Products & Solutions
October 20, 2023

Maximize Efficiency With Earned Value Management Systems

Earned Value Management (EVM) has emerged as a fundamental management tool to help construction executives and field teams monitor project progress, forecast performance, and make data-driven decisions.

In this comprehensive article, we will explore Earned Value Management Systems (EVMS) in the construction industry. We’ll cover what EVM is and some of its key components and benefits. Then, we’ll take a closer look at the technology available to help ensure construction project managers are utilizing their EVMS to the fullest of its capabilities.

Understanding Earned Value Management (EVM)

Earned Value Management is a project management technique that combines scope, schedule, and cost measures to assess project performance and predict its future outcomes. As the Project Management Institute (PMI) describes, EVM “is an ‘early warning’ Project Management tool that enables managers to identify and control problems before they become irrecoverable.”

EVM tracks a project's progress by quantifying the value of work completed (Earned Value). It compares the planned value (Planned Value, or PV) to the actual cost incurred (Actual Cost, or AC).

By comparing these metrics, EVM provides a comprehensive view of a project's performance, allowing project managers to assess whether it's progressing on time and within budget. Moreover, EVM's derived indices, such as the Cost Performance Index (CPI) and Schedule Performance Index (SPI), offer quantifiable insights into cost and schedule efficiency, aiding project teams in making data-driven decisions and taking corrective actions as needed.

How to Implement an Earned Value Management System

Before construction begins on site, the construction team should craft the project plan, which includes the schedule and budget. Dollar amounts should be assigned to deliverables and activities — this is known as the Budgeted Cost for Work Scheduled (BCWS). The critical path, with clear milestones, should be defined.

By establishing these measurables before work begins, a project baseline is established. From a cost perspective, the financial baseline for the project is known as the Budget at Completion (BAC).

Once the project work begins, executives can conduct an earned value analysis, which allows them to track the project baseline relative to performance on site. The following is an overview of the information that project teams can obtain via their EVMS:

By actual versus budgeted metrics, stakeholders can adjust both cost and the project schedule based on the amount of work remaining.

The Benefits of EVM in Construction

Earned value management system: back view of an engineer wearing a hard hat

Implementing an EVM system in construction offers several significant advantages from both a schedule and cost management perspective. Let’s take a closer look at the benefits associated with implementing an EVMS.

Enhanced Project Visibility

EVM provides a clear, quantifiable picture of a project's performance. Executives and field teams can quickly assess whether the project is meeting its objectives in terms of cost and schedule, allowing for timely intervention if necessary.

Early Issue Identification

By analyzing CPI and SPI, construction professionals can identify cost and schedule deviations early in the project lifecycle. This early warning system allows for proactive problem-solving, minimizing the risk of delays and cost overruns.

Informed Decision-Making

EVM equips decision-makers with valuable insights. They can allocate resources efficiently, make informed trade-offs, and optimize project strategies based on real-time data.

Accountability and Benchmarking

EVM provides a basis for evaluating the performance of contractors, subcontractors, and team members. The EVMS methodology allows teams to set performance benchmarks and hold stakeholders accountable for their contributions to the project.

Avvir's Innovative Offerings

While EVM is a powerful tool for construction project management, its effectiveness can be further enhanced by integrating advanced technologies. Avvir, a leader in construction technology, offers cutting-edge 5D offerings that take EVM and construction analytics to the next level.

In construction management, 5D refers to the integration of three-dimensional (3D) models, schedule (4D), and cost (5D) information. Avvir's 5D offerings leverage this integration to provide a comprehensive view of construction projects, enhancing decision-making and project control.

Avvir's 5D features and benefits include:

Combining EVM and Avvir's 5D Offerings

The synergy between Earned Value Management Systems and Avvir's 5D offerings creates a dynamic framework for construction project management. By integrating these two powerful tools, construction professionals can achieve total project control, visibility, and efficiency. Here are the ways in which EVM and Avvir's 5D solutions work together:

Improve Your Project With Earned Value Management Systems

Earned value management system: engineer looking at documents

An Earned Value Management System is a valuable tool for construction teams, offering insights into cost and schedule performance. When integrated with Avvir's innovative offerings, EVM becomes a dynamic and powerful tool that provides unprecedented control and visibility into construction projects.

Avvir's offerings, with accurate as-built data, real-time progress tracking, cost and schedule integration, change management capabilities, and data-driven decision support, enhance the EVM process, making it more responsive to the dynamic nature of construction projects.

By combining EVM and Avvir's 5D offerings, construction executives and field teams can tackle challenges head-on, increasing the likelihood of the successful and efficient completion of complex construction projects. Request a demo to learn more about how Earned Value Management Systems and Avvir can revolutionize your next construction project.

To learn more about Avvir's offerings check out one of our latest blogs on automating as-built models.

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