Before embarking on a construction project, a project manager typically collaborates closely with team members to meticulously plan the entire project pipeline. This planning phase is crucial for ensuring the smooth execution and streamlining of all project deliverables.
Whether managing a single project or a portfolio of construction projects concurrently, project managers must ensure they adhere to the established project requirements. This includes staying within the allocated budgets and deadlines, and mitigating any issues that could disrupt the smooth completion of a construction project. This can be a daunting task for project managers, placing them and their team members under pressure.
With EVM, project teams can track and measure their project’s progress and performance against the original plans. This ensures that project teams know their standing at any stage of a project and can implement appropriate contingency plans to keep the project on track.
Let’s delve into how construction project teams can implement Earned Value Management using Primavera P6 software.
How to implement Earned Value Management in Primavera P6
Calculate the planned value
The planned value (PV) refers to the budget allocated before the project commenced, based on a review of the original project planning phase. The PV serves as a baseline for project managers when tracking costs incurred in a project. Therefore, project managers should determine the PV for each activity, which represents the actual costs incurred up to the current point in time.
Calculate the actual cost
The actual cost (AC) refers to the final calculation of all costs from the project’s inception to its completion. AC typically differs from PV in that there are variances in figures after accounting for all costs during the construction project’s execution. Using Primavera P6, PMs should determine the AC for each activity, from the start to the completion of the project.
Calculate the earned value
The earned value (EV) refers to the value of the work actually performed in a construction project. It is typically measured against the original planned budget to assess the project’s performance. This is done by multiplying the percentage of work completed by the budget at completion. Project managers can use Oracle Primavera P6 to determine the EV of each project activity.
Update the schedule and budget
If a construction project’s progress at any stage deviates significantly from the baseline amount set during the original project planning phase, consider implementing a contingency plan. Adjust the construction project schedule and budget based on the analysis of various EVM metrics. This could involve updating estimates for the remaining work or adjusting resource allocations.
Leverage Earned Value Management in Primavera P6 with Compass Consult
While many construction project teams strive to provide their clients with optimised project deliverables, meet set deadlines, and stay within budget, many fall short of expectations. Managing a construction project can be challenging due to external factors or unforeseen circumstances that could impact the project’s progress.
These challenges are not uncommon. To navigate these challenges, Compass Consult has a team of experienced professionals dedicated to teaching project teams how to leverage Earned Value Management using the Primavera P6 software.
With our support for project management software implementation, expert consultations and training, we can help project teams achieve better project outcomes, regardless of the complexity of your construction project.
Contact Compass Consult today to leverage our expertise in Earned Value project planning consultancy and enhance your project management capabilities.
