K N O W L E D G E S H A R I N G S E SS I O N

E A R N E D VA L U E – B A S I C C O N C E P T A N D F O R M U L A E
 N e c e s s i t y o f C o s t M o n i t o r i n g To o l s

 The project team generally gives emphasis to complete the project in Physical
unit and neglect the Cost Aspect.

 Huge investments are required in any construction project and the organization
or stockholders needs returns on investment. Hence monitoring of project
performance as a whole or individual task requires in order know the variances
at any stage of project so that appropriate decisions can be taken well within
the time in order to minimize the negative variance/Losses.

 Todays in the competitive era organizations are taking the projects in very less
profit margin. A small variation leads to heavy loss. Hence it is a grate task for
project team to perform with respect to timely completion and to complete the
project well within the Budgeted Cost.
 N e c e s s i t y o f C o s t M o n i t o r i n g To o l s

Contd ……….

 Integration between schedule progress and cost management is missing in most

of the construction project.

 One of the main reason in delay in project is Timely Decision. If the decisions
has not taken well within the time it has not only impact on schedule but also
impact the cost. Any delay in taking decisions has time over run and cost over
run. EVM techniques helps the project management team to take timely
decisions.

 Cost monitoring aspect is neglected in many of the project. If cost monitoring is

not done at regular intervals the project management team, stockholders,
Owner will not able to know about the fund requirement to complete the work.
It has been seen that many projects are under hold or not progressing due to
wants of fund. EVM technique helps in Fund Management in terms of “Cost at
Completion” or “Cost to complete”.
 D i ff e r e n t M o n i t o r i n g t o o l s t o M o n i t o r H e a l t h o f
Project

One of the great challenge in front of companies executing the civil projects is to complete
the project within the contractual requirements which includes time duration, Mile Stones ,
Specifications.

It has been often seen that many companies fails in adhering the contractual requirements.
There is many unforeseen situations/ contingencies encountered during the executing the
project on ground.

The work/tender has been awarded based on the L1 Bid basis and many of times it is seen
that companies in order to take the work/contracts bidding low. Generally it is below the
estimated cost of work. After winning the contract, many companies struggling in timely
mobilization of required resources,arrangement of working capital, maintaining profit margin.

In order to maintain the contractual requirements as well as cost, there is a need of effective
monitoring tools and techniques which serve as eye opener to top management. Many
companies has a well established system of monitoring.
 D i ff e r e n t M o n i t o r i n g t o o l s t o M o n i t o r H e a l t h o f
Project
Contd ……….
Some of the Tools and techniques which companies are following in order to meet their
requirements of monitoring time schedule and project expenses.

Techniques :

 Daily Progress Report

 Tracking of Base line Work Plan by updating it on regular intervals mostly on monthly
basis.

 Tracking of Actual Expenses incurred to execute the particular task and cost to estimate
for balance quantum of work.

 Comparative Statement of Plan Vs Actual.

 Various other reports which directly or indirectly related to time and cost like
Reconciliation of Major materials – to know the actual wastage and comparing it
with Budgeted Wastage provision