Earned Value Management (EVM) is very common on construction progress measurement. However, does it give accurate information about the progress? Let us see the following example of measuring the progress using the EVM:
In the above picture we have a project with value of 9,772,453, the earned value so far according to the progress is 6,678 which represents 0.07 %
Now, if we changed the measuring reference from money to working hours, does it make difference? See the photo below where we replaced the rate (money) with productivity rate (working hours per unit) and accordingly the amount was replaced by hours.
In the above picture we have a project with budget hours 120,000 the earned hours so far according to the progress is 127 which represents 0.11 %
Although, it is the same project with same progress but the planned % and actual % would vary depend on the benchmark or the technique you are using to measure the progress (EVM or HRS).
Here is another sample of construction project update with the two criteria mentioned above showing different planned% and actual%
Which measurement criteria is correct?
In my opinion, you should use both in your reporting. Following is a table showing the advantages and disadvantages of each progress measurement technique:
|Earned Value Management (EVM)||· Easy to implement.
· Well understood by the clients.
· Project Budget Cost is known in the contract so no disputes about the benchmark.
· Can be verified by comparing Earned Value to Payment Certificate Value.
|· Could result misleading results if the project cost is upfronted (contractor add more money in the activities which will start early to maintain cashflow).
· Could result misleading results if there is an activity with very high value comparing to other activities.
|Man Hours (HRS)||· Gives accurate information about the project status based on the required working hours and earned hours.
· Same data could be used to manage resources in the construction site.
· Help the cost control department to monitor the project cost performance.
|· Requires accurate estimation of manpower required hours for each activity.
· Since total hours are estimated by the contractor based on company productivity rates, client could argue about the productivity rates/total working hours.
What you cannot measure you cannot manage. Therefore, finding the proper progress measurement technique should be the first step in any construction project management. However, having EVM alone as a progress measurement system would return misleading values. Therefore, I would recommend using both EVM and Man Hours as progress measurement and reporting systems. If you need to learn more about developing schedules, measuring progress with both techniques using smart and fast tools, I would recommend for you the Professional Planning Engineer (PPE) workshop.