Earned value management (EVM) is perhaps the most effective way to approach construction management from a more holistic point of view. In terms of construction, adopting a “holistic” perspective is about seeing the big picture and how everything is working together as an integrated whole.
It’s also about the project’s overall health, with accurate EVM metrics serving as the “vitals” that indicate how well things are going. Far from being simply performance metrics, they become a foundation upon which to better understand and act on what the numbers show — in ways that are not so easily measured. These would be the holistic benefits of EVM that round out that “big picture” view of a given capital project.
Provides real-time project visibility
Software with cloud-based EVM dashboards continuously gather and process the immense amount of data that capital projects produce, providing real-time access and insight into project performance in an easy-to-understand graphic format. This visibility is one of EVM’s key strengths. It’s precisely this view into what’s happening with your project throughout its life cycle, whether it’s a single moment in time or a trend as it’s evolving. That makes it possible to not only forecast the cost and schedule impact of a sudden or gradually developing issue, but to course-correct before it worsens.
The advantage of this visibility doesn’t stop there. It’s also critical to realizing some of the following other benefits.
Promotes accountability and empowerment
EVM metrics are an objective reflection for all to see of where things stand with a capital project. One thing to remember, though, is that the metrics can show that something is overperforming, underperforming or in need of attention. But they don’t show what or why exactly that is. It’s a sign to dig deeper, to find the explanation or context to the story behind the numbers.
This is where accountability surfaces, which in turn inspires analysis and therefore action. As an issue arises and is reflected in the EVM metrics, project managers or other team members can become empowered to identify the internal or external factors at work and then address it more quickly.
So for example, you might find that lagging productivity is due to a shortage of skilled labor or even several site crew members not properly clocking in and out. Or that costs being ahead of where they were anticipated to be at a certain point are the result of sudden material price hikes. Or the schedule that is starting to fall behind is because of an unexpected supply chain delay in equipment delivery.
This early issue detection means prompt source discovery, response and resolution — whether it’s implementing a contingency plan or huddling up with other project team members to arrive at an appropriate course of action.
Invites collaborative decision making
What you don’t know can hurt the project. Unfortunately, lack of access to project information or experiencing gaps in project details too often hinders effective planning and timely decision making that are critical to keep the project on track. Dashboard visibility into EVM performance metrics overcomes these limitations, making it possible for teams and stakeholders to come together, to collaborate holistically on decisions and next steps as they’re all accessing and referencing the same data.
So when EVM metrics are surfacing concerns, then what? As any cost performance index (CPI) or schedule performance index (SPI) values fluctuate out of their operating range, alerts will appear in the dashboards. Because the data doesn’t tell how a problem should be solved, it represents an invitation for discussion among multiple disciplines who bring their unique knowledge and expertise to the table for a more well-rounded and well-considered approach to risk mitigation. Further, the objectivity delivered by EVM removes the potential for optimism bias or guesswork among the group that can prove detrimental to project outcomes.
Fosters confidence in planning while delivering project certainty
Whatever your EVM data is showing via the dashboards — whether it’s encouraging or raising red flags — you still gain the certainty of knowing where your project health and performance stand. Nothing is based on guesswork or on inaccurate, missing or incomplete information. That’s a valuable place to operate from because you gain the confidence in knowing when and where to divert attention as well as what resources to involve.
Confidence and certainty tend to go hand in hand. And together, they give you more control throughout the entire project life cycle. When there’s certainty around what the performance metrics are showing, in particular its CPI and SPI metrics, you not only can decisively plan but risk-adjust and course-correct along the way so you’re better able to stay within budget and schedule estimates.
So how do you make EVM work for you to gain these holistic benefits? InEight connected analytics is one way to help you realize these benefits that give you deep insights into and control over your capital projects’ performance. Let us show you how it can make a difference in how you manage your projects across your entire portfolio.
