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Cost Management in Projects Based on Earned Value Management System

Elmifard, Massoud | 2010

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 42458 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Shadrokh, Shahram
  7. Abstract:
  8. Successful Cost Management in projects has a key role in projects’ final success. Earned Value Management methodology (EVM) as a known management tool especially for cost control and cost management, provides for effective planning, controlling, evaluation and corrective actions in the projects through integration of scope, cost and time. Existing budgeting and cost control structures in local projects based mainly upon manufacturing companies’ models has continuously proved inefficient. The current effort has intended to find an appropriate solution based on EVM for cost management in Iranian Offshore Engineering and Construction Company (IOEC). Since September 2008 a planned activity started for studying and customizing the methodology inside the company. First with a close cooperation between planning and accounting departments it was agreed the methodology get incorporated in the newly designed accounting system. Later in the summer of 2009 the plan stopped due to some problems. Again during September and October 2009 cost management requirements was reviewed and restructured considering related departments’ viewpoints and finally a model was designed and delivered to company’s consultant for software development. The proposed system being an independent program in essence, also could effectively connect to company’s accounting system for actual cost records. At the moment and after an intense cooperation between company and its consultant the program is ready for data testing. In the meantime, customizing methodology should also be done through company’s culture and executive procedures. Achieving a consensus and developing a program are considered as first steps and further efforts are required for establishment of the new procedures and the enhancement of the system efficiency
  9. Keywords:
  10. Cost Management ; Earned Value ; Budgeting ; Cost Control ; Control Accounts ; Cost Elements

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