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Construction Industry And Data Management Construction Essay

Paper Type: Free Essay Subject: Construction
Wordcount: 5461 words Published: 1st Jan 2015

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Many issues affect the success of a project, yet there is sure proof of success based on efficient communication and cooperation and collaboration between team-members. Sending and receiving information is communication; this enables understanding of one another. Common definitions of communication given by Hoyland et al., 1953 and Ruesch and Bateson, 1961 quoted in Miller, 2004 gives that “communication is the process by which an individual transmits stimuli to modify the behavior of other individuals”. Another definition states that, “Communication does not refer to verbal, explicit and intentional transmission of messages alone. The concept of communication would include all those processes by which people influence one another”, Ruesch and Bateson, 2004.

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The theory on communication defines three key elements of communication. These three elements have to be present for communication; these are the sender, the receiver, and the presence of a message. The message must be conveyed through a medium while the receiver must interpret the received message so as to understand its meaning. The medium used is important to communication since it affects the process of decoding. Decoding the message correctly is important since it stands to give the meaning as is intended by the sender. It is important to realize at this point that everyone is different with different perceptions and interpretations of situations (Miller, 2004).

Since people have different perceptions, team members of a project have diverse ways oral and written communication; team players also listen and comprehend situations in various ways, all leading to communication problems (Koskinen, 2004). Certain obstacles and filters may have key roles in comprehending the actual message. Barriers or obstacles usually root from the existing mind-state of the person receiving the message; these barriers to correct interpretation of the message might be biasness, prejudice or emotions, it may very well be the lack of technical and educational understanding needed (Thomas et al., 1998).

Eliminating all human and technical barriers or obstacles is rather impossible in order to have effective communication, but creating formal, systemized communication set-up can much enhance project performance. This will overall minimize or almost mitigate distortions in effective communication. Good collaboration is dependant on effective communication. Communication may be necessary for collaboration but the reverse is not necessarily true; communication still takes place in absence of collaboration between team members, this means collaboration advances to realize common goals through extra-durable relationships and in presence of complete commitment of team-members (Laepple, 2005). Collaboration can be lasting if specific issues exist as part of the relation. Laepple, 2005 quotes Lorenz et al and says that collaboration constitutes mainly the presence of a common goal or objective, a joint paradigm, the existence of respect among and across all members, and of course the major element that is effective communication to be present.

In regard to construction projects, common goal or purpose would be safe and timely execution of the project within the bounds of the given budget and quality. Collaboration means nothing without purpose. Joint paradigm, though points to the methods and practices generally acceptable to all teams and team-members trying to realize common goals. Here, it is noteworthy that everyone shares different values and these values must also be widely accepted within the working teams.

It is important that collaboration exists before the rise of disputes or disagreements and problems in a project; it should, therefore be the foundational element of a project so as to avoid the afore-mentioned issues or any others that may come up (Larson, 1997). For this to be done team-building processes that conjoin the associated parties so as to give a clear picture of both the communication strategies as well as collaboration strategies and to make clear ways in which conflicts and disputes can be avoided well before they arise (Larson, 1997). One more essential factor for successful collaboration is the attitude of the management when faced by serious problem(s) (Larson, 1997). The managements’ attitude and behavior must be in conformance with the principles of collaboration, namely trust, openness and combined teamwork (Larson, 1997).

When productivity deficiencies occur, the first culprits are communication and collaboration (FMI, 2004). FMI conducts the CIPS-Construction Industry Productivity Survey which states communication and/or collaboration issues as major challenges for the improvement of levels of productivity. This paper uses Wideman’s (1991) terminologies suggesting that ‘buyer organization’ corresponds to ‘project sponsor’, and ‘seller/implementer organization’ corresponds to ‘project manager’. These terms will be synonymously used throughout the study, i.e. buyer/seller and project sponsor or manager.

Inter-firm Relationship Theories

To deal with the complicated matter of research in inter-organizational relationships it is useful to refer to present theories that clarify the dynamics governing these relationships. The introduction section of this paper summarizes the study’s element of investigation as communication existing between the project sponsor and the project manager at the time of IT project implementation where buyer-seller relationships exist. Traditional inter-firm/organizational relationship theories conferring to such analysis are namely the ‘Transaction Cost Economics Theory’ and the ‘Agency Theory’ (Williamson 1995). These theories are given as follows.

Transaction Cost Economics (TCE)

The TCE theory centers around the degree of ‘individual transaction’ that translates ‘input’ to required ‘output’, for instance the establishment of an IT-based system for the improvement of an organization’s internal efficiency. TCE roots in economics; it gives rationales on whether to ‘make’ a product or ‘buy’ it from the market. There are two situations whether either there is more control making a ‘fit for purpose’ in reducing unwanted costs associated to a product but having higher costs of management; or the other situation where prices are reduced by economies of scale as well as competing by price.

Williamson (1975) argues for the make or buy decisions; these are supported by various implications like:

• The level of specificity of an asset is a major influencing factor. It relates to the degree of the transacted object based on how explicit/unique it is. What value does it hold in terms of individual transaction and whether or not it can be redeployed for future transactions?

• The level of ambiguity that arises from

In-apt communication or deliberate in-correct and misleading signals that prevent decision-makers from discovering plans made by others involved in the business transaction.

The common indecisiveness present in human behavior.

The transaction’s frequency.

Initially, TCE was designed for recurring, routine transactions, undertaken by traditionally managed organizations both in functional as well as hierarchical set-ups. Recurring transactions do not require a specific governance structure, though in contrast transactions that are highly unique require more specialized management structures. For this very purpose TCE considers firms governance structures and not specifically production functions (Willimason, p. 387, 1985). Costs involved in these transactions are aptly called transaction costs, here:

Transaction costs are minimized by handing over transactions (each with different attributes) to governance structures (each with different capacities and different costs) (Williamson 1985, p. 18). TCE suggests that firms adjust their governance structures in order to attain lowest possible transaction costs. Resistance in physical systems corresponds to transaction costs in economic context; Transaction costs arise from complexity of buyer-seller relationship and the impracticality of developing and agreeing on contracts that are well-detailed enough to aptly form this relationship. For reducing transaction costs, the TCE theory suggests a high degree of asset specificity, and further suggests that incomplete contracts direct towards ‘make product’ decisions, while lower degree of asset specificity direct towards ‘buy product’ decisions (Adler et al. 1998).

No matter about Agency theory


The construction business relies heavily on information. The information used can generally be categorized as structured data and unstructured data (Caldas et al., 2005). Database systems are used to generate structured data; the database system uses structures and formats that are predetermined (Caldas et al., 2005). Structured data brings about standardization while improving interoperability of computational systems (Caldas et al., 2005). PMCS-the Project Management and Collaboration Systems contain different modules which use both structured and unstructured data; structured data is present in the ‘cost control module’. The PCMS users do not have much control of the system, though realistically, most documents generated by the system (for construction projects) can be classified as unstructured data based on text-documents like contracts, reports and amendment orders etc. (Froese, 2003). Although such documents are classified as unstructured data, but most PMCS that are web-based classify them as partially structured. Constructware, a web-based PMCS( Project Management Control Systems presents standard modules to create and track daily reports and change orders as well as RFIs.( Request for Information ) Through this team-members can see and edit a standard document, which allows for interoperability between different computers. Despite this, researchers disagree that it is only a reproduction of the text document on different computer systems and does not offer an actual solution to handle complex data (Maoa et al., 2006). A lot of studies have been conducted where common data models have been developed so as to regularize and form one universal methodology to handle structured as well as unstructured data within the construction industry. IFC, the Industry Foundation Class (IFC) has been developed by AII-the International Alliance for Interoperability (Froese, 2003). CAD drawings are present in AutoCAD format, these are used by widely in the construction industry; two kinds of informational documents are supported by such formats these are:

Contract Documents

Project Management Documents (Zhu et al., 2001).


Project success is impacted by external factors like the adoption and the diffusion of technology advancement in certain industries (Chan et al., 2004). Nonetheless, traditionally, the construction industry is seen as rather slow and reluctant to the adoption and implementation of new technology in comparison to other industries (Laborde & Sanvido, 1994). Some important barriers in the adoption of technology by the construction industry are explained by Haas et al. (1999). These barriers include different standards, fragmentation, the type of business cycles, and ways in which risk is avoided. The construction industry survives on low labor costs in majority of regions;

this is also a factor discouraging the invention of new technology and its adoption. Technology in-acceptance is mainly due to technological and financial risks felt by the employees who work in the construction industry (Tatum 1989). In-acceptance of technology construction companies poses a major threat to the construction industry. This is affecting productivity levels greatly and supporting the culture that is already change-resistant. A comparison of US and Korea in terms of information technology adoption is under-taken by Williams et al. (2007). These researchers reflect on how IT technologies are almost obsolete in over 150 US-based construction companies. Almost 50% or more have no usage of web conferencing or web portals. These companies have never used barcode scanning and do not have knowledge of e-learning or e-bid; similarly they have never used geographic information systems-GIS or geographic positioning systems-GPS.

An article named “Forces driving adoption of new information technologies” by Mitropoulos and Tatum written in the year 2000 aims at identifying and analyzing internal and external factors that affect technology adoption within the construction industry. Internal factors arise within the organization and external factors come from the project owner or arise from competition. They have studied eight different companies; three of those are mechanical contractors whereas two of them are general contractors. These companies are large with even larger revenues averaging over US$100M. Technologies chosen by the authors are the CAD and the EDI, Electronic Data Interchange technologies and Radio Frequency Identification( RFID cards are important requirements of warehouses so that the stores available for issue are automatically updated in project ) Mitropoulos and Tatum have defined four important triggers for adopting technology; these are:

Competitive Advantage

Process Problem

Technological Opportunity

External Requirements

Competitive advantage is improved only if new technology helps improve an he organization’s critical capability and also if competitors have not already adopted similar technology. On the other hand, process problems originate from:

(a)Added need for improved quality and also detailed drawings

(b) Existing technologies have become insufficient for design communication

(c) Growth of a company that requires better technologies in order to better supply larger-scale, complex projects demanding higher degree of detail. Opportunities in technology have been defined as improved capabilities because of the availability engineers having technology-based backgrounds, presence of complimentary technology, and affordability of up-and-coming technologies. External requirements are those that result from technology changes and are better known as client specifications or external competitor/rival pressure, and legal or regulatory enforcements.

Besides these triggers for the adoption of technology, a great change has taken place within the construction industry that has affected practices within project management (Alshawi & Ingirige, 2003). The changes that have taken place are marketplace globalization, economic forces, increased project complexity, a demand for quicker results, changing scopes of projects, changing procurement practices, and sophistication of clients (Alshawi & Ingirige, 2003). The construction industry is now heavily investing in IT in response to these internal and external factors. By average construction contractor companies are now investing some US$334,241 in information technology.


The use of IT helps reduce time-taken to perform tasks and helps perform tasks that are difficult or impossible to be done by humans (Allen et al., 2005). Though IT has contributed greatly to the success of business organizations yet there exit barriers for diffusing or adopting IT into businesses. (Becerik,2006). Construction businessmen feel lack of collaboration within the industry, lack of training, and high implementation costs are all barriers to the success of IT in this industry. On the whole, though, barriers may be classified as technical barriers, behavioral barriers, cost-related barriers, organizational barriers, and legal barriers (Bjork, 2003). The barriers include:

1. Communication and hard and soft documentation

2. Information ownership

3. Returns on investment that are indistinguishable

4. Construction site technological limitations

5. Risks, both financial and organizational learning related risks

6. Change resistance and organizational inertia

7. Law of intellectual property and concerns regarding mistrust

8. System security, system reliability and the degree of confidentiality the system offers

The construction industry is being affected in a number of ways by all these given factors lowering chances of adoption of technology to this industry; these factors are individually studied and analyzed. (Bjork, 2003).You asked for refrences here they were given at start of para

Frameworks of Knowledge transfer

Multiple studies have created frameworks to transfer knowledge, for learning and for diffusing new innovations into different areas of the construction industry (Egbu, 2005; Maqsood et al., 2007; Walker et al., 2004; Chinowsky et al., 2007; Anumba et al., 2005 Chinowsky and Carrillo, 2007;). Nonetheless, these frameworks are especially focused and set to a process lacking in consideration of their effect on project management and social relationships. An obstacle to knowledge transfer, its learning or innovations may be linked with certain characteristics of construction industry like short-term labor contracts; fragmentation of a project by functions; short-term coalitions of teams; contract arrangements; poor coordination between project partners; adversarial relationships etc. (Slaughter, 1998; DoreeandHolmen,2004; Dubois and Gadde, 2002;). Ling (2003) states four factors having vital effects on technological innovations in construction. They are:

The interest level of team-members (of the project)

Work environment

Creating task-groups

Individual capabilities of members involved with innovation

Additionally, Walker & Peasupap (2005-a/b & 2009) state that management; technology, work environment and team-members are all elemental factors affecting the diffusion of innovation, since they can adversely affect delivery costs of a project, time constraints and limits and quality of the project. These limitations, though may be resolved by integration of humans into project management (Huemann et al., 2007). Studies have been conducted to find out how knowledge management (KM) can be implemented in construction organizations. Different Knowledge Management Frameworks have been developed, some of which are discussed briefly below:

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In 2002 Whelton et al. proposed a knowledge management framework for projects; this model works on ‘soft systems methodology’ in order to assist group cognition, group learning and generate solutions. One drawback however is that this framework may prolong negotiation between stakeholders whilst trying to reach mutual agreement when faced by a problem or a situation; this may overall prolong time limitations of the project, causing it too start later than anticipated or finish later than anticipated.

A frame-work called ‘cross-sectoral learning’ has been developed by Al-Ghassani in 2002, in virtual enterprise for helping organizations set up a Knowledge Management strategy. Construction companies need to set-up KM systems in order to preserving knowledge and more specifically to integrate learning into the companies’ workings both into processes as well as practices which will in turn enhance performance and organizational competitiveness in the global market (Wetherill et al., 2002).

Bronn & Thi-Le in 2007 created an abstract model that facilitates the detection of problems related to transfer of know-how in large construction related projects. This model aims to identify knowledge break-downs while presenting the best solutions to promote learning and transferring knowledge. Nevertheless, creating social relationships between project teams can prove to be critical in promoting sharing of knowledge in collaborative environments.

A project named e-COGNOS, created by Wetherill et al. in 2002 attempts to specify and develop an infrastructure that is an open model; this infrastructure works (in collaborative environments) at KM to create, disseminate, retrieve and capture or store information. e-COGNOS can be effective if there are well-bound social relationships to promote knowledge exchange; users must be motivated and trained on the use of this frame-work.

Another example is that of the ‘knowledge transfer framework’ created by Carrillo et al. in 2006 which is used to help companies manage product-related knowledge. This framework works in three stages, though the maturity level of KM is important as to how the framework may be implemented. Also cultural issues exist when knowledge is being transferred across different territories or across national borders.

Another approach called ‘cross-organizational learning approach’ developed by Franco et al. in 2004 deals with the shortage of processes required for everyday inter-organizational assessment of construction projects so as to facilitate learning while adding value to projects. This approach allows for exchanging feedback on project performance which is useful for learning and improving performance.

In 2007 Chinowsky created a ‘learning organization maturity model’ with a built-in automated tool called ‘Learning Organization Rapid Diagnostic’ that assists in assessing and the implementation of continuous learning. Nonetheless, for implementation of the multiple characteristics of a learning organization, it can be time-consuming because of the sole reason much coordination and management is required to link together the entire organization. Overall this is an elicit support to use communication systems infrastructure for organizational learning.

The CONDOR project is explained by Vakola and Rezqui -2000. They explain how it can support in defining work practices, work processes, commonly-used techniques, tools as well as aid in supporting the technical infrastructure of construction organizations. It even comes with an evaluation tool that assists in gathering of information; it helps in organizing learnt information by distributing it so that organizational learning takes place, and the learnt knowledge can be implemented in future projects. CONDOR continuously creates knowledge, interprets it and distributes it in order to retain knowledge.

In 2007, Chinowsky and Carrillo (2007) propose how organizations shit from focusing on KM over to ‘learning organizations’ based on a ‘STEPS model’ that is a KM model. STEPS stands for Start-up-Take-off-Expansion stage-Progressive stage-Sustainability, it also has a ‘learning maturity model’ that is based on leadership, processes and organizational infrastructure, organizational communication & collaboration, education and finally culture(s).

If KM strategies are successfully initiated, organizations can successfully progress from only KM to having a learning culture. Learning alone cannot necessarily lead to improving performance (Crossan et al., 1995). Good practices in management and knowledge management have a deep correlation (Leseure and Brookes-2004). Various studies show the significance of innovation in construction industries (Egbu, 2004; Latham, 1994; Slaughter, 1998; Gann, 2000; Dubois and Gadde, 2002; Vakola and Rezqui, 2000; Kumaraswamy et al.,2004; Ling, 2003; Dulaimi et al., 2005; Eaton et al., 2006; Egan, 1998; Winch, 1998). PPP/PFI has positive outcomes for innovation (Eaton et al.-2006). Eaton further explored stimulants and barriers against innovation in PPP/PFI projects. Impediments and stimulants related to human relationships are social and organizational variables. This will help in improving PPP/PFI that can in turn affect project performance in regard of project quality, costs, and time management.

Concurrent Engineering

Concurrent engineering desing is a doctrine in management which has largely being used in the manufacturing industry while less of it has been employed in the construction engineering. The main aim of the philosophy is to reduce timelines in the activities so that the overall project time in terms of cost can be reduced For completion of these activies Concurrent engineering projects parallel and concurrent functions that are overlapped so that the delay in sequential conduct of the activites can be reduced . It is pertininet to mention that the common areas between concurrent activies between engineering production and construction industry has been highlighted by many researchers (de la Garza et al. 1994).

In construction industry the the concurrent engineering has primarily defines as ” the integration of both design , planning and construction processes ” including ” the main aim of integration is to reduce construction time and cost and to ensure through various checks that the product is meting the expectations of the consumer . “(Noble 1993).

One of the main aims of the concurrent engineering methodlogy is to identify which all activites can overlap and which cannot . Furthermore the amount twp activities can overlap in a process mormally depend upon the typr of activities . (Prasad 1996).

Concurrent Engineering and Integrated Project Development

Integrated project developemnt can be described as the evolution of the concurrent engineering into a full scale methodogical process .

Since due to the complexity and the increasing processes involved in the contruction industry of today it is very important evolve the integrated approach for the completion of the task . We will now discuss the IPD in the backdrop of concurrent engineering .

I need more information about concurrent engineering


Construction structures are becoming increasingly complex while this industry is becoming more specialized; a new approach called Integrated Project Delivery or IPD has been introduced. This approach has been developed in the U.S. for the improvement of cost and the quality of projects as well as enabling better management of project schedules compared to traditional methods. The IPD method attempts to improve the outcomes of a project by collaboration in streamlining the incentives in addition to team goals (ADTF 2006).

Though there are a number of organizations that support progression of IPD for instance AIACA Council and the AGC, and while some projects benefited from its use, yet projects using IPD are relatively few in number (Post 2007, Sive 2009). There are reasons for its slow adoption. Some reasons include fear of risk related to IPD (time, money, and innovation); other reasons include the close partnerships that IPD demands and legal frameworks required for incorporating IPD approaches. Furthermore, stakeholders of the construction industry think that new competencies, skills and KM will be needed for collaborating IPD into an organization (Auto-desk White Paper 2008). Still there is no noteworthy research that investigates the existing adoption status of IPD or reasons for its slow adoption within the industry (Sive 2009). Gathering IPD case-studies reflecting ‘best practices’ would motivate professionals unfamiliar with IPD in getting assurance of IPD benefits and how its profits play a role in both successful and unsuccessful projects. Here, this paper provides an example of a project implementing IPD for project delivery. In this paper, we define IPD and discuss BIM-Building Information Modeling in context of IPD. To make further understanding of IPD clear, a case study is discussed to see how IPD may be applied in commercial building projects. The conclusion section will give recommendations for education as well as future research projects both in the context of IPD.

Though IPD may be the industry buzz word but there exist no standard definition that is acceptable to all. Differing definitions accompanied by greatly varying approaches of different sophistication levels suggest that IPD describes considerably diverse contract arrangements as well as team processes, (Sive-2009). There are prominent similarities among IPD projects and IPD definitions. IPD is defined by various principles like the following in the context of this paper:

(1) Multi-party Agreement

(2) Parties’ Early Involvement

It is not necessary that IPD is constituted by these principles.

Multi-Party Agreement:

One contract exists for the whole project, which involves the general contractor, the project owner, and the architect, or may even involve other parties (if the contract is between more than just two parties) when IPD is used. The prime goal of IPD is maximizing collaboration and coordination throughout the entire project. The contracts are a driving force that allows goals to be attained productively without getting complicated by use of separate contracts since separate contracts can produce opposing motives among the stake-holders and team members. (Post 2007) please attach this ref in ref please

Shared Risk and Reward:

A majority of IPD contracts incorporate elements designed for encouraging teamwork while promoting project success. IPD, in contrast to traditional projects, combines the risks & rewards to reach project goals. (Scarnati, 2001) The goals may differ but are related to cost, project schedules and the quality metrics used in measuring success of a project. Associated risk examples include budget over-costs with different entity’s overheads and profits, though on the other hand if a project is below budget a team may be compensated. Risk-reward sharing can be based on value, incentive pool, innovation & outstanding performance, performance bonuses and profit sharing.

Based on value-Project teams are given incentives; bonuses that are given based on how much value is added by a member to a project.

Incentive pool-It will reserve some share of the team’s fees (that increases and decreases based on certain pre-agreed criteria) before it is divided and shared among team members;

Innovation and outstanding performance-As the name already indicates, teams are rewarded for their hard work or creativity;

Performance bonuses-These bonuses are awarded on the basis of quality

Profit sharing-Based on group performances, profits are gained collectively for the whole team/group rather than individually.

Early Involvement of All Parties:

One fundamental benefit of IPD is that it provides all parties the ability to be part of the project and be involved with the project from the start of the design phase. Collaborating from the start can easily address problems of fragmentation existing between the designing professionals and construction professionals which results in work mal-practices or cost changes during the late construction phase. (Scarnati, 2001) Although early collaboration does not need technological tools, but information technology like BIM-Building Information Modeling greatly increases efficiency of collaboration taking place during all project phases.

There do, though exist constrains and complexities in implementing IPD. New contracts are using IPD but are not tried & tested, and so, are not completely approved and understood. IPD is costly and insurance companies will not cover financial losses incurred as a result of IPD. Moreover the construction industry is accustomed to conventional leadership methods; responsibility, and opportunity; while change is not very evident. (Baiden et al., 2003)The inability to restructure procurement processes for enabling IPD is the area where a majority of agencies and formal institutions are deficient. On the other hand, IPD is correctly and successfully implemented it:

Helps in facilitating the sharing of rewards as well as risks amongst stakeholders

It may help in creating incentives that are awarded for exceptional performance

It can also minimize operations and maintenance co


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