S-Curve
S-curve can be used to monitor the cost of a construction project. The S-curve very
nearly depicts the progress profile of a construction project, which is characterized by slow
progress at the beginning and rapid progress towards the middle, followed by slow progress
again towards the end. The amounts planned to be invoiced (billed) and the actual bill amount
raised can also be monitored, through a graph (S-curve). A similar graph can also be plotted
for the amount planned to be spent vis-à-vis the amount actually spent.
Once the contracts have been awarded, it is relatively easier to estimate the ‘bill
value’ for each activity on a detailed bar chart. By analysing the nature of each activity, one
can estimate the way in which this value will be distributed on, say, a monthly basis. These
amounts will then be summed to give the total estimated monthly value, and the figure
plotted on a graphic form as shown in Figure 16.9. Now, a second curve (shown as dotted
line) can be drawn based on the work that is actually performed.
It is clear from Figure 16.9 that the amount that should have been billed as on the day of
monitoring has not been done, and that is the reason the second curve is running below the
first curve. This is an ‘under spend’ situation. Similarly the second curve is also showing a
shift towards the right. This shows an ‘overall delay’ indicating that the project is running
behind schedule. Thus, the financial value may be used as a single general measure of the
progress of a project.
The continuous curves shown here can, of course, be drawn only if it is possible to estimate
the value of the work done in detail as in case of contracts based on bill of quantities. The
project manager’s ability to obtain a single and reasonable objective measure of overall
progress is diminished where the contract payments are based on some other method. After
the bar chart has been derived from the project network, the estimated cost for different
activities is calculated on either a monthly or a weekly basis. This could be based on either
early start of activities or late start of activities. Accordingly, we will have two sets of cost.
At this point of time, let us leave the discussion of cost based on early start and late start. The
planned cost month-wise for a project is given in Column 3 of Table 16.1 and the cumulative
value is given in Column 4 of the same table. As can be seen, the project is planned for 12
months duration, from January 2007 to December 2007. These planned or estimated costs
have been arrived at by estimating labour, material, plant and equipment, and subcontractor
costs—also known as direct cost for all the activities. Certain proportions of total indirect
cost for the project are added as well. In a very unlikely situation, the work will be executed
exactly as per the plan. In most of the situations, though, the work will consume either more
than the estimated duration or lessthan the estimated duration. For our example, consider the
situation in which the project is estimated to take more than the originally estimated duration.
The completion is now scheduled at the end of March 2008. The revised monthly cost is
shown in Column 5 of Table 16.1. Notice that total estimated cost is still the same, which is
equal to the earlier value (refer to Column 6). It is interesting to note that the actual cost
incurred for a particular activity will have very less likelihood of exactly matching the
estimated cost. For this example, consider the actual cost month-wise as given in Column 7
of Table 16.1. The cumulative cost now stands
at ` 335 lakh as given in Column 8 of the same table.
The cumulative cost figures given by columns 4, 6 and 8 have been drawn against
time
and presented in Figure 16.10. It can be observed that the project is behind schedule and over
budget.
Terminologies of Earned Value Method
Some of the commonly used terminologies in ‘earned value’ are discussed below with
the help of Figure 16.13.
Budgeted Cost for Work Scheduled (BCWS)
This is defined as the budget or plan for all work packages planned to be completed. The
BCWS curve is derived from the work breakdown structure (WBS), the project budget and
the project master schedule. The cost of each work package is calculated period to period,
and the cumulative cost of work packages is shown based on the planned completion dates
shown in the master schedule.