W14_LUCKY_IS THE EVM USEFUL ON SMALL PROJECTS

W14_LUCKY_IS THE EVM USEFUL ON SMALL PROJECTS

1. Problem Recognition, Definition, Root Cause Analysis and Evaluation

 

1. Problem Recognition

Determining the earned value or budgeted cost of work performed has been said to be one of most challenging areas of the earned value management (EVM) system. Bad news get better with time and the earlier a problem is identified the better the chance of resolving it[i].

2. Problem Definition

Considering the efforts required to establish an EVM, would be expedient to apply the methodology on small value projects?   

3. Root Cause Analysis and Evaluation

Determining an appropriate earned value measurement method or technique for small projects would be laborious considering the time and effort when compared to establishing an EVM for big projects. This could be due to a lack of proper understanding of the application of the various earned value techniques.

2. Development of Feasible Alternatives

The feasible alternatives are as follows:

·         Case against the use of EVM on small projects

·         Case for the use of EVM on small projects.

3. Development of outcomes  for each alternative

The outcomes for each alternative are presented below:

• Case against the use of EVM small projects
• Development and implementation of  EV systems are expensive and time consuming
• EV is costly and complex
• Adds another overhead cost to the project

 

• Case for the use of EVM on small project
• EVM is an essential part of project management
• The cost is in the planning, budgeting and scheduling, and not EV – little marginal cost
• Cost of EVM range from 1.9% of the project for established systems to 5.2% for new systems – little marginal cost

 

4. Selection Criteria

 

The selection criteria are as follows: 

·         Good business sense

·         Provide complete picture of the health of a project[ii](Predominant criterion)

·         Good management system

·         Time

5. Analysis and Comparison of the alternatives

The analysis and comparison of the alternatives with respect to the projects is presented below:

 

S/N	Attribute	For the Use EVM on small projects	Against use of EVM on small projects
1	Good business sense	Excellent	Poor
2	Complete picture of health of the project	Excellent	Poor
3	Good management system	Good	Fair
4	Time	Good	Fair

 

Table 1: Analysis of the use of EVM [By Author]

 

 

6. Selection of preferred alternative

Using the Lexicography[iii] non-compensatory model of multi attribute decision making, the EVM use on small project is examined to identify the usefulness.

S/N	Attribute	Rank	For the Use EVM on small projects	Against use of EVM on small projects
1	Complete picture of the health of project	4	Use on small project> Against use on small project	Against use on small project < use on small project

 

Table 6: Application of Lexicography [By Author]

 

Use of EVM on small projects – The only tool that will provide the true and complete picture of the health of a project in terms of both time and cost.

7. Performance monitoring and post evaluation of results

Marginal costs that would be incurred establishing and maintaining an earned value reporting system include training on project management process and earned value, process development and system tools.

I do not need to manage a $100M project to enjoy some of the benefits that comes from utilizing the EVM nor do I need to have a full fledge EVMS  to make use of the methodology as demonstrated in our current training.

 The application of EVM can deliver benefits even on small-scale projects and the cost of establishing this process does not require unreasonable effort to put in place but varies according to common sense[iv]. EVM is about showing value for money regardless of project size, type or location - certainly in Nigeria to help us reduce corruption in project execution.

Reference

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[i] Fleming, Q. & Koppelman, J. (2002). Mitigating the risks associated with construction projects. Retrieved from http://www.dau.mil/pubscats/PubsCats/PM/articles02/fle-ma2.pdf

 

[ii] Giammalvo, P. (2012, October 22). Integrated portfolio (asset), program (operations) and project management methodology course (cost engineering) slides 7, 8 & 59 day 5 (An AACE methodology course). Lagos, Nigeria: Lonadek

 

[iii] Sullivan, W., Wicks, E., Koelling, P., Kumar, p., & Kumar, N. (2012).Chapter 14 Decision making considering multiattributes (p. 578). Engineering economy (15^th edition). England: Pearson Education Limited.

 

 

[iv] Humphreys, G. (2002). Chapter 1 Project management using earned value (pp. 10 -12). Project management using earned value (1st edition). Orange CA.: Humphreys & Associates, Inc.