Integration of construction risk and earned value management

Construction projects are known as one of the most challenging in the market due to their complexity and their uncertain environment. Complexity and uncertainties associated with construction projects require organizations to establish more complicated methods and tools to efficiently plan to control construction developments. Traditional earned value and risk management methodologies are not able to meet that requirement at a satisfied level. The aim of this study is to analyze risk management and earned value management processes to enhance the integrated framework between them that may help to improve accuracy in the construction projects and may provide more effective and solid decision-making process. In order to do that, the concept of the integration between project risk and earned value management has been explored based on the previously developed models and related information from the literature and well-known standards. Further, a survey has been conducted with small and medium sized construction companies in Turkey to investigate the usage of RM and EVM practices and barriers to their implications. Accordingly, the study indicate there is a common belief regarding the major issues related with the cost, time and scope overruns in the sector and some concerns about the quality problems. These problems may be solved with more efficient decision making process during the planning phase and controlling them during the execution of the projects. It was observed the contruction companies in Turkey do not possess a strong risk and earned value management culture, even if there are some companies that are aware about RM and EVM applications. This is mostly because of the lack the Client's demand for these applications and construction SME's limited resources that can be allocated for these practices. As a result, they faces with several problems because of the cost and time overruns and changes on the scope. Therefore, a decision making approach with integrating RM and EVM may provides to companies an early visibility to project performance measurements and may support a more pragmatic project planning process to avoid overruns and changes at the completion.