Abstract
Poor performance measurement practices in the oil and gas industry can cause project cost overruns, schedule delays, and scope increases. Earned value management, as an integrated project planning and control method measuring cost and schedule performance, enables the early detection of performance issues, and allows corrective actions to be implemented in a timely manner. Through a structured interview survey, this study aimed to identify the current maturity level of earned value management practice in Malaysian oil and gas firms to determine the barriers hindering the use of this practice, and to identify critical success factors for enhancing earned value management implementation in the oil and gas industry. The findings revealed the major barriers to earned value management implementation, and potential strategies to improve the effectiveness of earned value management practice in this industry.
Highlights
In a competitive and rapidly changing business environment, project clients and their contractors from government and private sectors around the world are constantly under pressure to achieve better performance in projects, regardless of size, industry sector, or geographical location [1, 2]
This study investigated the current maturity level, practice barriers, and success factors of earned value management (EVM) practice in Malaysian oil and gas firms
Using the EVM practice analysis portrayed in radar charts, this study found the barriers and success factors to improve the current maturity level of EVM practice
Summary
In a competitive and rapidly changing business environment, project clients and their contractors from government and private sectors around the world are constantly under pressure to achieve better performance in projects, regardless of size, industry sector, or geographical location [1, 2]. The Project Management Institute’s (PMI) practice standard for earned value management elucidates earned value management (EVM) as “a management methodology for integrating scope, schedule, and resources; for objectively measuring project performance and progress; and for forecasting project outcomes” [30]. According to Lukas [34], the EVM approach measures work performance by integrating schedules and budgets based on the work breakdown structure (WBS) of the project. EVM provides an integrated management control methodology that provides forecasts and early warnings of performance issues to enable timely corrective actions to ensure project success [4, 5]. EVM is regarded as a ‘best practice‘ and standard for project performance management by many government agencies and private industry practitioners [13,14,15,16,17]. EVM is considered an effective performance measurement and feedback tool for managing projects [30, 35]
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