Risk factors affecting the ability for earned value management to accurately assess the performance of infrastructure projects in Australia

Purpose – The purpose of this paper is to investigate a set of risk-related factors influencing the earned value management (EVM) concept as an assessment technique in evaluating the progress of modern sustainable infrastructure construction projects. Design/methodology/approach – A qualitative research approach has been adopted for identifying risk-related factors influencing EVM concept from a literature review and through interviewing industry personnel, followed by an inductive process to form sets of key factors and their measuring items. Findings – EVM is a common method for assessing project performance. A weakness of this approach is that EVM assessment in its current form does not measure the impact of a number of project performance factors that result from the complexity of modern infrastructure construction projects, and thus does not accurately assess their impact in this performance. This paper discusses and explains a range of potential risk factors to evaluating project performance such as sustainability, stakeholder requirements, communication, procurement strategy, weather, experience of staff, site condition, design issues, financial risk, subcontractor, government requirements and material. In addition, their measuring items were identified. Practical implications – This research assists projects managers to improve the evaluation process of infrastructure construction performance by incorporating a range of factors likely to impact on that performance and which are not included in current EVM calculations. Originality/value – This research addresses the need to include in the EVM calculation a range of risk factors affecting the performance of infrastructure projects in Australia and therefore makes this calculation a more reliable tool for assessing project performance

Evaluation of assessment of infrastructure construction project performance in Australia using a modified concept of earned value management

Australian infrastructure projects help promote national development and contribute significantly to the national economy. Assessing project performance is an important component of construction project management. Although there are many studies on the development of Australian infrastructure project assessment methods, factors influencing the performance of Australian infrastructure projects have not been explored. As a result of rapid developments in infrastructure projects and global economic trends towards environmental sustainability, there is an urgent need to study and assess the impact of risk-related factors on the performance of Australian infrastructure projects. The method commonly used to assess performance during project execution is Earned Value Management (EVM). A weakness of this approach is its inability to specifically measure the impact of a number of factors on project performance. Due to the complexity of infrastructure construction projects, the current EVM approach is not sufficient to accurately predict project performance in the Australian infrastructure construction environment. This complexity is particularly associated with risk-related factors. Therefore, the gap is the need to develop an integrated approach to EVM that provides a modified EVM concept considering risk-related factors affecting the performance of the infrastructure project in Australia. A set of risk-related factors was identified from the literature review and structured interviews with 15 interviewees. The set of risk-related factors was then tested with a questionnaire that was examined by a pilot study by using RII. The results of the questionnaire were analysed using SPSS and AMOS by using structural equation modelling (SEM) to extract the Risk Performance Index (RPI). The RPI was incorporated into the Estimate at Completion (EAC) equation to modify the concept. The performance of the revised concept was validated using historical data from previous Australian infrastructure projects. The result was a modified concept of EVM possessing greater precision and realism, and more able to assess the performance of infrastructure construction projects in Australia by taking into account the impact of emerging and other factors in the evaluation process. The risk-related factors identified are sustainability (SS), stakeholder requirements (SR), communication (CM), procurement strategies, weather (WE), experience of staff (SE), site condition (SC), design issues (DI), financial risk (FR), subcontractor/s (CO), government requirements authority (GR) and material (MR). These factors have a clear impact on the performance of infrastructure projects in Australia by affecting the project duration and cost. The modified concept of EVM will assist project managers to evaluate and monitor project performance in a better way. In addition, the outputs of this research can be used in future research by examining the impact of these factors on the performance of projects in countries other than Australia