul-Malak; Farah S. Demachkieh

Abstract:

The earned value method (EVM) remains as the most recognized project performance measurement and control technique. An extensive number of improvements dealing with ways and means that can improve the representation, usage, and measurements of the basic EVM sets of performance measures have been proposed in the last two decades. That said, the objective of the work presented in this paper is to investigate and propose a framework that can systematically guide in promoting the applicability of the improvements proposed to the EVM’s set of schedule performance measures. The proposed framework aims at making this control tool better accustomed and suited for exercising construction schedule control. In that respect, it accounts for several emergent approaches that proposed variant metrics, such as the schedule forecast indicator, to-complete schedule compression ratio, and to-complete schedule performance. Furthermore, it incorporates other proposed methods that are EMV compatible, including: the earned schedule, earned duration, weight earned value, and average work rate-based earned time methods. The main research contribution is the development of a novel, integrated set of schedule performance measures, which can ultimately better serve the critical task of forecasting and updating the expected-at-completion figure for the duration of a construction project on hand.

(EVM-3272) Comparative Analyses of Construction Cash Flow Predictions Using Empirical S-Curves

Author(s)/Presenter(s): Dr. Mohamed-Asem Abdul-Malak; Farah S. Demachkieh

Abstract:

The S-curve is a widespread tool used for depicting the project cumulative progress during execution. Numerous research studies have been found to tackle the forecasting of the project-level cash flow in the preconstruction stages, using prediction techniques involving neural network and regression analyses as well as third-degree polynomial and sigmoid functions. The encountered models rely on an array of input variables, including the type of work and location, degree of project simplicity, team competence, curve slope and inflection point, and specific time-money milestones, among others. The objective of the research work presented in this paper is concerned with the investigation of the applicability and prediction accuracy of the proposed planned progress estimation models from the perspectives of both owners and contractors. In this regard, actual data related to the expenditures incurred and payments made on a completed residential project was used to forecast the owner’s and contractor’s empirical S-curves using the existing proposed models. The performed comparative and sensitivity analyses allowed the determination of those ranges of the input factors that satisfy an acceptable degree of prediction accuracy. The findings also revealed a varying degree of suitability for the tested models based on the actual data that was used.

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