ISSN: 2277-3754

ISO 9001:2008 Certified

International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014

An Analysis on Resource Planning, Cost

Estimation and Tracking of Project by Earned
Value Management
SHAIK MOHAMMAD MASOOD, DEVANAND.R, HARSHA H.N
PG Student, Department of Civil Engineering, G.E.C, Hassan
Assistant Professor, Department of Civil Engineering, G.E.C, Hassan
Assistant Professor, Department of Civil Engineering, G.E.C, Hassan
plans based on actual cost, schedule and technical progress
of work [1, 9].

Abstract- Construction industry is the second largest sector in

India. Many construction projects suffer from time and cost
overruns due to a multiplicity of factors. Earned value
management (EVM) is a project performance evaluation which
has been adapted for application in project management. This
technique helps in comparison of budgeted cost of work to actual
cost. The present study deals with the scheduling and project
monitoring process along with it also discusses main parameters
involving in the calculation of earned value analysis in cost and
time management of civil construction project. Methodologies
and analysis are demonstrated in this paper using an example of
real time project. Primavera P6 software is used for project
planning and EVM calculations.

II. RESOURCE PLANNING

In planning resource requirement the following points to
be considered:
a) The total resource requirements for a project over
its duration.
b) Minimum delay in completion of the project when
insufficient resources are available.
c) Most efficient utilization of resources to carry out
the project in a fixed time.

Keywords Earned Value Management, Resource Planning,

Cost Estimation, Performance Index, Variances, Primavera
P6.

Resource planning is the process of making sure

resources are available as required to execute the project
according to schedule. Two types of resource planning
problems exist while preparing schedule. In one, the project
faces a scarcity of resources and the activities on network
must be arranged in such a way that the requirement of
resources does not exceed availability. In case such an
arrangement is not feasible, the one which gives the
minimum additional requirement of resources is chosen.
The resources are allocated among competing activities in
the order of importance. In other type of resource planning
problem the scarcity condition is relaxed and what is needed
is to level up the highly fluctuating demand for resources at
different times, primarily to facilitate project supervision
and enhance efficiency.

I. INTRODUCTION
Construction industry is important at both global and
national level. It provides huge employment to the people
and plays very significant role in country economy. Project
delay is most common problem in construction industry.
Project overruns due to time and cost result in delays during
project execution. In developing countries project overrun is
serious problem where implementation of project faces
many uncertainties. It result in wastage of scare financial
resource, delays in providing facilities, development and
also makes construction costlier [4]. EVM is the process of
measuring performance of project work against a baseline
plan. EVM application helps in providing performances
standard for the evaluation of progress report project and it
also acts as a control device to take care of time and cost
schedule by responsibility defined Organization Breakdown
Structure (OBS). It provides better performance picture of
project and gives better forecast of the final completion
cost. Earned value is an enhancement over traditional
process of cost accounting [9]. Traditionally budgeted cost
is evaluated by computing the difference between planned
cost and actual cost incurred in a project. The focus was on
planned expenditures and actual cost. Earned value reveals
future opportunities and it also examines actual
accomplishment. With help of EVM, project managers get
sufficient help to have deep intuitive understanding into
potential risk areas. So that with help of clearer picture of
project performances, managers can create risk mitigation

III. COST ESTIMATION

Cost estimating is the process of calculating the cost of
the identified resources needed to complete the project
work. One doing estimating must consider the possible
fluctuations, conditions and other causes of variances that
could affect the total cost the estimation. There is distinct
difference between cost estimating and pricing. A cost
estimate is the cost of the resource required to complete the
project work. Pricing however includes a profit margin.
During the actual execution of the construction, detailed
analysis of costs are required to be made. The cost estimates
prepared during the design stage may not be sufficient or
applicable during the execution stage. During the execution
stage, the control estimation system serves two useful
purposes.

42

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014
document, Bill of Quantities and abstract sheets provides
It develops the production information for
necessary data for project cost and scheduling activities.
materials, labour and equipment that can be used
Total area is 7881 sq.ft. The work should be completed
as inputs for future estimates.
within 160 working days. The project was schedule from
It generates information so that one may study to
27th January 2014 to 10th July 2014 and four sets of tracking
take corrective measures to minimize the cost at
are done at different intervals and final tracking was till 30 th
any step.
June 2014. The main objective of study is to understand the
role of EVM for monitoring and control in progress and
COST ESTIMATE INPUTS
timely completion of construction project goals are
achieved through literature review and methodology
a) Using the Work Breakdown Structure
involved in Earned Value Management.
b) Relying on the resource Requirements
c) Calculating Resource Rates
VI. METHODOLOGY AND ANALYSIS OF EVM
d) Estimating Activity Duration
The construction projects are so vast and complex in
e) Historical Information
nature and therefore for simplification of work, use of
softwares came into existence. The project was scheduled
ESTIMATING PROJECT COSTS
and monitored using Primavera P6 software. Primavera is
the Project Management software use for Planning,
a) Analogous Estimating
Scheduling and Controlling the Construction Project. The
b) Parametric Modeling
steps involved in Duplex Apartment are as follows:
c) Bottom-up Estimating
Brickwork, Plastering, Flooring, Cabinetry, False Ceiling
d) Computerized Tools
and Terrace works. The WBS for the project is created and
several activities are identified. The durations of the
OUTPUTS FROM COST ESTIMATION
activities are estimated on basis of Historical data,
interviews with project manager, applying labour
a) Cost Estimates
productivity factor formulae and application of analysis of
b) Supporting details
rates. The relationships are examined and applied to the
c) Cost management plan
activities. The following procedure involved in scheduling
and monitoring projects.
IV. CONCEPTS OF EVM
Table 1 PROCEDURE IN PRIMAVERA
Earned value analysis is a method of performance
measurement. Earned value is a program management
1
Create Project
technique that uses work in progress to indicate what will
2
Define WBS
happen to work in future. EVM is system for planning and
3
Creating Calendars
controlling the project cost performances. EVM establish
work packages earned value baseline by integrating project
4
Define Activities
scope, time and cost objectives [6, 8]. This baseline is called
5
Appoint Activity Durations
as cost control and is used for performance evaluation of
6
Assign Logic Links
project on a given date. Analysis of variance from the
7
Perform Scheduling
baseline provides the cost related informations for problem
identification, trend analysis and corrective actions such as
8
Allocating Resources/Budgeting
re-planning and revising budget. Earned value analysis
9
Creating Baselines
serves two main purposes, it analyses cost changes which is
10
Updating schedule
resulting in time and cost over-run or under-run so that
11
Earned Value Analysis
timely corrective actions are taken such as modification of
cash flow, updating financial forecast and project
12
Publishing Reports
profitability expectations. Analysis of variance from
baseline using earned value management systems given
variety of variances which are analyzed to provide current
SCHEDULE ANALYSIS: Earned value is a technique
status of project, to initiate corrective actions and to forecast
for measuring project performance according to project cost
future trends [6].
and schedule. The comparison between budgeted and actual
performance is performed. There are three earned value
parameters as shown below.

V. CASE STUDY
The case study is a Duplex Apartment of Windmills of
Your Mind at Whitefield, Bangalore. The useful
informations has been taken from actual project. Tender

43

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014
Planned Value (PV): It is the cost of the project
SPI = Earned Value / Planned Value
according to the schedule of the project. It is also called
SPI = 1 means Project is on Schedule
Budgeted Cost of Work Schedule (BCWS).
SPI < 1 means Project is behind Schedule

Earned Value (EV): It is the Budgeted Cost of the Work

Performed (BCWP) till date. It is cumulative budgeted cost
incurred in activities that have been completed on the due
date.
Actual Cost (AC): It is the actual cost that has spent on
the project till date. It is also called as actual Cost of Work
Performed (ACWP).
The variances are used to check deflection or deviation of
project from the path of original schedule. It is also used to
analyze the extent and cause for the delays of works or tasks
of the project. Following re two variances:
Cost Variances (CV): It is used to check the difference
between the proposed planned project and present project
on the specific date. It shows the variation of project in
form of cost. The formula used for calculating cost
variances is
Cost Variance = Earned Value Actual Cost

SPI > 1 means Project is ahead of Schedule

Cost Performance Index (CPI):
CPI can be used estimate the project cost to complete the
project based on performance to date. It is calculated as
follows,
CPI = Earned Value / Actual Cost
CPI = 1 means Planned and Actual cost are same
CPI < 1 means Project is under Budget
CPI > 1 means Project is over Budget
Estimate at Completion (EAC): The Estimate at
Completion is the actual cost to date plus an objective
estimate of costs for remaining authorized work. The most
common is

Schedule Variance (SV): It is used to examine the

deflection of present project in from the planned project. If
considerable change appears than the project objectives
must be revised. The formula for calculating the schedule
variance is

EAC = Actual cost + Estimate to Complete

Schedule Variance = Earned Value Planned Value

Schedule Performance Index (SPI): SPI can be used to
estimate the projected time to complete the project. It is
calculated as follows,

Fig. 1: EVM Parameters, Gantt chart view and S-curve in Primavera

44

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014

Fig. 2: Tracking process in Primavera

VII. RESULTS
Table 2 RESULTS OBTAINED FROM PRIMAVERA P6
EVM Paramater

Tracking 1

Tracking 2

Tracking 3

Tracking 4

Budgeted at Completion

Rs. 80,12,225

Rs. 80,12,225

Rs. 80,12,225

Rs. 80,12,225

Planned Value

Rs. 7,02,334

Rs. 27,68,881

Rs. 61,94,005

Rs. 77,29,472

Earned Value

Rs. 7,02,334

Rs. 25,54,523

Rs. 56,13,448

Rs. 68,17,173

Actual Cost

Rs. 7,02,334

Rs. 28,15,802

Rs. 64,51,565

Rs. 80,36,983

Schedule Performance
Index

0.92

0.90

0.88

Schedule Variance

Rs. 2,14,358

Rs. 5,80,557

Rs. 9,12,299

Cost Performance Index

0.90

0.87

0.84

Cost Variance

Rs. 2,61,279

Rs. 8,38,117

Rs. 12,19,810

Estimate at Completion

Rs. 80,12,225

Rs. 82,73,504

Rs. 88,50,342

Rs. 92,32,035

Planned Schedule %
Complete

8.77%

34.5%

77.3%

96.4%

Actual Schedule %
Complete

8.77%

32%

70%

85%

45

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014
Table 3 CUMULATIVE COST AFTER TRACKING 4 FROM PRIMAVERA P6

1JAN 2014

1 FEB 2014

1 MAR 2014

1 APR 2014

1 MAY 2014

1 JUN 2014

1 JUL 2014

Planned Value
Cost

Rs. 33,428

Rs. 4,97,046

Rs. 4,33,150

Rs.18,05,257

Rs. 34,25,124

Rs. 15,35,467

Rs. 2,82,753

Cumulative
Planned Value
Cost

Rs. 33,428

Rs. 5,30,474

Rs. 9,63,624

Rs. 27,68,881

Rs. 61,94,005

Rs. 77,29,472

Rs.80,12,225

Earned Value
Cost

Rs. 33,428

Rs. 4,97,046

Rs. 3,34,898

Rs. 16,89,151

Rs. 30,58,925

Rs. 12,03,725

Cumulative
Earn Value
Cost

Rs. 33,428

Rs. 5,30,474

Rs. 8,65,372

Rs. 25,54,523

Rs. 56,13, 448

Rs. 68,17,173

Actual Cost

Rs. 33,428

Rs. 4,97,046

Rs.3,89,548

Rs. 18,95,780

Rs. 36,35,763

Rs. 15,85,418

Cumulative
Actual Cost

Rs. 33,428

Rs. 5,30,474

Rs. 9,20,022

Rs. 28,15,802

Rs. 64,51,565

Rs. 80,36,983

Fig. 3: Earned Value Analysis Graph after First Tracking

Fig. 4: Earned Value Analysis Graph after Second Tracking

46

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014

Fig. 5: Earned Value Analysis Graph after Third Tracking

Fig. 6: Earned Value Analysis Graph after Fourth Tracking

VIII. CONCLUSION
EVM provides important information for project work
package decision making.
The efficiency of project is demonstrated by SPI is 0.88
which is less than 1 hence project performed less
efficiently and running at about 88% of the planned
schedule.
Schedule Variance of the project is Rs. 9, 12,299 the
negative sign determines that project is lagging behind
the original schedule.
CPI indicates the project efficiency of project
utilization. For best case scenario, it must be equal to 1
or higher. However for current project is 0.84, this
shows that project has low cost efficiency as compared
to its spending.

Cost Variance of the project is Rs. 12, 19,810 the

negative value which depicts an unfavorable scenario.
The project is over budget by 16% of overall cost.
The study shows important, implementation and unique
features of EVM that benefits project managers and
ultimately results in project success.

The key point here is that Earned Value Analysis enables

you to spot a potential problem early in the project and do
something to correct the situation. Earned Value
Management is a remarkable method of project
management because it integrates cost, schedule and scope
and can be used to forecast future performances and project
completion dates. It allows projects to be managed better on
time and in budget.

47

ISSN: 2277-3754
ISO 9001:2008 Certified
International Journal of Engineering and Innovative Technology (IJEIT)
Volume 4, Issue 4, October 2014
AUTHORS PROFILE
IX. RECOMMENDATION for FUTURE
RESEARCH
The future research in general will include probably new
metrics in the EVM methodology to take into account issues
like Risk Analysis or Quality and technical performance for
an efficient project control. Implementation of EVM creates
lot of extra work where it is difficult to integration of
companys planning, scheduling, budgeting, work
authorization and cost accumulation processes with each
other. All these project management constrains likely to
Mr. Shaik Mohammad Masood has
obtained his Bachelor of Engineering (Civil Engineering) from
exist on most projects. So future research should be aimed
Islamia Institute of Technology Bangalore and Master in Technology
to reduce the extra work.
(Construction Technology) from Government Engineering College,
Hassan. He secured College Second Rank in B.E. He has worked at
Total Environment Building System Private Limited and has gain
experience in civil construction works of luxury Apartments and
Villas.

ACKNOWLEDGEMENT
The project data used in this study was made available by
Mr. Manoj Kumar General Manager at Total Environment
Building System Pvt Ltd and Dr. Karisiddappa Principal
Government Engineering College, Hassan. I am indebted to
these gentleman for their contribution to this study.
REFERENCES
[1] PMI. Practice Standard for Earn Value Management,
Project Management Institute, USA 2005.
[2] Frank T Anbari (Dec 2003), Earned Value Project
Management Method and Extensions, Project Management
Journal, Vol-3.
[3] T.N Weerasinghe Mohottige,( Nov 2013) Standard Practice
of Earn Value Management and its Impact on Construction
Industry, International Journal of Recent Technology and
Engineering ISSN:2277-3878, Volume-2.

Mr. Devanad.R has completed his B.E

(Civil Engineering) from Sir. MVIT, Bangalore and M.Tech
(Construction Engineering and Management) from Manipal Institute
of technology (MIT), Manipal. Has immense industrial/site
experience having worked at Gammon India Limited and Nagarjuna
Construction Company (Urban) Limited. Presently he is working as
an Assistant Professor in the Department of Civil Engineering at
Government Engineering College, Hassan.

[4] J.R Turner, (1999) The Handbook of Project-Based

Management, 2nd edition, McGraw, New York.
[5] Shatanand Patil, Akshay Patil and Pramila Chavan,(Jun 2012)
Earned Value Management for Tracking Project Progress,
International Journal of Engineering Research and
Application. Vol-2.
[6] K.K Chithkara, (2006) Construction Project Management,
Tata McGraw Hill, 10th edition.
[7] Sharma V.K (May 2013), Earned Value Management: A Tool
for Project Performance Advances in Management Journal,
Vol-6.
[8] A.A. Lakade and A.K. Gupta, A Project Management
Approach using Primavera in Construction Industry,
International Journal of Mechanical and Civil Engineering,
ISSN: 2278-1684.

Mr. Harsha H.N has completed his B.E

(Civil) degree from Bangalore Institute of Technology and M.E
(Construction Technology) from UVCE Bangalore. Has immense
Industrial/site experience having worked at Gina Engineering
Company Private Limited, Nitesh Estates Private Limited and
Bharathiya Reserve Bank Note Mudran Private Limited. Has
teaching Experience at East Point College of Engineering, Bangalore.
Presently he is working as an Assistant Professor in Department of
Civil Engineering at Government Engineering College, Hassan.

[9] Sagar K. Bhoesekar, Gayatri Vyas, (Apr 2012) Cost

Controlling Using Earned Value Analysis in Construction
Industries, International Journal of Engineering and
Innovation Technology, Vol-1.
[10] G.P Prabhakar, (Aug 2008) Projects and their Management:
a Literature review, International Journal of Business and
Management, Volume 3.

48