Information Technology Planning Framework for Large-Scale Projects

New information technology developments continue to have a significant impact on large-scale architectural∕engineering∕construction (A∕E∕C) projects. However, the issue of whether A∕E∕C organizations are receiving adequate returns from their information technology (IT) investments remains an important managerial concern. Earlier work on financial models has concentrated on firm-wide strategies for maximizing the return of investments. Traditional financial models for measuring the value of information technology investments typically work well for static business strategies and single business scenarios. These models are inappropriate for large-scale A∕E∕C projects, which typically have multiple firms participating over a fixed project life cycle and proportionately splitting the cumulative benefits accrued over the project life cycle after their involvement on the project. To resolve these issues, the paper proposes a strategic planning framework based on IT diffusion for maximizing the value of investments in strategic capabilities. The essential steps in the strategic planning framework include environmental scan, internal scrutiny, IT diffusion analysis, and IT investment modeling. To demonstrate the framework and an integrated approach to IT investment planning, the paper presents a case study based on a large-scale A∕E∕C project.     

Information Technology Planning Framework for Japanese General Contractors

Developments in information technology (IT) continue to have a significant impact on the architectural/engineering/construction (A/E/C) industry. However, the issue of whether A/E/C organizations are receiving adequate returns from their IT investments remains an important managerial concern. Recently, Pe?a-Mora, Vadhavkar, Perkins, and Weber introduced a strategic IT planning framework for construction projects that includes four steps: environmental scan, internal scrutiny, IT diffusion analysis, and IT investment modeling. It analyzes the external and internal IT conditions of a project/firm, identifies the diffusion phase of IT in the project/firm, and finally evaluates the effects of IT investments on the project/firm. Although this framework was originally intended to plan future IT investments, we assume that the framework can also be used to evaluate ongoing or past IT investments in projects/firms. Following this idea, this paper presents an application of the Pe?a-Mora et al. framework to an ongoing IT project in Kajima Corporation, one of the largest Japanese general contractors. Kajima is currently developing an IT system called LINCS (Linkage of Information for a New Construction System). This synthetic information network system has been designed to share building data among design and construction stages and streamline design/build activities. By using the framework proposed in this paper, we analyzed how LINCS is justified in terms of its strategic and operational value for Kajima and its construction projects.     

Cost and Schedule Impacts of Information Management on EPC Process

As with most industries operating in a worldwide business environment, engineering and construction companies have a need to quantify the business impact of information management strategies and the associated investment in information technology. The prevailing assumption that corporate investment in information technology will immediately result in more efficient business operations and inevitably improve the standard measures of business performance is now highly suspect in many U.S. industries. It is not uncommon for companies to be dissatisfied with their information technology investments, and to be frustrated over their inability to objectively quantify the anticipated process benefits. These issues raise two important questions: (1) how can companies objectively measure the potential benefit of information management investments?; and (2) what information management strategies can be successful in construction engineering? This paper summarizes a research project designed to specifically answer these two questions. A methodology is provided to objectively predict the project schedule and cost impacts of process changes that may result from strategic investment. The methodology is then used to identify the potential impact of three proposed information management strategies on the construction engineering process should the strategies by implemented successfully. The research concluded that substantial cost and schedule reductions result from improving internal information exchange and integrating project-based information across organizational boundaries.     

Valuing Flexibility in Architecture, Engineering, and Construction Information Technology Investments

When investing in information technology (IT) applications, construction managers implicitly account for the value of adding future applications to the original investment as the business and technical environment changes. A real option model links uncertainty to the value of an underlying traded asset, providing an objective measure of this managerial flexibility. A case study that investigated the value of options to extend a general contractor’s software platform showed that it is possible to construct a real option model which measures the value of this flexibility, since the major risk (the architect’s adoption rate) is external to the investing organization. In another case study, a contractor evaluated the value of the pilot project in view of the information it is expected to generate. Since the risks are internal, a decision analysis model is used instead of a binary option model. The results show that it is possible to quantify the value of managerial flexibility for IT investments in the architecture, engineering, and construction industry, but that the proper method to use is contingent on the nature of the investment project.     

Fuzzy Intellectual Capital Index for Construction Firms

Construction firms are now operating in a new era. Gaining and sustaining competitive advantage in this era primarily depends on effective and efficient management of knowledge assets. This paper proposes a performance evaluation model called fuzzy intellectual capital index (FICI) that can guide construction business executives to effectively and efficiently manage their knowledge assets. FICI incorporates an intellectual capital performance measurement model with fuzzy set theory to adequately handle imprecision, vagueness, and uncertainty that prevail in this process. FICI uses the fuzzy-weighted average algorithm to compute the intellectual capital performance of architectural/engineering/construction (A/E/C) firms. It is an internal reporting model that can guide executives of A/E/C firms to evaluate their firm’s ability to achieve their strategic objectives and to pinpoint their firm’s strengths and weaknesses in order to neutralize threats and to exploit opportunities presented by today’s construction business environment. A real-world case study is presented to illustrate the implementation and utility of the proposed model. Implications for practitioners and directions for future research are discussed.     

Valuation of the Economic Impact of the Initial Allocation of Tradable Emission Permits in Air Pollution Control

One of the key concerns about applying emission permits systems in air pollution control is the initial allocation of entitlements. In this paper, a model that captures the interaction between strategic firms and a permit-allocating authority to assess social-welfare implications of the initial allocation regimes of tradable emission permits is introduced. In particular, a three-period model is formulated for studying how the exercise of market power by oligopolistic firms affects the pollution control technology investments and, in this way, the valuation of different initial allocation proposals. The analysis shows that a proactive allocation of initial entitlements may improve social welfare with respect to a distribution that ignores the interactions between the initial allocation of emission permits and the firms’ strategic response in pollution control technology investment. The results are illustrated in the context of a sulfur dioxide emission permits system for the thermal electricity generation industry in Chile.     

Managing, Processing, and Communicating Information: What A/E/C/ Organizations Should Know

Global competition and advances in information technology (IT) are placing new demands on the management techniques used on architectural, engineering, and construction (A/E/C) projects. There are opportunities as well as challenges. The revolution under way in the fields of data sharing and transmission, information processing, and telecommunication technology is opening up new possibilities in the A/E/C industry for effectively meeting these market demands. The dynamic nature of construction processes, the interdependence of various participating entities, and the need for teamwork, flexibility, and a high degree of coordination suggest IT can be profitably employed for effective project management in the A/E/C industry. The distinctive features of A/E/C projects make the task of project management particularly appropriate for applications of IT tools.     

Strategic Management Practices in Turkish Construction Firms

This paper presents a study that aims to define the present position of Turkish construction companies in terms of strategic management. It is based on a survey measuring strengths and weaknesses in the “strategic management” practices of Turkish construction companies, and thus reveals potential opportunities and threats in a generalized manner. The results highlight the current strategic management practice of construction firms for designing their own future. Toward this aim, a detailed questionnaire was administered to 52 construction companies. The culture of companies and their perceptions of strategic management were shown to have serious shortcomings. However, specialization on different project types through joint venture companies established by their partners was found to be a major strength of many companies. These companies also pointed out the developing and unstable nature of both the political and economic structure of Turkey as their most significant threat. This disadvantage has inclined many firms to choose investment in the private sector as a response.     

Intertemporal Planning of Transmission Expansions in Restructured Electricity Markets

In the new environmental era, electricity markets change rapidly, requiring dynamic strategic responses from market agents and regulators. In this paper, we study the intertemporal dimension of the network planner decision process. In particular, we formulate a dynamic model of transmission investments and use this model to compare the behavior of a network planner when considering and when ignoring the dynamic nature of transmission investments. This paper’s analysis focuses on the situation faced by some hubs with growing demand which meet their demand with power generated by distant sources subject to uncertainty. This is the case of a large city, which demand is satisfied by hydro or wind power supplied from sources located far away. For this kind of systems (typified as a simple two-node network that satisfies certain properties), we characterize the structure of a socially efficient transmission investment policy. It is shown that, in such a network, an optimal open-loop transmission investment policy has a multiperiod (s,S) structure. The results are illustrated with a numerical example.     

Component-Based Framework for Implementing Integrated Architectural/Engineering/Construction Project Systems

Current practices and integration trends in the architectural/engineering/construction (A/E/C) industry are increasing the demands for the implementation and deployment of integrated project systems. Much of the research throughout the last decade was driven by the need to develop integrated project systems and standard industry-wide data models to support their development. This paper presents a multitier component-based framework that aims to facilitate the implementation of modular and distributed integrated project systems that would support multidisciplinary project processes throughout the project life cycle. The framework addresses the specific requirements of A/E/C projects, and highlights the required functionality and approach to develop integrated project systems. The framework defines a three-tier architecture: Applications tier, common domain-services tier, and project data-repository tier. The applications tier includes a set of function-specific software tools that interact with the domain-services-tier components via a set of adapters. Adapters map the applications’ internal proprietary-data models to and from a standard integrated data model. The domain-services-tier components implement a number of generic services, such as data management, transactions management, document management, and workflow management. The data-repository tier represents a centralized shared storage of all relevant project information. The paper also discusses the implementation of a prototype software system that demonstrates the use of the framework’s reusable components and the industry foundation classes data model in typical building projects.     

Risk-Based Maintenance Planning of Cross-Country Pipelines

The oil and gas industry represents a significant source of income for many countries in the world. The industry considers cross-country pipelines, which transport petrochemical products, to be one of their major investments. Hence, there is a need to sustain, preserve, and prolong the life of this investment through good management practices. This paper presents a rational and systematic method for maintenance management of these pipelines. It is a risk-based approach that uses an analytical hierarchy process model to determine the probability of pipeline failure and the expected value approach to determine the expected costs of failure. The method was applied on nine operating cross-country pipelines transporting different petrochemical products. The method is helpful in prioritizing pipelines for annual maintenance planning and in ranking causes of failure by severity of impact.     

Outlook bleak for technology investment in Europe

Although there appears to be no shortage of capital available for investment in European industry as a whole, investment in the technology sector is falling sharply as risk-averse venture capital refinances current investments or looks for safer havens, says the European Commission…     

Strategic risk management in innovative metallurgical investment

Recommendations are made regarding risk reduction when investing in intellectual property. The low level of investment by metallurgical enterprises in intellectual property is explained. Methods of logical research, analysis, synthesis, and planning are employed. Approaches to strategic risk management in innovative metallurgical investment are outlined. The preconditions for innovation in metallurgical development worldwide are discussed, and corresponding innovative development strategies are formulated. Methods of risk reduction are formulated, and practical examples of investments in intellectual property that might be more attractive to metallurgical enterprises are presented.     

Knowledge-Assisted Retrieval of Online Product Information in Architectural/Engineering/Construction

With a better understanding about the product market, industry practitioners can make more informed decisions for product specification, selection, and procurement. However, current approaches that support Architectural/Engineering/Construction (A/E/C) information acquisition do not provide a comprehensive market scan. While the Internet provides an ever-growing resource for product information, existing approaches have limited capabilities to make use of this virtual market. Therefore, the writers have developed a knowledge-assisted approach to specifically address the potential of the virtual market—help retrieve A/E/C product information, particularly information about different manufacturers, from the Internet. The paper introduces the building blocks of the developed approach, which includes domain knowledge utilization, information retrieval (IR) techniques, and strategies that incorporate domain knowledge into knowledge-supported IR approaches. Specifically, domain knowledge represented in the form of a thesaurus was used with query expansion strategies under the framework of an adaptation of the extended IR Boolean model. It was concluded from the prototype validation that domain knowledge can be extremely helpful when acquiring A/E/C product information from online resources using the developed approach.     

Risk-Based Framework for Safety Investment in Construction Organizations

The costs of construction injuries can have a substantial impact on the financial success of construction organizations and increase the overall costs of construction up to 15%. Following the Occupational Safety and Health Act of 1970, construction firms began to implement a variety of management techniques to reduce the frequency of injuries. Although these strategies decrease the cost of injuries, they consume time and other significant resources. Thus, it is imperative for construction organizations to objectively evaluate the cost-benefit of investments in injury prevention through formal and robust processes. This paper presents a risk-based framework that can be used to evaluate the incremental return on investment of a series of investments in highly effective injury prevention strategies. The framework was developed using foundational risk quantification and analysis techniques and is illustrated using a hypothetical case study that is based on archival data published by United States government agencies. The conclusion of this study is that the optimal investment strategy can be identified through a formal analysis and that optimization depends on the frequency and cost of injuries, the sequence in which the specific injury prevention techniques are implemented, the risk mitigated by each strategy, and the organization’s attitude toward acceptable risk.     

Management of Strategies for Strategic Metals in India: Exotic and Steels

Strategic metals and materials, including steels, are crucial to technological and economic advancement of countries. Restricted and sometimes non availability of such strategic materials, to be employed especially in strategic industries/sectors, compels a nation to evolve strategies to combat such situation. India is unfortunately not so comfortably placed in terms of availability of strategic metals/minerals, as compared to our neighbour China, and would require deployment of scientific management of strategies/policies to be pursued in future. Geographical mapping of scarce deposits followed by their economic exploitation, close government to government level interactions, pursuit of synergistic research and development (R&D) programmes through collaborations, recycling etc. has to be a part of the overall strategic policy shift in future. Apart from being metals, steels do acquire strategic importance, especially when employed in defence, energy, space and other emerging technology areas. Development of high end assets, through careful manipulation of microstructure, such as in nano structured steels, can assist the country in the path of self reliance. There is a pressing need for the development of technologies of futuristic grades, like, cold rolled grain oriented steel for power, low density steels for automobiles, Defence Metallurgical Research Laboratory (DMR 1700) grade for defence purposes etc., within the country. For such strategic steels, indigenous and intense collaborative R&D work, with government support, can be highly beneficial and successful.     

Educating Civil Engineering Professionals of Tomorrow

Engineering education is currently facing unprecedented challenges and opportunities. Engineering institutions are being called upon to educate the architectural, engineering, and construction (A/E/C) professionals of tomorrow by complementing their traditional engineering education with the transfusion of information technology and process automation concepts through the necessary reorganization of classes and academic curricula. This paper presents a framework for an interdisciplinary course sequence in civil engineering, project management, and information technology centered on the concepts of fully integrated and automated project processes (FIAPP). The described sequence enables students to benefit pedagogically from working in truly multidisciplinary teams, to enrich their educational experience by bringing real world projects to academic settings, and to teach them fundamental principles in integration and automation of project processes highlighting the value of such integrated project management systems (information management, planning, design, construction management, procurement, operations, and maintenance). Furthermore, the course sequence addresses deficiencies in current one-dimensional educational curricula and needs expressed by educators, students, and industry professionals. The paper presents experiences and knowledge gained from the aforementioned academic sequence on FIAPP and on the utilization of three-dimensional computer models and associated databases in the management of A/E/C processes.     

Strengths, Weaknesses, Opportunities, and Threats for Architectural, Engineering, and Construction Firms: Case Study of Vietnam

After Vietnam became a member of the World Trade Organization, Vietnamese architectural, engineering, and construction (A/E/C) firms face competition from not only their domestic competitors but also from foreign A/E/C firms. As most Vietnamese firms are used to operating under a protected setting, they may face difficulties competing in the globalized environment. This study undertakes a strengths, weaknesses, opportunities, and threats (SWOT) analysis of Vietnamese A/E/C firms, investigates how they respond to opportunities and threats, and recommends how foreign A/E/C firms operating in Vietnam could respond. Using semistructured interview questions, face-to-face interviews were conducted with Vietnamese and foreign A/E/C firms. The SWOT analysis reveals that Vietnamese A/E/C firms are lagging behind foreign firms in financial capacity, experience in complex projects, knowledge in advanced design and construction technology, and management ability. Industry practitioners from outside Vietnam who are contemplating entering the Vietnamese market can leverage on Vietnamese firms’ strengths by forming joint ventures with strong and reputable private Vietnamese firms. To improve their competitive advantage, it is recommended that foreign A/E/C firms offer superior products and services and familiarize themselves with local culture and regulations. They should be mindful of corruption and set up surveillance systems to curb wasteful spending.     

Success/Failure Factors and Performance Measures of Web-Based Construction Project Management Systems: Professionals’ Viewpoint

This paper presents the results of an empirical study conducted to refine the writers’ previous findings on potential factors that may influence performance of commercial Web-based project management systems (WPMSs) and potential measures that might be used to assess performance of such systems. Data used in this study were obtained from 39 professionals who had practical experience with WPMSs in construction projects. The results of the study confirm 42 factors that can potentially affect performance of WPMSs and 36 measures that can be used to evaluate such performance. These 42 factors are categorized into four distinct groups: characteristics of the project, the project team, the service provider, and the specific WPMS system used in the project. The 36 measures reflect performance of WPMSs in six different perspectives: strategic, schedule/time, cost, quality, risk, and communication. Findings presented in this paper can be used by researchers as a starting point for future research in the area of WPMS implementation and performance evaluation and may be used by practitioners in the industry as a useful guide to increase the likelihood of a successful WPMS adoption.     

Sample Average Approximation Technique for Flexible Network Design Problem

Finding an optimal investment strategy to use scarce resources efficiently is challenging, since the transportation network parameters such as demand, capacity, and travel cost are uncertain. Sequencing investments over time can give flexibility to the planner so as to change, delay, or even abandon the future investment based on system realization. This paper presents a stochastic mathematical program with equilibrium constraints (STOCH-MPEC) formulation for a multistage network design problem, flexible network design problem (FNDP), accounting for demand stochasticity and demand elasticity. STOCH-MPEC problems can be computationally intractable, if the number of scenarios is large and/or the study network is large-scale. To reduce the associated complexity of FNDP, we develop a sample average approximate method (SAA) to efficiently solve the flexible network design problem. We implement the SAA on a test network and compare the performance of SAA with different sample sizes. We show that SAA can produce solutions that are close to the true solutions with considerably fewer scenarios and hence can be a viable computational technique for the stochastic network design problem.