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Nov 26 2013

The history of EVM

While the UK construction industry is feverishly devouring every nugget about BIM, another three letter abbreviation could, arguably, make an equally profound difference to the future project management of many schemes. EVM (earned value management) is a well-known approach in the UK civil engineering, infrastructure and oil and gas sectors (it’s deployed by contractors such as Costain, Jacobs and Vinci, for clients including TfL, Connect Plus, Crossrail, and the Highways Agency), but it is not currently used much in the building construction world. So we are on a mission to educate the industry …. First, we will outline the history of EVM; in future articles we will explain how it works and talk about some case studies of EVM in action.

EVM history

Minuteman launch (image from Wikimedia Commons)EVM developed as a factory floor approach in manufacturing in the United States, once concepts of planned standards, earned standards, and actual costs were defined to refine manufacturing processes. During the 1960s, the US government adopted one of the earliest forms of EVM as its methodology for tracking cost and schedule performance in the Minuteman missile program. EVM was so successful in giving the project management team insight into cost and schedule issues and trends that the US government adopted the process for most of its major development programs.

According to Wikipedia, EVM was introduced to the architecture, engineering and construction industry in a 1979 Public Works magazine article by David Burstein, then a project manager with engineering firm Parsons (he is now director of client services for PSMJ Resources, a training and consulting firm specialising in the engineering and architecture industry).

EVM has become part of the body of knowledge within project management (PMBOK), and became more closely integrated wtih project management during the 1990s, and the United States Office of Management and Budget began to mandate the use of EVM across all government agencies, and, for the first time, for certain internally managed projects (not just for contractors). EVM also received greater attention by US publicly traded companies in response to compliance issues raised by the Sarbanes-Oxley Act of 2002.

Today, EVM is recognized by many US and international professional associations such as Project Management Institute (PMI), the Association for the Advancement of Cost Engineering International (AACEI), the National Defense Industrial Association (NDIA), the Program Management Systems Committee (PMSC), the American National Standards Institute (ANSI), and the International Performance Management Council (IPMC), among others. Project professionals can choose to become certified practitioners in EVM raising their value to their employer organisations.

EVM for real estate

We feel there is a great opportunity for consultants, contractors and clients involved in public and private sector building projects to incorporate EVM into their project management practices, and to monitor and forecast project performance more accurately by reusing much of the data captured by their existing change management and financial control systems.

In future articles, we will be explaining the EVM process and describing how it is helped clients predict out-turn costs and programmes with greater confidence (why not sign up to receive email notifications of future blog posts?).

(CONJECT launched its SaaS-based EVM application at the Project Controls Expo earlier this month – see Steve Cooper’s post.)

About the author

Duncan Kneller

Duncan Kneller is director of sales at Conject. He joined the company in 2000 and quickly established himself as a key sales and account manager, before taking on the sales director role in 2011. Duncan has also spearheaded the company's cycling fund-raising events in recent years.

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