Noel MakagutuArchitect & PM| Self employedNairobi, Kenya
What information do you, as a construction professional, collect from your projects?
Do you find earned value management useful? For example, you have certified say $30mn. But the progress is much lower. Does this have an effect on the schedule? Saving Changes...
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Noel, I believe by collect, you mean track. EVM is definitely big on construction projects - Calculating your earned value will give you insights into your schedule and cost variances, and performance indexes. However, it won't tell you if you are delivering value within the progress you've already achieved so you need to find another metric that is unique to your project so you can measure value against besides EVM.
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1 reply by Noel Makagutu
Jan 31, 2024 1:01 AM
Noel Makagutu
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Hey Rami, for example, I look at the amount of work certified against the project schedule and it shows we have paid 30% but according to the schedule, only 15-20% of work has been done. So I tell the project sponsor the project is underperforming, which it is. But what other metrics would you take to present to the sponsor?
Saving Changes...
Noel MakagutuArchitect & PM| Self employedNairobi, Kenya
Jan 30, 2024 5:49 PM
Replying to Rami Kaibni
...
Noel, I believe by collect, you mean track. EVM is definitely big on construction projects - Calculating your earned value will give you insights into your schedule and cost variances, and performance indexes. However, it won't tell you if you are delivering value within the progress you've already achieved so you need to find another metric that is unique to your project so you can measure value against besides EVM.
Hey Rami, for example, I look at the amount of work certified against the project schedule and it shows we have paid 30% but according to the schedule, only 15-20% of work has been done. So I tell the project sponsor the project is underperforming, which it is. But what other metrics would you take to present to the sponsor?
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1 reply by Rami Kaibni
Jan 31, 2024 2:17 AM
Rami Kaibni
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Based on this info, you can calculate the Schedule Variance and SPI (Schedule Performance Index).
Also calculate the Cost Variance and CPI. Based on CPI, you can calculate the Budget At Completion but be careful, if you’re planning to get the project back on Track, then calculating BAC is different than calculating it if you will keep your spending at current situation.
To calculate the Budget At Completion (BAC) using the Cost Performance Index (CPI), at current situation, you can use the following formula:
BAC = Actual Cost / CPI
- Actual Cost is the total actual cost incurred for the project to date.
- EV (Earned Value) is the value of the work actually performed.
- CPI = EV / AC (Cost Performance Index) is calculated as Earned Value (EV) divided by Actual Cost (AC).
Once you have the CPI, you can use it to calculate the BAC as described above.
You also need to figure our other metrics specific to your project that will reflect value delivered as this can’t be calculated using EVM.
Project Sponsors normally are concerned with high level figures like BAC and ETC.
Senior Projects Manager | Field & Marten AssociatesNew Westminster, British Columbia, Canada
Jan 31, 2024 1:01 AM
Replying to Noel Makagutu
...
Hey Rami, for example, I look at the amount of work certified against the project schedule and it shows we have paid 30% but according to the schedule, only 15-20% of work has been done. So I tell the project sponsor the project is underperforming, which it is. But what other metrics would you take to present to the sponsor?
Based on this info, you can calculate the Schedule Variance and SPI (Schedule Performance Index).
Also calculate the Cost Variance and CPI. Based on CPI, you can calculate the Budget At Completion but be careful, if you’re planning to get the project back on Track, then calculating BAC is different than calculating it if you will keep your spending at current situation.
To calculate the Budget At Completion (BAC) using the Cost Performance Index (CPI), at current situation, you can use the following formula:
BAC = Actual Cost / CPI
- Actual Cost is the total actual cost incurred for the project to date.
- EV (Earned Value) is the value of the work actually performed.
- CPI = EV / AC (Cost Performance Index) is calculated as Earned Value (EV) divided by Actual Cost (AC).
Once you have the CPI, you can use it to calculate the BAC as described above.
You also need to figure our other metrics specific to your project that will reflect value delivered as this can’t be calculated using EVM.
Project Sponsors normally are concerned with high level figures like BAC and ETC.
Hope this helps!
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1 reply by Noel Makagutu
Jan 31, 2024 2:24 AM
Noel Makagutu
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It sure does.
Saving Changes...
Noel MakagutuArchitect & PM| Self employedNairobi, Kenya
Jan 31, 2024 2:17 AM
Replying to Rami Kaibni
...
Based on this info, you can calculate the Schedule Variance and SPI (Schedule Performance Index).
Also calculate the Cost Variance and CPI. Based on CPI, you can calculate the Budget At Completion but be careful, if you’re planning to get the project back on Track, then calculating BAC is different than calculating it if you will keep your spending at current situation.
To calculate the Budget At Completion (BAC) using the Cost Performance Index (CPI), at current situation, you can use the following formula:
BAC = Actual Cost / CPI
- Actual Cost is the total actual cost incurred for the project to date.
- EV (Earned Value) is the value of the work actually performed.
- CPI = EV / AC (Cost Performance Index) is calculated as Earned Value (EV) divided by Actual Cost (AC).
Once you have the CPI, you can use it to calculate the BAC as described above.
You also need to figure our other metrics specific to your project that will reflect value delivered as this can’t be calculated using EVM.
Project Sponsors normally are concerned with high level figures like BAC and ETC.
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