Identification of Key Performance Indicators for Measuring the Performance of Value Management Studies in Construction

Value management (VM) is widely regarded as a useful tool for management to meet the challenges, such as limited resources and tight schedules arising in the construction industry. A rigorous measurement on the performance of VM studies is likely to improve the implementation of the VM methodology and enhance the confidence of clients about their investment in VM. The identification of key performance indicators (KPIs) is an essential first step in developing a proper performance measurement framework. This paper aims to identify the KPIs for measuring the performance of VM studies in construction. Delegates of international VM conferences hosted by SAVE International and Hong Kong Institute of Value Management during the period 2005 to 2007 were used as the target group for a questionnaire survey. The survey results identified 18 KPIs out of 47 potential performance indicators. They are divided into three groups: predicting indicators, process-related indicators, and outcome-related indicators, according to their characteristics. Three principal components were identified by using factor analysis of the KPIs, which reveals the interrelationship among the KPIs. Details on how to implement these KPIs, such as data providers, weightings, and scoring methods, are also presented.     

Performance Measurement in Construction

Performance measurement has been subject to a considerable amount of research and attention over the past 15 years. The inadequacy of traditional financially based performance measurement systems and the introduction of nonfinancial measures have been the triggers for much of this research. The purpose of this paper is to review the main performance measurement frameworks and their application by U.K. construction firms and to identify gaps in knowledge and practice that suggest future research. The contemporary performance measurement frameworks are reviewed, including the Balanced Scorecard and the European Foundation for Quality Management Excellence Model. The status of performance in the U.K. construction industry is discussed, in addition to project/operational-level performance measurement and the linkage between performance measurement and strategic management. Gaps in knowledge and practice are overviewed both in general and for the construction industry in specific, thus suggesting future research.     

Legal Aspects of Information and Communication Technologies Implementation in the Turkish Construction Industry: Applicability of eLEGAL Framework

With increasing awareness of gains and importance of the strategic use of information and communication technologies (ICTs), the implementation rate of ICTs in the construction sector is increasing. However, these technologies have not been covered by legal and contractual practices. The industry needs to implement application frameworks and legal restructuring of the existing related laws and regulations to use ICT in a legal and contractually valid environment. The EU-funded eLEGAL project, which defined a legal framework for ICT uptake in construction, is selected as a model project to address legal and contractual issues regarding ICT use in the Turkish construction industry. The applicability of this project’s results are discussed by using real cases and defining the barriers, opportunities, methods, and tools to use ICT in a legally admissible manner in the Turkish construction industry.     

Comparable Performance Measurement System for Construction Companies

The construction industry has mainly relied on financially focused performance measurements, and studies on performance measurement systems (PMSs) have been carried out at the project level. However, recently, the demand for performance evaluation and management at the company level has increased. A few previous efforts have aimed to develop a conceptual framework for company performance, but there have been few follow-up studies. From this perspective, we have developed an implementation model and practical methodology to measure and compare the performance of construction companies. First, our thorough qualitative and quantitative analysis was used to develop a set of indicators for performance measurement, and an analysis of the relative weightings of the indicators was carried out. Second, we calculated the performance score of construction companies using a study of 34 Korean construction companies. Finally, we carried out a performance evaluation and system analysis using the calculated performance scores and identified practical issues for the implementation of our PMS. Using the results of our analytical processes identified in this work, further research is suggested.     

Benchmarking Framework to Measure Extent of ICT Adoption for Building Project Management

This paper discusses a component of the research study conducted to provide construction organizations with a generic benchmarking framework to assess their extent of information communication technology (ICT) adoption for building project management processes. It defines benchmarking and discusses objectives of the required benchmarking framework and development of the framework. The study focused on ICT adoption by small and medium enterprises (SMEs) in the construction industry and with respect to SMEs it is important to understand processes, their indicators, and measures in the local context. Structure of the suggested benchmarking framework has been derived after extensive literature survey and a questionnaire survey conducted in the Indian construction industry. The suggested benchmarking process is an iterative process divided into four stages. It can be implemented at organization and industry levels for rating the construction organizations for ICT adoption and performance measurement. The framework has a generic structure and can be generalized and applied for other countries with due considerations.     

Construction Contractors' Claim Process Framework

The management of construction claims is the greatest challenge that is facing contractors in today's vacillating business environment. Construction projects are becoming increasingly susceptible to a variety of factors that give rise to time extension and cost recovery. Although the construction business environment has moved toward partnering arrangements in recent years, the number of contractual difficulties continue to rise. Thus, the construction industry needs to develop methodologies for construction claim management that should overcome their current problems. While some practitioners have been using some kind of a procedure for claim management process framework measuring tool, a written exposition of such an instrument is not widely available in the literature. This paper presents the principles that underly construction claim process and gives a generic framework that aims at facilitating measurement of construction claim process as one of the strategies for improving construction business processes. It also presents a survey of Malawian construction contractors' performance on the construction claim process framework. The results show a low awareness of such a construction claim process-measuring instrument.     

Identifying and Assessing Influence Factors on Improving Waste Management Performance for Building Construction Projects

Environmental sustainability has become one of the key drivers for continuous growth in the construction industry. Many project practitioners face challenging circumstances in finding an effective way to prevent pollution and minimize wastes by making the best use of the increasingly scarce natural resources. However, most of these efforts are focused on planning and/or design strategies; therefore, they fail to thoroughly cover the environmental issues based on the construction execution level. Further, there is a lack of quantitative measurement system and management-level guidance. To overcome these limitations, this paper proposes a new methodology that assists project managers to assess the performance level of a project in terms of waste management practice. This study is based on a two-pronged approach. One is the identification of the waste management influence factors that play an important role in decreasing waste and increasing recycled materials on construction sites. The other is the development of an assessment tool to measure the level of waste management performance for a particular project. As a result of this work, 59 factors were identified and an assessment tool was developed based on quantification of these factors. The tool has been proved to effectively measure waste management performance throughout four real-case validity tests. From the industry perspective, this paper contributes to establishing the environmentally sustainable production systems by providing the project stakeholders with an established set of influence factors and with a diagnosis tool for measuring their current performance. Additionally, project owners can use the output of the tool, especially the total index score, as a measure to benchmark the level of waste management for continuous improvement.     

Considering Prework on Industrial Projects

Prefabrication, preassembly, modularization, and off-site fabrication, collectively termed as prework have become more viable with recent advances in design and information technologies. These construction methods offer a substantial opportunity to improve project performance when circumstances merit. Successful implementation of these methods on a particular project requires systematic analysis and early decision making based on specific factors of the project. This paper identifies those factors influencing decisions on the use of prework, and current industry practices for evaluating the applicability of prework on industrial projects. It then presents a decision framework to assist industry practitioners with evaluating the applicability of prework on their project, and describes a computerized tool to aid project teams in the decision-making process. The developed framework and tool are useful and effective in the decision-making process, and easy to use, as validated by practitioners in the industry.     

Construction of composite scales for risk assessment in epidemiology: an application to ectopic pregnancy

Composite scoring systems that combine information contained in a number of risk factors are being used increasingly in clinical practice, planning, and health risk appraisal. The authors propose a methodological framework for the construction and validation of a composite measurement scale to assess the risk, considered as a continuous phenomenon, of developing a particular disease or outcome. This framework integrates several statistical methods, especially those concerning model fitting, coefficient rounding, and validation strategy. It also uses psychometric methods, addressing important measurement properties such as measurement level, content and construct validity, and reliability of the constructed scale. The proposed framework is illustrated by application to the construction of a composite scale for measurement of the risk of ectopic pregnancy.     

Empirical Investigation of Construction Contractors' Organizational Learning

Conceptual frameworks dominate organizational learning literature with limited empirical assessments. This raises several questions about the validity and applicability of the various conceptual frameworks for how managers can build organizational learning capabilities. As such, lessons from the conceptual frameworks of organizational learning for addressing performance improvement that might have been used by construction contractors have been limited. This paper presents a quantitative analysis of organizational learning by construction contractors. The principles that underlie organizational learning and the factors that promote double-loop learning as a strategy for improving construction contractors’ business processes are presented. The paper has also established the learning orientations and focus of the surveyed construction contractors to determine their organizational learning dimensions as well as the factors that induced their double-loop learning, as rich lessons for organizations in the construction industry.     

Using Group Decision Support System to Support Value Management Workshops

A group decision support system (GDSS) is an interactive computer-based information system that combines the capabilities of communication technologies, database technologies, computer technologies, and decision technologies to support the identification, analysis, formulation, evaluation, and solution of semistructured or unstructured problems by a group in a user-friendly computing environment. As there is a strong demand for improvements to the practice of value management (VM), research has been conducted to design a GDSS prototype system, named the interactive value management system (IVMS), to explore its potential application in VM workshops and to investigate the effect of the application. The paper begins with an introduction to the problems of implementing VM in the Hong Kong construction industry and then proceeds to an illustration of the features of the proposed system, which has been developed in the research. Two validation studies designed to test the support of the proposed system are described and the results discussed. Findings from this research indicate that IVMS is supportive in overcoming the problems and difficulties in VM workshops.     

Application Framework for Development of Simulation Tools

Development of specialized construction simulation tools is a time-consuming and complex operation. This has hindered the effective and wide use of simulation in the construction industry. An object-oriented application framework is a promising software engineering principle, which can help in overcoming this obstacle. Application frameworks encapsulate reusable code as well as common design patterns for a specific class of applications so that development of new tools is greatly simplified. This paper describes this new principle and applies it to the development of a construction simulation object library. A case study performed to compare the efforts between framework- and nonframework-based simulation tool development revealed that productivity can be dramatically improved.     

Paving the Way to the Vision of Digital Construction: A Strategic Roadmap

The paper provides a synthesis of the construction industry needs and requirements in relation to the adoption and use of information and communication technologies (ICT). This is based, on the one hand, on existing research and technology development initiatives commissioned at a national and European level, and, on the other, on a wide consultation with construction industry key players across Europe. A framework, used as a basis for capturing industry requirements, and formulating an ICT vision, has been defined. Five priority areas have been identified with the potential to solve the ICT related problems of the construction industry, namely: knowledge management, legal and contractual aspects management, quality and performance management, total lifecycle management, and human aspects management. The ICT vision, enabled by addressing these priority areas, has been formulated on a consensus basis, and a detailed roadmap has been developed providing a pragmatic implementation of the proposed vision.     

Informatization Index for the Construction Industry

It is normally recognized that information systems (IS) in the construction industry have not been sufficiently used in the era of information. However, so far no serious comprehensive effort has been made to measure the degree of informatization at the industry level. In order to address this problem, in this paper we propose an informatization assessment methodology for the construction industry. An informatization index for the construction industry (IICI) is developed based on specifics of the construction industry. A survey using IICI was conducted among general contractors in Korea, and the results are analyzed in terms of the measure of assessment, IS phases, construction business functions, and size of the firm. It is found that the proposed methodology can provide meaningful indicators that can be used in quantitative comparative assessment from many different perspectives. Details and implications of the case study are briefly presented.     

Comparative Study of Idea Generation between Traditional Value Management Workshops and GDSS-Supported Workshops

Value management (VM) has been widely used to meet challenges arising from the construction industry. However, it has also encountered some problems such as passive participation in VM workshops and a lack of time and information to complete all tasks in the workshops. A group decision support system (GDSS), entitled interactive value management system (IVMS), has been developed by the writers to overcome these problems. This paper starts with an introduction to GDSS and a critical review of technologies used in the process of idea generation in VM workshops. This is followed by findings of a laboratory experiment designed to compare the productivity of traditional brainstorming and brainstorming with IVMS support in VM workshops. The results of the experiment showed that IVMS has a positive influence on idea generation in VM workshops. Finally, the implications of the study and directions for future research are discussed.     

Distinctions between short- and long-term human growth studies

It is known what the aim is in a complete long-term growth study; the final height is the outcome measure, although the annual height velocity values provide additional information. Strictly, short-term growth studies are also defined in terms of minimum length of observation, i.e. one month, as well as the type of measurement errors to be considered. The poor correlation between short- and long-term growth velocity values has led to the conclusion that the short-term study cannot be interpreted in long-term perspectives, and vice versa. There is a need to debate the way in which results of short-term studies should be interpreted. This is especially important when short-term growth is taken as the outcome measure in a controlled study. Our proposal is that such studies must include information about the growth achieved for a period after the treatment has ended in order to describe possible compensatory growth. Without weighing in some long-term consequences, we may incorrectly document short-term growth as a positive or negative effect of a certain treatment.     

Utility-Function Model for Engineering Performance Assessment

Engineering and design activities constitute a critical link in a project’s life cycle. Thus, an efficient project control system requires an instrument to measure and assess engineering performance among different projects. In conventional industry practices, the measurement of engineering performance is usually tied to the production of design documents during the detailed design phase of the project. Realizing the far-reaching impacts of engineering activities, researchers in the past have investigated other comprehensive measures of engineering performance that address the entire project life cycle. As part of a study for the Construction Industry Institute, this particular research employs a multiple attribute utility function method for the collective assessment of engineering performance in construction projects. The paper begins with a summary of previous studies in the area of engineering performance measurement and assessment. Afterwards, the concept of engineering performance is thoroughly explained. The paper then reviews the background and basic theories of using utility functions in assessing engineering performance, along with an illustrative example of the functionality of this approach. The paper goes on to show the development of the utility function model for the industrial construction sector through expert opinion and real project data. The use of the model is further illustrated in the assessment of total and relative engineering performance. Lastly, conclusions of this study are drawn and potential future work is pointed out.     

Delivering Best Value in Highways Major Maintenance Schemes: Case Study

The Construction Management Framework (CMF) is a contract established by the Highways Agency in the United Kingdom, where collaborative working is used within a framework setting to deliver the best value in highways major renewals and improvements schemes. This research aims to establish the effectiveness of the CMF in achieving this aim. It aims to define best value as it is understood collectively by the participants in the framework, and evaluate the performance measurement used in terms of its relevance and suitability to deliver the best value. The research also looks at perceptions of the performance of the CMF by those companies included in the framework, and the benefits and disadvantages of using this type of arrangement in highway work. Data collected from the client were compared to that given by the contractors, supply chain, and construction managers of the CMF; results showed a perception by those involved in the framework that construction management is suited to the type of work it is currently used for, and there is potential for similar CMFs to be used elsewhere in the construction industry. However, the research also found that there is a need to improve the performance measures so that value is properly reflected in the goals of the CMF; and the presentation of evidence that demonstrates the benefits that can be gained using this procurement route.     

Cost and Schedule Monitoring of Industrial Building Projects: Case Study

Performance measurement is a helpful tool for taking corrective actions and controlling a project as far as this enables accurate time and cost forecasts during the first stages of the construction effort when the management team still has opportunities to make adjustments. This paper overcomes the dilemma of practicability and predictability of traditional estimates at completion based on early progress measurement by presenting the empirical results from the construction project of an industrial facility. The case may be a reference practice for assessing time and cost performance measurement of any building, whose layout can be reasonably partitioned into repeatable portions. In such circumstances, an effectively-managed traditional earned value method and appropriate metrics for computing performance provide project managers with accurate forecasts as useful tools for successful project management and control.     

Critical Success Factors for Value Management Studies in Construction

Value management (VM) studies often face pressure caused by limited time and resources. The identification of key factors for value management success enables appropriate allocation of the limited time and resources in order to achieve better output. Most of the related past work only identified critical success factors for value management studies in general. This paper seeks to distinguish these factors according to their degrees of importance in relation to success. A questionnaire survey was conducted to gather views from experts with experience in value management practice. The findings of the survey reveal the relative importance of the nominated success factors. Two factors that had not been highlighted by previous research are identified as having a significant influence on the success of VM studies. In order to explore the underlying construction among the identified critical success factors (CSFs), factor analysis was adopted to investigate the cluster of the relationship. The results indicate that the success of VM studies requires a combined effort from all parties involved.