An Evaluation of Critical Success Factors for Construction Projects using Expert Judgment

Transcription

1 An Evaluation of Critical Success Factors for Construction Projects using Expert Judgment Scientific Conference Neringa Gudienė, Laima Ramelytė, Audrius Banaitis Department of Construction Economics and Property Management Vilnius Gediminas Technical University Vilnius, Lithuania Abstract Construction is a risky business and the possibility of failure always exists, so construction companies have to consider the factors that can have a direct effect to their success in construction project performance. The purpose of this study is to identify and to rank the critical success factors of construction projects in Lithuania. A survey with 71 critical success factors was distributed among to 15 construction professionals and experts from 5 construction companies who have projects management knowledge and related experience. The data were processed by expert judgment. Based on the results ten factors including experience of project management, project value, experience of project manager, technical capabilities of project manager, experience of contractor, project size, competence of project team members, clear and realistic goals, decision making effectiveness of projects management and technical capability of project management were determined as the most important success factors for construction projects. Keywords-critical success factors; construction projects; expert judgment; Lithuania I. INTRODUCTION The construction industry is a very competitive high-risk business. Increasing uncertainties in technology, budgets and development processes create a dynamic construction industry. Construction projects are now much more complex and difficult and the construction project team faces unprecedented changes. The study of project success and critical success factors is means of understanding and thereby improving the effectiveness of construction projects. However the concept of project success remains ambiguously defined in the mind of construction professionals. There is no an industry-accepted or standardized definition of project success because the fact is that individual project teams find themselves in unique situations, implying that their definition of success will differ from that of another project team. Project success is a topic that is frequently discussed and yet rarely agreed upon. The concept of project success has remained ambiguously defined in the construction industry. Project success is almost the ultimate goal for every project [1]. Achieving success is a highly critical issue for the companies to survive in a competitive business environment. The construction industry is also an area where there is strong competition due to a large number of construction contractors [2]. Measuring a project s success is more than making sure it s completed. Traditionally, success is defined as the degree to which project goals and expectations are met [3]. It should be viewed from different perspectives of individuals and the goals related to a variety of elements, including technical, financial, education, social, and professional issues. Indeed, measuring project success is a complex task since success is intangible and can hardly be agreed upon. Such a phenomenon also exists in the construction industry where different parties are involved, including the client, the architect, the contractor, and various surveyors and engineers. Each project participant will have his or her own view of success. According to Al-Tmeemy et al. [4] project success is a strategic management concept where project efforts must be aligned with both short and long-term goals of the company. Lehtiranta et al. [5] stated that construction project success depends on the multi-firm project organizations involved working together satisfactorily. Project success, therefore, should be examined from a more holistic perspective than the traditional measures in terms of budget, schedule and specifications. The success of construction projects is a fundamental issue for most governments, users and communities. In the literature that deals with construction project success and causes of time and cost overruns in the construction industry, there is some literature that highlights the role of the contractors in project success. Construction projects and their success are closely related to contractors [6]. Project success can be achieved through the good performance of project managers in the project. Various researchers have all mentioned that human factors played an important role in determining the success of a project [7-11]. Furthermore, the importance of stakeholder management in the success of the projects was recognized by many scholars [12-14]. Performance and productivity of a project has always been an important issue in the construction industry [15-17]. There is considerable debate in project management research practice about what determines project success. While the topic has been discussed for a long period of time, an agreement has not been reached. In addition, when it comes to a definition of project success, there is no single list that is totally comprehensive. The performance of a construction project is influenced by a multitude of inter-related factors some of which are referred to in the literature as critical success factors (CSF) [18]. Such an identification of success factors could well formulate

2 effective strategies for minimizing construction conflicts and improving project performance. However, the concept of critical success factors presents a smarter way to identify certain factors which when present or absent in a project are likely to make the project successful [6]. Critical Success Factors is known as a tool for measuring performance in an organization to achieve their mission [19]. In building maintenance, CSF is becoming very important as it could identify the cause of failure as well as improving the system. The success of maintenance management initiatives depends on many factors. Zawawia et al. [19] categorized critical success factors into five primary categories: leadership, culture, structure, roles and responsibilities, system infrastructure, measurement. These five categories were based on the objective of the organization. According to the researchers, it is also essential to identify the constraint of the critical success factors. In understanding the constraints, critical success factors defense measures can be derived. Knowing the constraints will eliminate predicted work which can bring about greater risks to the company's success. Knowing critical success factors in the operation of the business can strengthen management strategy. Risk management process can be more focused and many issues will be corrected and probability of failure is greatly reduced. Every single activity within the organization will be directed towards achieving the overall success of the company [19]. The adversarial relationship between owners and construction contractors creates an environment which jeopardizes the success of the construction industry as a whole. So, the partnership between these groups is very important. Partnering is a complex, dynamic process, and attention to how the different activities and elements interact to influence project success is needed. Successful partnering reduces building costs while at the same time increasing the profit margins of participating companies [20]. Chen et al. [21] explored success variables in construction partnering. They identified 19 success variables. Research results showed that four successful factors (collaborative team culture, long-term quality perspective, consistent objectives, and resource sharing) have a significant influence on the success of construction partnering. Partnering creates both a win-win situation and more synergy in team work [22]. Alzahrani and Emsley [6] studied the impact of contractors attributes on project success from a post construction evaluation perspective and identified what critical success factors (CSFs) have greatly impact to the success of project. Authors selected 35 CSFs, which were categorized into nine groups: safety and quality; past performance; environment; management and technical aspects; resource; organization; experience; size/type of pervious projects; finance. Factors such as turnover history, quality policy and adequacy of labor and plant resources, waste disposal and size of past projects completed, and company image are the most significant factors affecting projects success [6]. Al-Tmeemy et al. [4] identified 13 critical success factors for building projects in Malaysia from the contractors perspective. These criteria included: cost, time, quality, safety, achieving scope, customer satisfaction, technical specifications, functional requirements, market share, competitive advantage, reputation, revenue and profits, and benefit to stakeholder. Pakseresht and Asgari [23] in their study identified 26 critical success factors in construction projects of Pars Garma Company. They grouped them into 6 groups. The research findings indicated that the critical success factors in construction projects have different priorities and weights. Also, considering the importance, the critical success factors are respectively: technical and economic assessment of the project required resources, experience and executive records of project manager, project strategic planning and executive experiences of contractor team about the project subject. Ribeiro et al. [24] explored success factors of Portugal construction industry. Several factors were identified which are currently considered in the evaluation of project success, as found in the literature review. The results showed that the traditional factors, often referred to as the Atkinson elements triangle (cost, time and quality), are still the most relevant for evaluating the success of a project, but others, such as customer involvement and acceptance, have gained importance in recent years [24]. Mbachu and Nkado [25] identified two groups of factors constraining successful building project implementation in South Africa. These were controllable (project characteristics, service providers influences, client organizational influences) and uncontrollable (socio-cultural issues, unforeseen circumstances, economic and global dynamics, governmental/statutory controls) factors, depending on the extent to which they could be controlled by clients and project teams. Saqib et al. [26] grouped critical success factors under seven main categories: project management factors, procurement-related factors, client-related factors, design teamrelated factors, contractor-related factors, project managerrelated factors, business and work environment-related factors. Based on an analysis of the literature that has been outlined earlier, it has become apparent that there is a plenty of factors with the potential to affect the project success. A conceptual critical success factors model based on identified comprehensive list of critical success factors of construction projects in Lithuania is presented in Fig. 1 [27, 28]. This paper aims to rank critical success factors contributing to the successful implementation of construction projects in Lithuanian construction companies based upon the respondents perceptions

3 Figure 1. Critical success factors model for construction projects [27, 28]

4 II. RESEARCH METHODOLOGY A questionnaire survey was designed by incorporating the applicable 71 factors affecting or enabling successful construction project performance. For the purposes of the study, the success factors were further classified into 7 groups: external factors, institutional factors, project related factors, project management/team members related factors, project manager related factors, client related factors, and contractor related factors. The questionnaire was divided into two parts. The first part comprised background questions about the respondents individual and organizational information. In the second part the experts were asked to rank factors groups and factors in each group according to their importance. In the survey, the proposed success factors were rated by construction professionals and experts who have project management knowledge and related experience. The questionnaire of survey was distributed either personally or via to 15 members of top and middle management in 5 construction companies. A sample of 15 practitioners received the questionnaire and 15 valid questionnaires were returned for analysis. The calculation of the evaluation factors weights is carried out in 5 steps with the use of expert judgment method [29, 30]. Step 1. An average rank is defined as: t j r k = t jk 1 = (1) r where: t jk k expert s index j evaluation (k = 1,2,,r); r number of the expert s. Step 2. The importance of the factor is defined as: or lesser degree of unanimity among the various judges or respondents. Step 4. The sum of squared deviations, S, is defined as: n r n r 1 S = t j 1 k t j k (4) n j = k = 1 j = 1 k = 1 where: t jk the rank conferred by the k expert to the j factor. Step 5. The significance of the concordance coefficient is defined as: 2 12S χ = (5) rn( n + 1) 2 χ, This value must be greater than α υ, which depends on the number of degrees of freedom and the chosen significance level, then considered the opinion of expert s agreed. Otherwise, the χ 2 2 f χ α, υ states that the unmatched expert s opinions. III. RESULTS At first the experts ranked the groups of critical success factors. A 7-point scale was adopted, where 1 represented very important and 7 not important at all. Table I shows how the seven groups of critical success factors were ranked. TABLE I. THE RESULTS OF RANKING OF CRITICAL SUCCESS FACTORS GROUPS 2 d j j = n q j = 1 d j (2) Experts Critical Success Factors Groups X1 X2 X3 X4 X5 X6 X7 E E where: n the number of evaluation factors. Step 3. Kendall's W is defined as: where: S is the sum of squared deviations. 12S W = (3) 2 3 r ( n n) If the test statistic W is 1, then all the judges or survey respondents have been unanimous, and each judge or respondent has assigned the same order to the list of objects or concerns. If W is 0, then there is no overall trend of agreement among the respondents, and their responses may be regarded as essentially random. Intermediate values of W indicate a greater E E E E E E E E E E E E E

5 Experts Sum of ranks Average rank Critical Success Factors Groups X1 X2 X3 X4 X5 X6 X ,07 5,67 3,40 1,80 3,27 5,20 3,73 Weight 0,137 0,133 0,146 0,156 0,147 0,135 0,144 Priority Among the 7 critical success factors groups affecting construction projects, the project management/team members related factors were found as the most important group with q 4 = 0.156, as can be seen in Table I. The institutional factors were found as the least important group with q 2 = The respondents agree as regards the critical success factors groups, what can be judged by values W = 0.399; χ 2 = (α = 0.01). The same calculations were done with each group of critical success factors. In the external factors group the economic environment was found as the most important factor with q 1 = The cultural and nature ecological environments were found as the least important factors with q 7 = and q 8 = The concordance coefficient is equal to 0.579, so the experts are in agreement. In the institutional factors group the most important factors was construction permits with q 1 = 0.286, the least important factor product and service certification with q 3 = The project value was the most important factors under the project related factors group with q 1 = The next two important factors were project size and clear and realistic goals. The accidents was the least important factor under this group with q 13 = The experience was the most important factor under the other four groups: project management/team related factors with q 1 = 0.098, project manager related factors with q 1 = , client related factors with q 1 = and contractor related factors with q 3 = The concordance coefficient W of each group is shown in Table II. TABLE II. THE CONCORDANCE WALUES OF EACH GROUP Critical Success Factors Groups X1 X2 X3 X4 X5 X6 X7 W Based on the experts defined importance of factors groups and factors under the groups the factors significances were calculated in the overall row. Based on the results calculated by expert method ten factors were determined as the most important factors for construction projects in Lithuania. The results are shown in Table III. TABLE III. THE TOP TEN CRITICAL SUCCESS FACTORS IDENTIFIED No. Critical Success Factors of Construction Projects 1 Experience of project management (of team) 2 Project value 3 Experience of project manager 4 Technical capabilities of project manager 5 Experience of contractor 6 Project size 7 Competence of project team members 8 Clear and realistic goals 9 Decision making effectiveness of projects management 10 Technical capability of project management IV. CONCLUSIONS There is no single answer to the question of what determines the success of construction projects. Success factors are varying depending on the country, the type of project, scope, size, complexity, using of methods, materials, projects team and other factors. This study identifies and prioritizes critical success factors for the successful implementation of construction projects in Lithuania. A survey with 71 critical success factors was distributed among to construction professionals and experts who have projects management knowledge and related experience. Due to the large number of factors the significances were determined by ranking and using expert judgment method. Among the 7 critical success factors groups affecting construction projects, the project management/team members related factors were found as the most important group. The institutional factors were found as the least important group. Based on the results ten factors including experience of project management, project value, experience of project manager, technical capabilities of project manager, experience of contractor, project size, competence of project team members, clear and realistic goals, decision making effectiveness of projects management and technical capability of project management were determined as the most important success factors for construction projects. The experience of management, manager, client and contractors leads better to plan, execute, manage and control the project to its successful completion. A further research steps will be the involvement of more experts and validation of the critical success factors model by selecting the most successful project to implement. REFERENCES [1] A. P. C. Chan, A. P. L. Chan, (2004) Key performance indicators for measuring construction success, Benchmarking: an International Journal, 2004, vol. 11, pp [2] G. Arslan, S. 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