The Application of Earned Value Management (EVM) in Project Management

Summary
Title: The Application of Earned Value Management in Project Management
Organization: ASTAD Project Management (Doha Qatar) >> a 50-50 JV of Qatar Petroleum and Qatar Foundation. Its the only governmental Project Management Company in Qatar. 90% of the clients are governmental. All governmental projects are financed by Qatars Ministry of Finance.
Payment Process: Contractors/ Consultants submit their invoice to ASTAD. ASTAD reviews and certifies their invoices and sends the payment recommendation for Contractors and Consultants invoices to the client for their approval. Client approves and then sends all the invoices to Qatar Ministry of Finance. Ministry of Finance will pay the invoices before due date.
Pls visit www.astad.qa for more information.
Myself: An employee of Astad Project Managements Cost & Budget Controls Department

Introduction:

1. What is Project Management?; Defining the Problem: i.e. Triple Constraint Triangle/Project Management Triangle of Project Management Cost, Scope, Time (triple constraints). Quality as central theme of the triangle. Cost/Budget constraint is what needs to be addressed (due to Ministrys budget cuts).
2. Current Scenario (Budget Cuts by Qatars Ministry of Finance due to oil price downturn) – Looking at the year-end variance reports for the last 5 years, ASTAD has always been under budget. Since the start of 2016, the Ministry of Finance has been very stringent in approving the yearly capital budget due to the current oil price downturn and also due to under budget utilization of ASTAD during the last five years. This led ASTAD to request for additional budget during the year. Currently ASTAD is facing a serious budget constraint issue which is why it had to implement EVM in project management.
3. Why Earned Value Management- how does it help especially during financial crisis (budget cuts)
4. Why Astad?
5. Research Purpose & Objectives:
What is EVM and is it really worth the effort?
How does EVM answer basic project management questions?
Whats the employees take on EVM?
Has EVM really helped the management in the decision making process?
Is EVM the right project management tool which is to be used during a crisis situation?
6. Limitations: The purpose and limitations together defines the scope of this thesis where boundaries of the analysis can be set. This thesis does not fully assess all the changes and its impact on one or more constraints in the triple constraint triangle. It is limited to cost constraints i.e. budget cuts, and how the project manager will balance each constraint to reach at a favorable conclusion in such a scenario. Also, this research does not consider quality which is treated as the central theme of the triple constraint triangle. The reason being, the Earned Value Management does not have any metric to measure the quality of work done. Lastly, primary and secondary data collected for the purpose of this research is with-in ASTAD only.

Literature Review:

1. Definitions of key elements of Earned Value Management Actual Cost, Planned Cost, Earned Value; EVM metrics (performance measures: variance & index) definitions along with their formulas
2. EVM process/steps
3. How EVM Answers Basic Project Management Questions
4. Advantage/Disadvantages of EVM
5. Less known facts about EVM

Research Methods:

EVM is based on objectivism. Decisions to be taken will be subjective.
Qualitative (unstructured interviews, case study) & Quantitative (questionnaires)

1. Case study of ASTAD how ASTAD manages its projects?
2. Unstructured interviews the unstructured face to face interviews of three of the potential respondents employed at senior levels i.e. Director of Commercial Division Mr. Zane Haseman, Project Reporting Manager Mr. Goddony Normil and Project Controls Reporting Coordinator Mr. Hymanshu Vyas, in ASTAD were undertaken. Though the number of respondents was limited, it wasnt a big concern as they were part of top level management and had all required information the interviewer was looking for.

3. Questionnaire sample questionnaire (as per below) I made. You can change if required.

8000/14000 words done till here.

Questionnaire Sample:
Topic: How will the application of Earned Value Management (EVM) help to facilitate decision making for Project Management Professionals (Project Controls Managers, Project Managers, Senior Management etc.)?
Please tick ? the answer of your choice
Q1. How widely is EVM used to manage projects with-in your organization?
Not used
Used for large and critical projects
Used only for pilot projects
Used as an organization-wide standard for effective project management/controls
Q2. What was the primary motivation for your organization to use EVM?
Government mandate
Client requirement
Voluntary use for better project controls
All of the above
Q3. How long EVM has been implemented in your company?
More than 5 years
2-5 Years
1-2 years
Less than a year
Q4. How often do you evaluate project performance?
Monthly
Weekly
Quarterly
When-ever required
Q5. How well are you familiar with EVM metrics?
Very Well
Well
Average
Poor
Q6. Do you agree EVM metrics are reliable?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Q7. Do you agree the implementation of EVM will help in completing the projects within the allocated approved budget?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Q8. Do you agree the implementation of EVM will help in completing the projects with-in the target schedule completion date?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Q9. Do you agree EVM will help in identifying problems and risk associated with the project at an early stage?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Q10. Do you agree EVMs benefits outweigh its cost i.e. time and energy?
Strongly Agree
Agree
Neutral
Disagree
Strongly Disagree
Q11. In your opinion, is EVM the most effective project management?
Yes
No
4. Most of the time

REQUIREMENT FROM THE WRITER:

Analysis & Key Findings/Discussion: 4500 words to be done from your side.

Case study Analysis any issues with how ASTAD is managing its projects?

Unstructured Interview Analysis
– What info did you get from the interview regarding the application of EVM?
– How did it help you with your research?
– Key findings such as Though EVM is objective, decisions to be taken will be subjective.
– EVM cannot be blamed as their metrics show accurate results if the data used are accurate.
– Discussion about delays in getting the change requests approved by the clients etc. etc.
– Risk management.
– Quality is not measured in EVM. EVM is a very good tool to be used to measure project progress. It should be used in conjunction with other project management tools.

Questionnaire Analysis as per my questionnaire.

Key Findings & Discussions of the above.

Conclusion & Recommendation I will do it once you complete Analysis & Key Findings/Discussion.