ON THE LIMITATIONS OF THE EARNED VALUE MANAGEMENT TECHNIQUE TO ANTICIPATE PROJECT DELAYS

Abstract

A significant proportion of projects across the construction industry fail to meet their planned completion dates, being this a recurrent topic in the project management literature. Multiples causes of project delays have been proposed, however, hardly any attention has been paid to the fact that the most celebrated project monitoring and control technique – the Earned Value Management (EVM) – may not be as fit for purpose as it seems. It is proposed that because EVM ignores activity duration variability it always results in optimistic completion dates which may be very difficult to meet in the real projects. This research offers a fresh and long overdue critique of EVM in its most common implementation (assuming deterministic activity durations and costs), while highlighting its shortcomings. Particularly, Monte Carlo simulations are implemented to exemplify how the merge event bias phenomenon is inadvertently impacting the schedule in both time and cost dimensions. A fictitious case study is used to demonstrate the connection between these shortcomings and what is then conceived as a delay in project completion.