Earned Value Management
Spire utilizes earned value management systems to critique and measure a contractor’s forward progress. With earned value management in place, Spire can assist any owner or contractor in monitoring cost and schedule performance to identify whether a project is behind or ahead of schedule and under or over budget. Earned value management services can also complement Spire’s CPM scheduling services to ensure that the budget and the project schedule are monitored for discrepancies.
What Is Earned Value Management in Project Management?
Earned value management (EVM) is the process of monitoring construction progress and performance. Three values determine the status of a construction job — the planned value, the actual cost, and the earned value. EVM can predict the need for spending down the road, allowing a project manager to change their course of action based on concrete data.
Between job cost estimates, building a work breakdown structure, and submitting an initial schedule of values, it’s easy to set out a plan for success. Project planning is important, but without regularly checking in on the project’s health, it often appears impossible to know how things are really going.
By constantly keeping an eye on both the actual cost of work performed and the earned value of the project, it’s easier to anticipate any potential issues.
Earned Value Management Terms to Know
Spire Consulting Group helps you see how your construction project is doing from a financial perspective. Our professionals remain transparent with you through the planning, building, and final stages. The terms below describe some core concepts to know with EVM:
- Planned value: This value describes the amount of work to be completed by a certain time on your building schedule. You can calculate the planned value of a project with the following formula — the percentage of the project complete (planned) x your budget at completion.
- Actual cost: The actual cost tells you how much a project costs over a given period. This numeric value should include direct and indirect expenses.
- Earned value: The earned value of a construction job explains how much money should be spent to accomplish a specific goal. This is a dollar amount describing the value of work completed up to a certain time. You can find the earned value of your work by taking the percentage of work completed (actual) and multiplying it by your budget at completion.
The Advantages of Earned Value Management for Your Construction Projects
There are several benefits of earned value management services for construction projects. Working with the team at Spire helps you see these advantages for yourself:
- Stay in the know about project costs.
- Identify how a project is doing financially according to its projections.
- Change your course of action based on numerical data.
- Alter the scope or budget for a project before you deplete funds.
- Add accurate financial information to construction portfolios for stakeholders.
- Recognize when you need to increase efficiency, hire more contractors, or look for additional resources.
- Plan for days on-site knowing if you’ll abide by or exceed the spending budget for performance.
- Make decisions relating to your project based on actual data versus gut feelings.
- Adapt to changes in a construction schedule knowing where you are at in terms of budget.
How Spire Consulting Group Helps You
We assist our clients in developing, monitoring, and measuring the following cost and schedule parameters:
- Budgeted Cost of Work Scheduled (BCWS)
- Budgeted Cost of Work Performed (BCWP)
- Actual Cost of Work Performed (ACWP)
- Cost Variance (CV)
- Schedule Variance (SV)
- Cost Performance Index (CPI)
- Schedule Performance Index (SPI)
Reach out to Spire for Earned Value Management Services for Your Construction Efforts
Interested in our value management services? Contact our team of experts today to schedule a consultation and learn more about how we can help.