Applicability of earned value management as a performance measurement tool for Sri Lankan construction industry

Abstract

This study is based on the Earned Value Management (EVM) performance measurement technique and its practice in Sri Lankan construction industry. Since the project success clearly depend on accuracy on evaluated performance measurement, EVM have emerged through various techniques, due to its higher degree of reliability, effectiveness, accuracy, and efficiency. Data collection was done through the case study research approach and cross case analysis was used for data analysis. Four cases were selected to extract the current practice of EVM and its suitability as a performance measurement for the industry. In traditional methods, physical progress is not taken into account when analysing cost performance. Instead, actual cost of a project up to date is simply compared to planned costs, often with misleading results. Therefore, as a mitigating measure, EVM can be applied for measuring a project's performance forecasting future trends and analysing variances in the schedule and budget as the project proceeds. EVM as a standard method can be considered more successful with better results in projects simple and direct with a detailed scope. As evidenced in the case study, projects with complex and incomplete final products show higher deviations in the use of the technique. The EVM suggests a cultural change in the process of projects control; therefore people who have experience in dealing with the tool are really necessary in this process. The way an organisation implements the tool, influences directly to the results. If it had an organisational support, provided by specialised resources, will have better results in terms of application.