Conditions of success for earned value analysis in projects

Incorporating earned value management into income statements to improve project management profitability and elevate application in the business and management

Our goal is to improve Project Management (PM) profitability and reduce discrepancies in information among stakeholders, which can result in conflicts. This will be accomplished by incorporating Earned Value Management (EVM) with the Income Statement and incorporating earnings before interest, tax, depreciation, and amortization (EBITDA) with the work breakdown structure (WBS). These incorporations will streamline information sharing between PM, other management professionals, and the stakeholders, ultimately fostering the application of PM within broader business and management contexts. We drew on theories from Project, Operations, Financial Management, Agency Theory, and the Theory of Performance Frontiers. We conducted multiple case studies in a shipbuilding corporation with 25 projects and an aircraft manufacturing corporation with 20 projects. Our analysis involved both qualitative and quantitative methods, ensuring the accuracy and practicality of our hypotheses and instilling confidence in our research findings. This integration addresses the information gap on profitability for non-project management professionals, empowering stakeholders to enhance project performance. This integration benefits the company by allowing the project manager and stakeholders to gain real-time insights into the project's profitability, which enables continuous optimization of daily EBITDA by improving efficiency and productivity to achieve the project's profitability target. This study and its innovative findings originate from the author's unique approach, which is a significant contribution to the field of Project Management. This research focused on project management using EVM in for-profit organizations. Integrating EVM in the income statement also facilitates PM application in other management systems.

Novel Quality-Embedded Earned Value Performance Analysis Tool for Sustainable Project Portfolio Production

Although many project portfolio management tools have been developed, little has been found capable of evaluating and managing project quality, cost, and schedule simultaneously. Limited cross-project references also limit lessons learned in the context of triple constraints. This study aims to embed quality check into the earned value management (EVM) method and develop an extended tool for triple constraint management based on EVM. The purpose is to evaluate and manage the triple constraints of a project in one go, incorporating quality management and portfolio management functions into costing and scheduling. The newly developed tools are tested and validated in real-world case studies. It was proven to assist project portfolio stakeholders in triple constraints planning, organizing, monitoring, managing, and reporting using a single reporting format.

Fall Seven Times, Stand Up Eight: Linking Project Management Innovation, Project Governance, and High-Performance Work Practices to Project Success

Project managers seem to be puzzled in resolving the global dilemma of project failures across industries. Hence, the present study introduces project management innovation (PMI) as a determinant of project success (PS) and explores whether project governance (PG) and high-performance work practices (HPWPs), strengthen this relationship. To confirm these propositions, study data using adapted scales were collected from project professionals representing software development companies in the emerging IT industry in Pakistan. Structural equation modeling (SEM) was employed to examine the hypothesized relationships and encourage PMI-guided solutions for project failures. SEM results statistically validated that project success is positively influenced by PMI, whereas this relationship is significantly strengthened through the moderating influence of PG and HPWPs, respectively. Theoretically, the present research is the first of its kind to introduce and empirically examine these untested relationships between PMI, PG, HPWPs, and PS in a single framework. These novel findings hold strategic value for both project managers and organizational leaders who oversee a range of project portfolios. Long-lasting advantages and superior achievements can be reinvigorated through PMI, after departure from traditional approaches and answering calls for new solutions to new problems in managing projects. Moreover, project governance and HPWPs should be reconfigured to oversee, as well as meet the special needs of each unique project.

Earned Value Method (EVM) for Construction Projects: Current Application and Future Projections

The earned value method (EVM) is an internationally known technique for project management that emphasizes the control of project cost performance and duration, thus allowing trends to be identified during execution and warning the project manager of variances that may affect the project so that they can take the necessary corrective measures. In this research, the finished projects of a construction company in the city of Cuenca, Ecuador, were assessed. EVM was applied to projects from a database developed with information from each one to rebuild past events, existing problems, and critical points and evaluate the performance over time. The results of this analysis are meant to determine the project’s success, calculating the cost variance at the end. EVM motivates project stakeholders to pay attention to costs and progress so that timely actions can be taken to optimize resources, resulting in the completion of a project within budget and on time. In conclusion, EVM plays an essential role in the integral management of the project in terms of scope, time, and cost. Moreover, there are now guidelines for applying this method as a control tool in future construction projects.

Application of Hybrid SWARA–BIM in Reducing Reworks of Building Construction Projects from the Perspective of Time

One of the major issues of the construction industry has been the “reworks” that affect the time, quality, and cost of projects. Therefore, reworks and the ineffective use of site resources and materials will always result in significant losses on projects. The development of information technology has led to the widespread use of Building Information Modelling (BIM) to enhance the delivery of more sustainable building construction projects. The purpose of this study is to combine the Step-wise Weight Assessment Ratio Analysis (SWARA) method and BIM technologies to identify and reduce time delays caused by reworks in construction projects. Firstly, 49 rework causes in residential buildings were identified and ranked. Then, BIM was generated and compared to the initial model. It was observed that working hours were reduced by 4.6%. Moreover, using an Earned Value Management (EVM) system, a 0.06 increase in Schedule Performance Index (SPI) factor was illustrated. Results obtained by this study provide an effective step in reducing a project’s time in the construction industry.

Improving the Results of the Earned Value Management Technique Using Artificial Neural Networks in Construction Projects

The cost, time and scope of a construction project are key parameters for its success. Thus, predicting these indices is indispensable. Correct and accurate prediction of cost throughout the progress of a project gives project managers the chance to identify projects that need revision in their schedules in order to result in the maximum benefit. The aim of this study is to minimize the shortcomings of the Earned Value Management (EVM) method using an Artificial Neural Network (ANN) and multiple regression analysis in order to predict project cost indices more precisely. A total of 50 road construction projects in Fars Province, Iran, were selected for analysis in this research. An ANN model was used to predict the projects’ cost performance indices, thereby creating a more accurate symmetry between the predicted and actual cost by considering factors that influence project success. The input data of the ANN model were analysed in MATLAB software. A multiple regression model was also used as another analytical tool to validate the outcome of the ANN. The results showed that the ANN model resulted in a lower Mean Squared Error (MSE) and a greater correlation coefficient than both the traditional EVM model and the multiple regression model.

Product value analysis: a developed cost–benefit analysis ratio based on the Kano and PAF models

Purpose

In this study, an integrative approach of customer satisfaction and cost of quality has been proposed for the value analysis of products based on a cost–benefit ratio.

Design/methodology/approach

For the integrative approach, Kano and prevention-appraisal-failure (PAF) models have been applied. By the proposed approach, the value of products can be analyzed according to customer viewpoints and cost of quality. Four products of a home appliance company have been used to examine the new approach.

Findings

Findings indicate the priorities of the studied products as stove, TV, fridge and washing machine, respectively. Such a set of prioritized products plays a strategic role in the competitive advantage of the studied company.

Research limitations/implications

In this study, the weights of the cost of quality items have been assumed as equal. Also, the costs of quality items were limited to the most important ones at the studied company. However, more cost of quality items might be considered in different case studies.

Originality/value

In this study, the Kano and PAF models have been considered simultaneously for product value analysis from the viewpoint of customers. In addition to the classic method of value analysis which is merely based on previous events, the proposed approach is typically proactive.

Risk-Informed Performance Assessment of Construction Projects

Construction projects are struggling to reach satisfactory performance in a context full of various and many risks. Despite the long-lasting study of performance in construction no universal approaches have emerged from numerous proposals. A mainstream in dealing with this issue is benchmarking methods with the use of appropriate indicators. This research work adopts such a group of indicators that address more aspects than the usual cost, schedule, and quality considerations. Following suggestions for proper adjustments and clarifications for the appropriate use of this group of indicators, this research proceeds by introducing the risk aspect to the calculation of project performance. Identified risks are modeled through fuzzy numbers to deal with data incompleteness and then they are appropriately added to compose risk coefficients for the performance dimensions expressed through the respective indicators. Then, the overall project’s performance is calculated addressing a risk-informed performance assessment of construction projects. The whole process is tested for verification with a theoretical example. The development of a simple yet inclusive and adjustable methodological framework for risk-informed performance assessment is expected to provide practitioners with a relatively easy approach for integrating both the risk and performance management in construction.

An Assessment of Lean Design Management Practices in Construction Projects

Evidence exists for the application of lean management practices in the design process. However, there is no systematic review of this type of practice that links the design management practices to the lean construction principles. There is no tool to assess the level of use of lean design management practices in construction projects either. Therefore, this paper aims to assess the lean management practices that are performed at the design phase of construction projects. The research was divided into a literature review of design management practices; a validation of lean design management practices with a practice–principle relationship, based on an expert survey; the devolvement of a tool (questionnaire) to evaluate the lean design management practices; and an assessment in 64 construction projects (coherence, reliability, correlation, and descriptive analysis). It is concluded that evidence exists for the implementation of 19 lean design management practices. These practices are grouped into three categories: stakeholder management, planning and control, and problem solving and decision making. Additionally, in the assessment of the 64 projects, it can be observed that the lean design management practices are at initial levels of implementations, so there is a significant development gap. This research proposes a tool to assess management practices in the design phase of construction projects; then, the study identifies implementations gaps, it provides benchmarks with other projects, and it improves the design process through a taxonomy of lean design management practices.