Improving Project Estimates at Completion through Progress-Based Performance Factors

Abstract

From a managerial perspective, project success hinges on estimates at completion as they allow tailoring response actions to cost and schedule overruns. While the literature is moving towards sophisticated approaches, standard methodologies, such as Earned-Value Management (EVM) and Earned Schedule (ES), are barely implemented in certain contexts. Therefore, it is necessary to improve performance forecasting without increasing its difficulty. The objective of this study was twofold. First, to guide modeling and implementing project progress within cost and to schedule Performance Factors (PFs). Second, to test several PFs utilized within EVM and ES formulae to forecast project cost and duration at completion. Progress indicators dynamically adjust the evaluation approach, shifting from neutral to conservative as the project progresses, either physically or temporally. This study compared the performance of the progress-based PFs against EVM and ES standard, combined, and average-based PFs on a dataset of 65 real construction projects, in both cost and duration forecasting. The results show that progress-based PFs provide more accurate, precise, and timely forecasts than other PFs. This study allows practitioners to select one or more of the proposed PFs, or even to develop one, following the guidelines provided, to reflect best their assumptions about the future course of project performance.