How to master the special challenges of offshore projects using the Earned Value Analysis

(03.05.2021, C. Brauner, R. Rosenboom, C. Kiencke)

In the first part of the article we gave a brief insight into the Earned Value Analysis and what information can be derived from it. Now, in the second part, we will explain how the Analysis can help to address the special challenges of offshore projects.

Very high, costly resource expenditure

The expenditure of resources is very high, especially in offshore projects. Because the daily rates are usually higher (with 12 hours of work) and the associated very high transport and accommodation costs, every hour of working time is worth “gold” without understating it. The Earned Value Analysis can show very quickly whether the work is progressing as planned or whether there are delays. Mostly on a daily basis, progress is monitored according to plan by indicating whether the work plan has been fulfilled. If the progress is recorded for a day with 30 employees, the Earned Value Analysis returns a value that is based on the original planning. X % progress may return a value of 20 employee days. The analysis provides figures, data and facts, which are the basis for objective discussions. If the project gets out of hand, this is made visible very early on.

Challenging communication through changing teams (back-to-back teams)

The offshore sector is characterized by very international teams. The employees have very different backgrounds and approaches to team leadership. With the Earned Value Analysis, you have a uniform reporting tool that shows the progress graphically. As diverse as the offshore employees are – they all have a technical background and understand the graphical representations.

Remote teams

On an offshore construction site, it is difficult as a project manager to personally get an impression of the progress. Reporting is done by the site manager. Therefore, this analysis clearly provides the effort, that is required related to the respective progress. While a site manager can still claim after a week “We’ll manage it”, the reasoning after another week is different if, for example, with the planned use of resources only 50 % of the progress is shown. The analysis then immediately spits out that for 100 % of the planned progress, twice the amount of resources is required. For limited application possibilities, this would mean a time overrun of 100 %.

Projects with inherently high risks

Projects with high risks, e.g. weather risks, harbor a high potential for disputes between the various parties. With the Earned Value Analysis, you stay on the ball to document and quantify construction obstacles. You can still access the data documented in this way for a long time later when the project has already been completed, but the claim managers are still processing the claims.

The analysis is sometimes not a sure-fire success, but by taking into account the following success factors, it can be an important part of project controlling:

• Transparent and comprehensible evaluation of the work packages

• Early integration of the analysis into planning

• Transparent evaluation of work progress

• Regular evaluation, analysis and evaluation

Transparent and comprehensible evaluation of the work packages

The evaluation of the work packages from the work breakdown structure should be very transparent. The underlying assumptions should be consistent and documented. The analysis will result in deviations, sometimes even systematic deviations. This is initially unproblematic as long as the evaluation has been carried out uniformly. At some point it may be necessary to re-evaluate and adapt the planning.

Early integration of the analysis into planning

When the project enters the implementation phase, the analysis should be ready so that project controlling can be performed from day one. If the system fails, the acceptance of those involved can quickly decline. It should support the processes, not slow them down.

Transparent evaluation of work progress

The daily input is the work progress and the resources used. The latter is generally easy to quantify. The progress of work is usually the basis for discussions. With back-to-back teams, it can be observed that one team anticipates the progress for work packages and the next team has to work out this progress first. For this purpose, clear evaluation rules must be established. However, it is also important here that you have already reached a discussion based on indicators.

Regular evaluation, analysis and evaluation

For the successful implementation of this analysis, it is important that the evaluations and analyses are carried out on a daily basis. This ensures that there are no gaps and no data congestion. The execution of the analysis involves work, but with the aim of promoting frontloading. For particularly critical projects, a daily evaluation of the data is necessary and deviations must be consistently investigated.

Often, the gut feeling of the project manager says “We can do it, everything will fit”. But the figures, data and facts substantiated by the Earned Value Analysis provide a real indication as to whether the use of resources is sufficient and whether the implemented measures in terms of the workflow are effective. Discussions with remote teams can be objectified on the basis of the evaluation. You create a basis for factual reviews and leave discussions à la “That will work!”. The method reduces the scope for interpretation and offers reproducible indicators.

As part of the project controlling, this analysis has already served us very well and contributed to securing deadlines and costs. Risk reserves did not have to be resorted to; instead, a complete documentation provided a good basis for claim negotiations.

Source for the earned value analysis: A Guide to the Project Management Body of Knowledge, Sixth Edition, 2017, Project Management Institute