Interpretive structural modeling in Earned Value Management
Abstract
The primary purpose of the current study is introducing a comprehensive approach to identify the relationship among different criteria in Earned Value Management (EVM). EVM is a well-known approach in project management context that can monitor schedule and cost performance indexes in projects simultaneously. The EVM detects current project performances and also predicts at completion costs of the project. In this study, employing Interpretive Structural Modelling, interactions which exist among affecting factors on EVM’s success are determined. First, all of the practical factors on EVM are determined and categorized into four main clusters; then the most effective ones are separated from the clusters; eventually, ISM is used based on eleven ultimate critical criteria. The results demonstrate that “Instability in the construction market” and “Macroeconomic indicators” are the most influencing factors affecting the EVM. Finally, a novel method for enhancing the performance of conventional EVM is presented. The proposed approach would be highly applicable for engineering managers who are willing to promote the current performance of the systems. Most studies have been previously carried out on the applications of the EVM in terms of improving final cost and total duration elapsed whereas there is not any particular study on the EVM issue which has stated the key factors that influence the EVM and lasting effect on the project performance. It should be noted that the proposed approach can be employed through the life cycle of any project particularly in construction projects.
Keyword : Earned Value Management, interpretive structural modelling, schedule and cost performance indexes, CPI, at completion costs
How to Cite
Bagherpour, M. ., Khaje Zadeh, M. ., Mahmoudi, A. ., & Deng, X. . (2020). Interpretive structural modeling in Earned Value Management. Journal of Civil Engineering and Management, 26(6), 524-533. https://doi.org/10.3846/jcem.2020.12182
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Baghdadi, A., & Kishk, M. (2015). Saudi Arabian aviation construction projects: Identification of risks and their consequences. Procedia Engineering, 123, 32–40. https://doi.org/10.1016/j.proeng.2015.10.054
Bari, N. A. A., Yusuff, R., Ismail, N., Jaapar, A., & Ahmad, R. (2012). Factors influencing the construction cost of industrialised building system (IBS) projects. Procedia-Social and Behavioral Sciences, 35, 689–696. https://doi.org/10.1016/j.sbspro.2012.02.138
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Dursun, O., & Stoy, C. (2012). Determinants of construction duration for building projects in Germany. Engineering, Construction and Architectural Management, 19(4), 444–468. https://doi.org/10.1108/09699981211237139
Elawi, G. S. A., Algahtany, M., & Kashiwagi, D. (2016). Owners’ perspective of factors contributing to project delay: Case studies of road and bridge projects in Saudi Arabia. Procedia Engineering, 145, 1402–1409. https://doi.org/10.1016/j.proeng.2016.04.176
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Graham, D. R. (2007, March). Using cost-risk to connect cost estimating and earned value management (EVM). In 2007 IEEE Aerospace Conference. Big Sky, MT, USA. https://doi.org/10.1109/AERO.2007.353026
Jayant, A., & Azhar, M. (2014). Analysis of the barriers for implementing green supply chain management (GSCM) practices: An interpretive structural modeling (ISM) approach. Procedia Engineering, 97, 2157–2166. https://doi.org/10.1016/j.proeng.2014.12.459
Kasravi, M., Mahmoudi, A., & Feylizadeh, M. R. (2019). A novel algorithm for solving resource-constrained project scheduling problems: a case study. Journal of Advances in Management Research, 16(2), 194–215. https://doi.org/10.1108/JAMR-03-2018-0033
Khodeir, L. M., & Mohamed, A. H. M. (2015). Identifying the latest risk probabilities affecting construction projects in Egypt according to political and economic variables. From January 2011 to January 2013. HBRC Journal, 11(1), 129–135. https://doi.org/10.1016/j.hbrcj.2014.03.007
Khoshgoftar, M., Bakar, A. H. A., & Osman, O. (2010). Causes of delays in Iranian construction projects. International Journal of Construction Management, 10(2), 53–69. https://doi.org/10.1080/15623599.2010.10773144
Kuchta, D. (2005). Fuzzyfication of the earned value method. WSEAS Transactions on Systems, 4(12), 2222–2229.
Lipke, W., Zwikael, O., Henderson, K., & Anbari, F. (2009). Prediction of project outcome: The application of statistical methods to earned value management and earned schedule performance indexes. International Journal of Project Management, 27(4), 400–407. https://doi.org/10.1016/j.ijproman.2008.02.009
Long, N. D., Ogunlana, S., Quang, T., & Lam, K. C. (2004). Large construction projects in developing countries: a case study from Vietnam. International Journal of Project Management, 22(7), 553–561. https://doi.org/10.1016/j.ijproman.2004.03.004
Mahmoudi, A., & Feylizadeh, M. R. (2018). A grey mathematical model for crashing of projects by considering time, cost, quality, risk and law of diminishing returns. Grey Systems: Theory and Application, 8(3), 272–294. https://doi.org/10.1108/GS-12-2017-0042
Mahmoudi, A., Bagherpour, M., & Javed, S. A. (2019). Grey earned value management: Theory and applications. IEEE Transactions on Engineering Management, 1–19. https://doi.org/10.1109/TEM.2019.2920904
Marzouk, M. M., & El-Rasas, T. I. (2014). Analyzing delay causes in Egyptian construction projects. Journal of Advanced Research, 5(1), 49–55. https://doi.org/10.1016/j.jare.2012.11.005
Movahedipour, M., Zeng, J., Yang, M., & Wu, X. (2017). An ISM approach for the barrier analysis in implementing sustainable supply chain management: An empirical study. Management Decision, 55(8), 1824–1850. https://doi.org/10.1108/MD-12-2016-0898
Muya, M., Kaliba, C., Sichombo, B., & Shakantu, W. (2013). Cost escalation, schedule overruns and quality shortfalls on construction projects: The case of Zambia. International Journal of Construction Management, 13(1), 53–68. https://doi.org/10.1080/15623599.2013.10773205
Patanakul, P. (2014). Managing large-scale IS/IT projects in the public sector: Problems and causes leading to poor performance. The Journal of High Technology Management Research, 25(1), 21–35. https://doi.org/10.1016/j.hitech.2013.12.004
Polat, G., Okay, F., & Eray, E. (2014). Factors affecting cost overruns in micro-scaled construction companies. Procedia Engineering, 85, 428–435. https://doi.org/10.1016/j.proeng.2014.10.569
Šoltés, V., & Gavurová, B. (2013). Application of the cross impact matrix method in problematic phases of the Balanced Scorecard system in private and public sector. Journal of Applied Economic Sciences, 8(1), 99–119.
Sujatha, E. R. & Sruthi, N. (2016). Application of earned value management to compute the project performance using analytical network process. Jordan Journal of Civil Engineering, 159, 1–12.
Sweis, G., Sweis, R., Hammad, A. A., & Shboul, A. (2008). Delays in construction projects: The case of Jordan. International Journal of Project Management, 26(6), 665–674. https://doi.org/10.1016/j.ijproman.2007.09.009
Tabei, S. M. A., Bagherpour, M., & Mahmoudi, A. (2017). Application of fuzzy modelling to predict construction projects cash flow. Periodica Polytechnica Civil Engineering, 63(2), 647–659. https://doi.org/10.3311/PPci.13402
Toh, T. C., Ting, C., Ali, K. N., Aliagha, G. U., & Munir, O. (2012). Critical cost factors of building construction projects in Malaysia. Procedia-Social and Behavioral Sciences, 57, 360–367. https://doi.org/10.1016/j.sbspro.2012.09.1198
Torp, O., Belay, A. M., Thodesen, C., & Klakegg, O. J. (2016). Cost development over-time at construction planning phase: Empirical evidence from Norwegian construction projects. Procedia Engineering, 145, 1177–1184. https://doi.org/10.1016/j.proeng.2016.04.152
Wa’el, A., Mohd. Razali, Azizah, S., & Ernawati, M. K. (2007). The significant factors causing delay of building construction projects in Malaysia. Engineering, Construction and Architectural Management, 14(2), 192–206. https://doi.org/10.1108/09699980710731308
Xu, H., Zhao, S., Mahmoudi, A., & Feylizadeh, M. R., (2019). A rework reduction mechanism in complex projects using design structure matrix clustering methods. Transactions of Nanjing University of Aeronautics and Astronautics, 36(2), 264–279.
Zidane, Y. J., Johansen, A., Andersen, B., & Hoseini, E. (2015). Time-thieves and bottlenecks in the Norwegian construction projects. Procedia Economics and Finance, 21, 486–493. https://doi.org/10.1016/S2212-5671(15)00203-8
Ahsan, K., & Gunawan, I. (2010). Analysis of cost and schedule performance of international development projects. International Journal of Project Management, 28(1), 68–78. https://doi.org/10.1016/j.ijproman.2009.03.005
Akogbe, R. K. T., Feng, X., & Zhou, J. (2013). Importance and ranking evaluation of delay factors for development construction projects in Benin. KSCE Journal of Civil Engineering, 17(6), 1213–1222. https://doi.org/10.1007/s12205-013-0446-2
Attri, R., Dev, N., & Sharma, V. (2013). Interpretive structural modelling (ISM) approach: An overview. Research Journal of Management Sciences, 2(2), 3–8.
Aziz, R. F., & Abdel-Hakam, A. A. (2016). Exploring delay causes of road construction projects in Egypt. Alexandria Engineering Journal, 55(2), 1515–1539. https://doi.org/10.1016/j.aej.2016.03.006
Baghdadi, A., & Kishk, M. (2015). Saudi Arabian aviation construction projects: Identification of risks and their consequences. Procedia Engineering, 123, 32–40. https://doi.org/10.1016/j.proeng.2015.10.054
Bari, N. A. A., Yusuff, R., Ismail, N., Jaapar, A., & Ahmad, R. (2012). Factors influencing the construction cost of industrialised building system (IBS) projects. Procedia-Social and Behavioral Sciences, 35, 689–696. https://doi.org/10.1016/j.sbspro.2012.02.138
Chester, M., & Hendrickson, C. (2005). Cost impacts, scheduling impacts, and the claims process during construction. Journal of Construction Engineering and Management, 131(1), 102–107. https://doi.org/10.1061/(ASCE)0733-9364(2005)131:1(102)
Cioffi, D. F. (2006). Designing project management: A scientific notation and an improved formalism for earned value calculations. International Journal of Project Management, 24(2), 136–144. https://doi.org/10.1016/j.ijproman.2005.07.003
Dursun, O., & Stoy, C. (2012). Determinants of construction duration for building projects in Germany. Engineering, Construction and Architectural Management, 19(4), 444–468. https://doi.org/10.1108/09699981211237139
Elawi, G. S. A., Algahtany, M., & Kashiwagi, D. (2016). Owners’ perspective of factors contributing to project delay: Case studies of road and bridge projects in Saudi Arabia. Procedia Engineering, 145, 1402–1409. https://doi.org/10.1016/j.proeng.2016.04.176
Feylizadeh, M. R., Mahmoudi, A., Bagherpour, M., & Li, D. F. (2018). Project crashing using a fuzzy multi-objective model considering time, cost, quality and risk under fast tracking technique: A case study. Journal of Intelligent & Fuzzy Systems, 35(3), 3615–3631. https://doi.org/10.3233/JIFS-18171
Fleming, Q. W., & Koppelman, J. M. (1998, July). Earned value project management: A powerful tool for software projects. The Journal of Defense Software Engineering, 19–23. http://anclasol.com/AS/e-books/ing/FREEeBooks/earned%20value%20project%20management.pdf
Frimpong, Y., Oluwoye, J., & Crawford, L. (2003). Causes of delay and cost overruns in construction of groundwater projects in a developing countries; Ghana as a case study. International Journal of Project Management, 21(5), 321–326. https://doi.org/10.1016/S0263-7863(02)00055-8
Graham, D. R. (2007, March). Using cost-risk to connect cost estimating and earned value management (EVM). In 2007 IEEE Aerospace Conference. Big Sky, MT, USA. https://doi.org/10.1109/AERO.2007.353026
Jayant, A., & Azhar, M. (2014). Analysis of the barriers for implementing green supply chain management (GSCM) practices: An interpretive structural modeling (ISM) approach. Procedia Engineering, 97, 2157–2166. https://doi.org/10.1016/j.proeng.2014.12.459
Kasravi, M., Mahmoudi, A., & Feylizadeh, M. R. (2019). A novel algorithm for solving resource-constrained project scheduling problems: a case study. Journal of Advances in Management Research, 16(2), 194–215. https://doi.org/10.1108/JAMR-03-2018-0033
Khodeir, L. M., & Mohamed, A. H. M. (2015). Identifying the latest risk probabilities affecting construction projects in Egypt according to political and economic variables. From January 2011 to January 2013. HBRC Journal, 11(1), 129–135. https://doi.org/10.1016/j.hbrcj.2014.03.007
Khoshgoftar, M., Bakar, A. H. A., & Osman, O. (2010). Causes of delays in Iranian construction projects. International Journal of Construction Management, 10(2), 53–69. https://doi.org/10.1080/15623599.2010.10773144
Kuchta, D. (2005). Fuzzyfication of the earned value method. WSEAS Transactions on Systems, 4(12), 2222–2229.
Lipke, W., Zwikael, O., Henderson, K., & Anbari, F. (2009). Prediction of project outcome: The application of statistical methods to earned value management and earned schedule performance indexes. International Journal of Project Management, 27(4), 400–407. https://doi.org/10.1016/j.ijproman.2008.02.009
Long, N. D., Ogunlana, S., Quang, T., & Lam, K. C. (2004). Large construction projects in developing countries: a case study from Vietnam. International Journal of Project Management, 22(7), 553–561. https://doi.org/10.1016/j.ijproman.2004.03.004
Mahmoudi, A., & Feylizadeh, M. R. (2018). A grey mathematical model for crashing of projects by considering time, cost, quality, risk and law of diminishing returns. Grey Systems: Theory and Application, 8(3), 272–294. https://doi.org/10.1108/GS-12-2017-0042
Mahmoudi, A., Bagherpour, M., & Javed, S. A. (2019). Grey earned value management: Theory and applications. IEEE Transactions on Engineering Management, 1–19. https://doi.org/10.1109/TEM.2019.2920904
Marzouk, M. M., & El-Rasas, T. I. (2014). Analyzing delay causes in Egyptian construction projects. Journal of Advanced Research, 5(1), 49–55. https://doi.org/10.1016/j.jare.2012.11.005
Movahedipour, M., Zeng, J., Yang, M., & Wu, X. (2017). An ISM approach for the barrier analysis in implementing sustainable supply chain management: An empirical study. Management Decision, 55(8), 1824–1850. https://doi.org/10.1108/MD-12-2016-0898
Muya, M., Kaliba, C., Sichombo, B., & Shakantu, W. (2013). Cost escalation, schedule overruns and quality shortfalls on construction projects: The case of Zambia. International Journal of Construction Management, 13(1), 53–68. https://doi.org/10.1080/15623599.2013.10773205
Patanakul, P. (2014). Managing large-scale IS/IT projects in the public sector: Problems and causes leading to poor performance. The Journal of High Technology Management Research, 25(1), 21–35. https://doi.org/10.1016/j.hitech.2013.12.004
Polat, G., Okay, F., & Eray, E. (2014). Factors affecting cost overruns in micro-scaled construction companies. Procedia Engineering, 85, 428–435. https://doi.org/10.1016/j.proeng.2014.10.569
Šoltés, V., & Gavurová, B. (2013). Application of the cross impact matrix method in problematic phases of the Balanced Scorecard system in private and public sector. Journal of Applied Economic Sciences, 8(1), 99–119.
Sujatha, E. R. & Sruthi, N. (2016). Application of earned value management to compute the project performance using analytical network process. Jordan Journal of Civil Engineering, 159, 1–12.
Sweis, G., Sweis, R., Hammad, A. A., & Shboul, A. (2008). Delays in construction projects: The case of Jordan. International Journal of Project Management, 26(6), 665–674. https://doi.org/10.1016/j.ijproman.2007.09.009
Tabei, S. M. A., Bagherpour, M., & Mahmoudi, A. (2017). Application of fuzzy modelling to predict construction projects cash flow. Periodica Polytechnica Civil Engineering, 63(2), 647–659. https://doi.org/10.3311/PPci.13402
Toh, T. C., Ting, C., Ali, K. N., Aliagha, G. U., & Munir, O. (2012). Critical cost factors of building construction projects in Malaysia. Procedia-Social and Behavioral Sciences, 57, 360–367. https://doi.org/10.1016/j.sbspro.2012.09.1198
Torp, O., Belay, A. M., Thodesen, C., & Klakegg, O. J. (2016). Cost development over-time at construction planning phase: Empirical evidence from Norwegian construction projects. Procedia Engineering, 145, 1177–1184. https://doi.org/10.1016/j.proeng.2016.04.152
Wa’el, A., Mohd. Razali, Azizah, S., & Ernawati, M. K. (2007). The significant factors causing delay of building construction projects in Malaysia. Engineering, Construction and Architectural Management, 14(2), 192–206. https://doi.org/10.1108/09699980710731308
Xu, H., Zhao, S., Mahmoudi, A., & Feylizadeh, M. R., (2019). A rework reduction mechanism in complex projects using design structure matrix clustering methods. Transactions of Nanjing University of Aeronautics and Astronautics, 36(2), 264–279.
Zidane, Y. J., Johansen, A., Andersen, B., & Hoseini, E. (2015). Time-thieves and bottlenecks in the Norwegian construction projects. Procedia Economics and Finance, 21, 486–493. https://doi.org/10.1016/S2212-5671(15)00203-8