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.     

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.     

How to Evaluate and Invest in Emerging A/E/C Technologies under Uncertainty

Many emerging architectural/engineering/construction (A/E/C) technology investments are of strategic importance and may create future growth opportunities. Therefore, from the strategic perspective, management needs a better method that can quantify the strategic value of technology investment and suggest optimal investment strategies when the future is uncertain. This paper presents a quantitative valuation method based on modern option pricing theory for evaluating major investments in emerging A/E/C technologies. This framework considers specifically the technology investment risk and embedded managerial options. It further aligns the investment evaluation process with the financial market. The analysis may help A/E/C firms more accurately evaluate investments in emerging technologies, such as information technology and automation, and make strategic investment decisions under uncertainty.     

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.     

Impact of Government and Corporate Strategy on the Performance of Technology Projects in Road Construction

In this study, we focus on road construction and analyze technology development projects. Based on the business strategy literature and literature on technology policy, we test the relative importance of a firm’s strategies and government as a buyer and champion. Our empirical findings stress the value of government championing behavior. Our results show that in road construction, championing behavior is more important than public technology procurement for project performance. The results even suggest that government championship is more important than a firm’s strategic orientation.     

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.     

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.     

Understanding and Managing Three-Dimensional/ Four-Dimensional Model Implementations at the Project Team Level

This paper introduces an extant, theoretical, social-psychological model that explains the sense-making processes of project managers confronted with a new technology to improve our understanding of project-based innovation processes. The model represents the interlinked processes through which project managers decide to implement new technologies on their projects according to the outcomes of these sense-making processes. The paper validates the model against observations gathered in four case studies of technology implementation on construction projects. Doing so, it assesses the general usefulness of the model to explain the success of technology implementation dynamics in project teams. The paper also derives a number of management suggestions from the model: for example, project managers should focus squarely on the immediate benefits of the technology in improving work processes on the project instead of focusing on long-term strategic firm or industry benefits.     

Relationship between Automation and Integration of Construction Information Systems and Labor Productivity

Information technology (IT) has been used to increase automation and integration of information systems on construction projects for over two decades. However, evidence that overall costs have been reduced or project performance has been improved with IT in construction is limited and mostly focused on application specific studies. A comprehensive understanding of the relationship between IT and project performance helps industry practitioners better understand the likely outcomes of implementation of IT application and likewise benefits researchers in improving the effectiveness in their IT development efforts. An opportunity to examine new evidence exists with the emergence of the Construction Industry Institute’s Benchmarking and Metrics database on construction productivity and practices. This article presents an analysis of that data to determine if there is a relationship between labor productivity and level of IT implementation and integration. Data from industrial construction projects are used to measure the relationships between the automation and integration of construction information systems with productivity. Using the independent sample t-test, the relationship was examined between jobsite productivity across four trades (concrete, structural steel, electrical, and piping) and the automation and integration of various work functions on the sampled projects. The results showed that construction labor productivity was positively related to the use of automation and integration on the sampled projects.     

Firm Performance and Information Technology Utilization in the Construction Industry

This paper, which is written to both researchers and practitioners, examines the impact of information technology (IT) on construction firm performance. Based on data collected from 74 construction firms, regression analysis is used to test the relationship between performance and IT. Analysis provides empirical evidence that IT is positively associated with firm performance, schedule performance, and cost performance. Firm performance is a composite score of several metrics of performance: schedule performance, cost performance, customer satisfaction, safety performance, and profit. The regression analysis shows that for every 1?unit increase in IT utilization, there is an increase of about 2, 5, and 3% in firm performance, schedule performance, and cost performance, respectively. No relationship is found between IT use and customer satisfaction, safety performance, and profitability.     

Portfolio Cash Assessment Using Fuzzy Systems Theory

Gaps between cash outflows and inflows throughout the life cycle of construction projects can create extended periods of low cash availability for a construction contractor, jeopardizing the financial stability of the business. A number of researchers have therefore attempted to model cash availability at a project level. However, at a firm level, financial stability is more thoroughly examined as a function of the cash flows related to multiple projects. This paper proposes a methodology on the basis of fuzzy systems theory to forecast cash requirements of a portfolio of projects for a construction firm, taking into account the effect of changing portfolio composition on portfolio cash-flow risk. Portfolio cash-flow risk is calculated from a variance matrix created by using covariance among cash flows of pairs of projects. Expert opinions of a group of highway construction contractors regarding project selection, project risk assessment and cash control were collected to create a fuzzy proportional derivative (PD) model that predicts portfolio risk for a construction firm. The model was assessed by the same group of contractors for overall logic (if/then rule base), appropriateness of cash-flow calculations (moving weights of cost categories), and practicality through application on a hypothetical test case. The paper concludes that a fuzzy proportional derivative model can be an effective tool to establish trends in cash-flow availability and risk across a portfolio of construction projects.     

Web-Centric Framework for Secure and Legally Binding Electronic Transactions in Large-Scale A∕E∕C Projects

Typical architecture∕engineering∕construction (A∕E∕C) projects are technically, socially, and economically complex in terms of planning, management, and execution. In order to conduct day-to-day operations within the project (allocating funds and resources), the organizations involved in large-scale A∕E∕C projects participate in contractual transactions. Currently, these transactions are primarily conducted in the form of paper-based contracts, but there is a need to automate them, leveraging the advancements in information technology. Due to the legal weight of these contracts, electronic transactions need to be as secure and binding as paper-based transactions; the absence of a framework to achieve this has prevented large-scale automation, in spite of the presence of a host of web-based project management services. In this paper, we address the security concerns in conducting legally binding electronic transactions in large-scale A∕E∕C projects by developing a framework for conducting secure and legally binding electronic transactions. We also discuss the issues related to the implementation of such a framework at the decade-long $13.6 billion Central Artery∕Third Harbor Tunnel Project in Boston, Massachusetts.     

Management-Driven Integration

The fragmentation of the architecture∕engineering∕construction (A∕E∕C) industry creates increased demand for coordination and integration of project participants. This paper provides practitioners with an increased understanding of the importance of integration for project and company performance, and the integration mechanisms and barriers. The paper first provides a review of the literature on organizational theory, construction, and manufacturing, and identifies integration mechanisms and potential benefits. Then, the paper presents empirical evidence regarding the integration benefits that managers in construction firms identify, the mechanisms they use, and the reasons that prevent them from utilizing integration mechanisms. Finally, the paper identifies four managerial barriers to integration: need for front-end investments, difficulty to measure and distribute the benefits, reduced ability to utilize integration mechanisms across projects, and lack of skills and organizational culture that promote integration.     

Strategic-Operational Construction Management: Hybrid System Dynamics and Discrete Event Approach

A significant number of large-scale civil infrastructure projects experience cost overruns and schedule delays. To minimize these disastrous consequences, management actions need to be carefully examined at both the strategic and operational levels, as their effectiveness is mainly dependent on how well strategic perspectives and operational details of a project are balanced. However, current construction project management approaches have treated the strategic and operational issues separately, and consequently introduced a potential conflict between strategic and operational analyses. To address this issue, a hybrid simulation model is presented in this paper. This hybrid model combines system dynamics and discrete event simulation which have mainly been utilized to analyze the strategic and operational issues in isolation, respectively. As an application example, a nontypical repetitive earthmoving process is selected and simulated. The simulation results demonstrate that a systematic integration of strategic perspective and operational details is helpful to enhance the process performance by enabling construction managers to identify potential process improvement areas that traditional approaches may miss. Based on the simulation results, it is concluded that the proposed hybrid simulation model has great potential to support both the strategic and operational aspects of construction project management and to ultimately help increase project performance.     

Impact of Change Orders on Small Labor-Intensive Projects

In today’s construction, small projects can be just as important if not more important than the larger projects. However, small projects are usually fast track projects, which often involve overlapping design and construction time. Subsequent modifications may be required for the sections that are already under construction. These disruptions to the ongoing project are labeled as change orders. The impact due to changes has been described as the adverse effect upon the unchanged work due to changes in the contract. For this study, 34 projects were selected to develop a statistical model that estimates the amount of labor efficiency lost due to change orders for small projects. The variables in the final model are percent design related changes, percent owner initiated changes, the ratio of actual peak labor to estimated peak labor, the ratio of actual project duration to estimated project duration, and project manager’s percent time on the project. The results of this paper are of value to owners, electrical and mechanical contractors, and construction managers. The model quantifies the impact of change orders by introducing the most important variables that bring the largest disruptions.     

Integrated Project Delivery Case Study: Guidelines for Drafting Partnering Contract

This paper presents a case study through which a multinational contracting firm aimed to introduce integrated project delivery through strategic partnering into its industry operations. The study reports on a research carried out by the author on behalf of the firm to set out series of principles and guidelines to consider when drafting a standard partnering contract whereby the owner, contractor, suppliers, and manufacturers collaboratively work together under the same terms and conditions. A partnering contract would never, on its own, change the culture and environment of the construction process and thus, strategic partnering should be promoted not only at project specific activities but at all organizational activities. Based on this project, the paper presents a list of ten managerial and contractual issues to promote strategic partnering. The author hopes that the results of this case study would foster legal professionals toward drafting a modern partnering contract, which should help in developing a more effective and efficient contracting environment.     

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.     

Modeling Weather-Sensitive Construction Activity Using Simulation

This paper proposes a framework for simulating weather-sensitive construction projects that are executed under extreme weather conditions. It applies the framework steps to enable simulating and planning pipeline construction activities under severe cold weather conditions. The uncertainties caused by weather, such as extreme cold, heat, wind, or precipitation, can significantly affect a project’s schedule and produce significant deviations from the baseline schedule. The proposed framework structures a project in the way an engineer would approach it, setting out a breakdown of work activities to quantify weather effects and account for their impact on the project baseline. The proposed weather-sensitive construction simulation framework is employed to determine the effects of weather on the construction process of high-density polyethylene (HDPE) pipe installation. The relevant simulation findings are reported to clarify the impact of extreme weather events on construction projects and to assist in project planning and decision support.     

Design, Development, and Deployment of a Rapid Universal Safety and Health System for Construction

Rapid construction projects and processes will become increasingly important as customers demand better project management performance and globally, as countries plan for and respond to the aftermath of natural and/or unnatural disasters. For use in expedited projects (as well as traditional projects), a rapid universal safety and health system (RUSH) was designed, developed, deployed, and evaluated. For its inaugural application, the RUSH was applied to a 106-hour construction project. Results from an initial application included a safe build in approximately 5?days without recordable incidents. More importantly, lessons were learned by a multidisciplinary team of researchers who observed safety 24/5 for the life of the project. Lessons learned and recommendations for future research are provided as a result of this experience.     

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.