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Earned Value Management and its Applications

A Case of an Oil & Gas Project in Kazakhstan

 

STUDENT PAPER

By Assylkhan Ziyash

Kazakh-British Technical University

Almaty, Kazakhstan

 



Abstract

This research is performed in the study of issues in project control and progress performance evaluation. Particularly, it focuses on the progress measurement by applying the Earned Value Management (EVM). EVM is one of the widely used approaches for project monitoring and control which allows one to assess project progress through scope, schedule, and cost measurements. In order to track the progress effectively the measurements data should be provided systematically. According to the previous research studies on this subject, there are a lot of benefits that have been associated with the use of EVM in Project Management (PM).

The main purpose of this research is to assess how EVM, when applied to a real project, helps a project manager to be successful in terms of budget utilization and adherence to schedule. This study is aimed to well understanding of the actual cost expenditures versus planned costs and potential usage of EVM to compare and analyze the available data.

For the purpose of data collection, this research evaluates a project that has recently been delivered in the oil and gas industry in Kazakhstan. The study compares actual spending against planned values. It should be noted that the current project did not apply the EVM methodology while being executed. The project had significant cost increase from original budget. Lessons learned revealed that cost increase was occurred due to several circumstances: scope changes, engineering omissions, construction failures due to engineering omissions, and severe winter conditions where the baselined schedule was optimistically evaluated during the planning stage of the project. In fact, to increase the efficiency of project control, it is advisable to decompose the work activities thus monitoring and corrective actions can be applied for each activity precisely. Timely performing an analysis on cost expenditures through EVM methodology may help to increase the efficiency of budget use and possibly protect from cost overruns and schedule delays.

The study reveals that EVM brings many benefits to project managers. In particular, it was determined that EVM allows one to recognize schedule delays in a timely manner, predict cost overruns, analyze the variances of the project cost and schedule performances, as well as forecast schedule and cost outcomes. Also, the approach is helpful as it assists project managers in the tasks of mitigating risks related to scope, schedule, and cost, timely informing project customers on potential issues regarding project progress and performance, and implementing corrective actions as necessary.

Keywords: Earned Value Management (EVM), Project Control, Oil and Gas, Kazakhstan.

Introduction

All projects create change; many projects change lives in significant ways and, in many parts of the world, projects actually save lives. To be successful, all projects should be planned and implemented properly. The PM World Library provides information and resources for managing projects, information not always available in many places and in many organizations. Project management information and knowledge can lead to more successful projects, transforming lives and creating a better future. (PM World Journal, 2016).

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Editor’s note: Student papers are authored by graduate or undergraduate students based on coursework at accredited universities or training programs.  This paper was prepared for the course “Project Management Fundamentals” and was part of a thesis in fulfillment of the requirements for Master of Science degree in Supply Chain & Project Management in the Business School of Kazakh-British Technical University, Almaty, Kazakhstan. Course instructor and thesis supervisor was Dr. Timur Narbaev.

How to cite this paper:
Ziyash, A. (2018). Earned Value Management and its Applications: A Case of an Oil & Gas Project in Kazakhstan, PM World Journal, Volume VII, Issue 5, May 2018. https://pmworldjournal.net/wp-content/uploads/2018/05/pmwj70-May2018-Ziyash-earned-value-management-and-its-application-student-paper.pdf



About the Author


Assylkhan Ziyash

Almaty, Kazakhstan

 




Assylkhan Ziyash
is a Kazakhstan based Project Manager working in the oil and gas industry. He holds a Master’s of Science degree in Supply Chain and Project Management from the Kazakh-British Technical University. He has been working in Project Management field for over 6 years, managing the complex multidiscipline projects in the oil and gas plants.

Assylkhan can be contacted through email: [email protected] or LinkedIn