Advancing capital project management

Abstract

PurposeEffective project management is critical for reducing project failures, cost overruns and schedule delays. Yet, research in this area is lacking. This study provides original research on capital project management in US state governments, with special attention to earned value management (EVM). EVM is a technique used to provide early warning indicators of performance issues and facilitate corrective action during project execution.Design/methodology/approachA multi-method design involving document review, focus groups, surveys, interviews and case studies is used to unearth primary data from statewide project management offices (PMO) responsible for overseeing large-scale information technology (IT) acquisitions. A strategic framework is developed, facilitating a descriptive analysis of management strategies.FindingsResults from 31 states indicate the vast majority have taken key initial steps in formulating a statewide strategy, such as establishing a PMO, adopting industry standards and defining guidelines for agencies. However, agencies are only required to follow guidelines issued by the statewide PMO in 14 states. EVM is currently used in 18 states, with most defining clear criteria for application and tailoring practices according to project context.Originality/valueThis study introduces the EVM concept to public budgeting research, provides a blueprint for EVM policy development and offers novel analysis of capital project management reforms and strategies.

Managing Performance for Capital Projects

“…The primary appeal of EVM for managers should be understood in terms of information quality, specifically timeliness and specificity. Simply put, without in-progress evaluation for deliverables and a granular reporting structure, the data generated for project status can be too stale and aggregated to facilitate swift adjustments (Grandage 2021). However, it is also important to note for the purposes of oversight that prescribing best practices helps ensure disciplined execution more generally and that a common set of metrics eases portfolio analysis (Christensen 1998; Grandage 2021; U.S.…”

“…EVM has a long history in the public sector, having been adopted by the U.S. Department of Defense (DoD) in the 1960s to improve project management for major acquisitions (Fleming and Koppelman 2010; Grandage 2021; Kwak and Anbari 2012). Following the DoD's adoption, the practice diffused to several U.S. federal agencies and other national governments (Abba 2000; Song 2010).…”

“…The historical record overflows with high-profile blunders that illustrate the tendency of major projects to experience benefit shortfalls, cost overruns, and schedule delays (Flyvbjerg 2017). Still, because the landscape of government acquisitions continues to grow in terms of cost, complexity, and diversity, effective project management remains a top priority for improving performance (Blair 2015; Grandage 2021; U.S. Government Accountability Office 2021). Yet, despite these well-documented challenges, academic research on public sector project management remains underdeveloped (Grandage 2021; Kassel 2016).…”

“…Overall, research indicates that EVM is an effective performance management tool, helping improve communication, provide early warning of performance issues, and facilitate corrective action (Kim, Wells and Duffey 2003; Song 2010). However, research on EVM in state and local governments has yet to receive adequate coverage (Grandage 2021). As a result, we lack specific information on the contributions, if any, of EVM to project management within this situational context and factors critical to effective implementation.…”

“…Successfully delivering IT projects has proved to be very challenging in both the private and public sector, with reports of up to 25 percent considered failures and cost overruns of 50 percent not uncommon for completed projects (Flyvbjerg 2017; Standish Group 2015). As state governments have modernized their IT infrastructure and navigated these risks, they have formed statewide Project Management Offices (PMOs) to improve project delivery for major agency and enterprise IT systems, with some using EVM as part of their performance management strategy (Grandage 2021).…”