Hypothesis for an integrated IT construction project management system (Chapter 7)
The objective of this hypothesis is to propose how an information technology system can be implemented to manage information on a construction project that will speed up the process of identifying problems, in real time, through a systematic process as well as provide access to the contemporary records for evidentiary purposes. An example is then provided on how the data can actually be used to identify problems and resolve them before they develop into disputes. It is recognized that there will always be potential for disputes therefore the system must be capable of taking the dispute forward to a coercive dispute resolution process.
Towards an integrated management system
The system recognizes that the weakest link in the risk management process in construction is in the post-contract stage where risks are monitored and managed. To over come this, the approach by the Canadian Imperial Bank is used by creating an infrastructure where all processes are carried out electronically. To accommodate the prototypical nature of the construction process the system is flexible to accommodate the ever changing and evolving nature of the construction process. This is achieved by using a standard electronic form as the user interface which sends the data to a central data warehouse were the data is stored. By creating this infrastructure real time data is available to managers enabling them to identify problem areas on a day to day basis and therefore risk and change are capable of being managed as they arise. If agreement is not reached on a matter it can be taken forward to a dispute resolution process, using the same data. The risk of dispute is managed by having all the information at hand to make informed decisions.
The system adopts a holistic approach incorporating all sub-systems of the construction process as represented in Figure 7.1.
Figure 7.1 – Illustration of the system architecture using a selection of data sources commonly seen in construction
There are three main aspects of the system as follows:
Data Collection
Instead of stand alone applications being used with stand alone databases all data will be transmitted and stored in a central data warehouse. Where paper systems are being used they will be replaced by an electronic form of which the data will be transmitted to the central data warehouse. Field information will be obtained from preferably through portable handheld devices which will essentially replace paper information being manually faxed etc. However this is not essential as optical data software could be used that collects the data from paper reports. In figure 7.1 examples of data collection interfaces are provided, represented by circles.
Central Data Warehouse
All the project data is stored in the central data warehouse, represented in figure 7.1 by the square. For project data to be usable it will be structured in a way that can be usable but at the same time flexible. This is achieved by establishing primary key data within all the sub-systems. This allows for data to be linked between sub-systems for carrying out queries.
Because the construction process is prototypical and not repetitive each project will have its own distinct requirements. This can be achieved through creating an initial model that develops as the project progresses.
Because all the data is stored in a central data warehouse it will be possible to create functional rational between users and between user groups. This essentially adds controls to manage risk which will add to the efficiencies.
Management Reporting
The reporting will be carried out using business intelligence visualization software which queries the data using advanced linking and algorithmic methods. The data is then displayed using high impact visual graphics that is linked to the data. These reports are capable of being arranged in a dashboard which can be published to a server for the relevant managers to monitor and use for decision making.
The data warehouse will be capable of allowing unscheduled access, which will enable analysts to retrieve data and carry out bespoke queries and analysis. This will allow managers to make decisions systematically based on factual information that is flexibly acquired.
There is a vast range of types of reports that can be used on a construction project to manage various aspects of the process. Each project will have to be assessed and a management reporting system designed to meet the needs of the contract.
Before providing an example of how the management reports can be used it is necessary to explain these key concepts:
Key Performance Indicators
Key Performance Indicators are used to identify problems as they arise. Depending on the particular project key performance indicators can be formulated to highlight whether the required production levels are being achieved. These are all calculated using data from the project and therefore can be automatically calculated from the central data warehouse.
The standard of substantiation
It is recognized that in the real world the standards that parties adopt in substantiating valuations is often based on mutual common sense taking into consideration the circumstances of the parties. However if a dispute progresses to a formal dispute resolution process then a claim will need to be substantiated in detail to the standard required in formal dispute resolution procedures under English Law.
The standard of substantiating may have many facets however there are two general principles to bear in mind that must be incorporated into the system:
• The first principle is that he who asserts must prove the party claiming an item of cost or value will have to support it with evidence.
• The second principle is the general standard of proof in English civil law is that matters must be proved on the balance of probability as opposed to the criminal standard of beyond reasonable doubt. This principle is however in practice subject to a sliding scale where major and central parts of the issues require full substantiation while ancillary or subsidiary parts may be subject to a lesser degree of substantiation.
Example of a contract installing electrical equipment
In this example, of a simple installation of a high volume of electrical equipment over nine different locations, it is demonstrated how site installation data transmitted in real time is assimilated using business intelligence software in a format that managers can easily understand and use to make real time decisions based on facts to manage risk and change.
In this example Data Collection is achieved using a handheld mobile computer which is completed by the engineers and submitted at the end of every shift.
The key performance indicator for this example is each engineer is required to install 17 units per shift. If this quantity is not achieved then the programme will not be achieved and the contractor will essentially not be achieving the anticipated profit .
Interactive Management Report
Fig. 7.2 – Interactive management report: Scatter chart, Pie Chart and Bar Chart
Commentary on how the interactive management report can be used
From the scatter chart on the left it can be determined that the anticipated quantity of 17 units per engineer is not being achieved with the average productivity being under 12 units per engineer. From the pie chart it can be determined that just under 50% of the shifts are being affected by five categories of delays. Two of the main categories are installation at height and late isolations. From the Bar Chart it is then illustrated that five of the sites are being affected by late isolations and one site is being affected by installation at height through the colour coding. The project manager is now well equipped to notify the owner of these of the precise issues and arrange a meeting to correct the problem. At this point decisions can be made to correct the issues and because it is determinable if it is an owner or contractor responsibility action can be taken by the relevant party.
The charts are colour coded according to the category of delay. Using the above combination a manager can typically assess the issues. The shifts that are colour coded red are indicated as normal shifts where no delays occurred. It can be determined that there are a percentage of shifts that were the contractors responsibility because the key performance indicator was not achieved under normal working conditions. The project manager can then drill down further into the data to establish where the delays have occurred and the effects.
If the parties do not agree on responsibility for a particular issue then a party could make an assessment on the merits on how to progress the matter further. For example a contractor could quickly asses the impact on a particular issue and make a decision to either take mitigation measures or if he assesses that his case is strong he can make a weighted decision based on the facts to pursue an entitlement through a dispute resolution procedure.
Verification of electronic records
An important aspect of any electronic information system is to ensure the authenticity of the information when sending or receiving information or placing an order or instruction. Both parties need to know the sender of the message is the person they claim to be.
There is therefore a need to authenticate the identity of the sender to demonstrate the integrity and accuracy of the record, because it is important to know that the content of the record has not been tampered with and to prevent the person making a subsequent statement denying they made the statement.
To ensure the system achieved this it would have to comply with the Electronic Communication Act 2000 in respect of forming "electronic signature" and "individual certifying certificate" as follows:
An "electronic signature" is the incorporation of an electronic or digital method (comprising a numerical value using a known mathematical procedure associated with the private cryptographic key of the sender) to an electronic communication, which is unique to the person using it, is capable of being verified and linked to the communication in such a way that if the content of the communication is changed, the electronic signature is invalidated.
An "individual certifying certificate" means the individual certificate issued by a trusted third party (such as a certification authority), which purports to identify a natural or legal person and indicates that a public key and a private key has been issued to the natural or legal person.
Section 7 of the Electronic Communication Act 2000 makes it clear that electronic signatures, supporting certificates and the processes under which such signatures and certificates are created can be admitted as evidence in court. The Electronic Communication Act 2000 is flexible in that it does not mandate or specify particular formats or methods aiming to be neutral to the type of technology that may be used. The legislation covers all types of electronic signatures from those based on email exchanges to those based on cryptology or biometric technology.
Conclusion
Most of the respondents in the survey expressed that the construction industry would benefit from real time reporting. Two of the respondents identified that they use systems similar to the ones described. Some of the respondents thought that it would not be possible to implement a real time system due to the forever changing nature of construction and the associated costs and requirement for the system to keep up with the change. This investigation has found that the process can be achieved using standard software that has recently become available and already being used in other industries. Adopting this method means that basic principles of project management can be used effectively because the information would be available.
To implement a real time system of this nature would however require contracts to facilitate its use. For example to measure productivity in any contract the base would first have to be established. This is an area that has the potential to create difficulties that would still have to be overcome.
Towards an integrated management system
The system recognizes that the weakest link in the risk management process in construction is in the post-contract stage where risks are monitored and managed. To over come this, the approach by the Canadian Imperial Bank is used by creating an infrastructure where all processes are carried out electronically. To accommodate the prototypical nature of the construction process the system is flexible to accommodate the ever changing and evolving nature of the construction process. This is achieved by using a standard electronic form as the user interface which sends the data to a central data warehouse were the data is stored. By creating this infrastructure real time data is available to managers enabling them to identify problem areas on a day to day basis and therefore risk and change are capable of being managed as they arise. If agreement is not reached on a matter it can be taken forward to a dispute resolution process, using the same data. The risk of dispute is managed by having all the information at hand to make informed decisions.
The system adopts a holistic approach incorporating all sub-systems of the construction process as represented in Figure 7.1.
Figure 7.1 – Illustration of the system architecture using a selection of data sources commonly seen in construction
There are three main aspects of the system as follows:
Data Collection
Instead of stand alone applications being used with stand alone databases all data will be transmitted and stored in a central data warehouse. Where paper systems are being used they will be replaced by an electronic form of which the data will be transmitted to the central data warehouse. Field information will be obtained from preferably through portable handheld devices which will essentially replace paper information being manually faxed etc. However this is not essential as optical data software could be used that collects the data from paper reports. In figure 7.1 examples of data collection interfaces are provided, represented by circles.
Central Data Warehouse
All the project data is stored in the central data warehouse, represented in figure 7.1 by the square. For project data to be usable it will be structured in a way that can be usable but at the same time flexible. This is achieved by establishing primary key data within all the sub-systems. This allows for data to be linked between sub-systems for carrying out queries.
Because the construction process is prototypical and not repetitive each project will have its own distinct requirements. This can be achieved through creating an initial model that develops as the project progresses.
Because all the data is stored in a central data warehouse it will be possible to create functional rational between users and between user groups. This essentially adds controls to manage risk which will add to the efficiencies.
Management Reporting
The reporting will be carried out using business intelligence visualization software which queries the data using advanced linking and algorithmic methods. The data is then displayed using high impact visual graphics that is linked to the data. These reports are capable of being arranged in a dashboard which can be published to a server for the relevant managers to monitor and use for decision making.
The data warehouse will be capable of allowing unscheduled access, which will enable analysts to retrieve data and carry out bespoke queries and analysis. This will allow managers to make decisions systematically based on factual information that is flexibly acquired.
There is a vast range of types of reports that can be used on a construction project to manage various aspects of the process. Each project will have to be assessed and a management reporting system designed to meet the needs of the contract.
Before providing an example of how the management reports can be used it is necessary to explain these key concepts:
Key Performance Indicators
Key Performance Indicators are used to identify problems as they arise. Depending on the particular project key performance indicators can be formulated to highlight whether the required production levels are being achieved. These are all calculated using data from the project and therefore can be automatically calculated from the central data warehouse.
The standard of substantiation
It is recognized that in the real world the standards that parties adopt in substantiating valuations is often based on mutual common sense taking into consideration the circumstances of the parties. However if a dispute progresses to a formal dispute resolution process then a claim will need to be substantiated in detail to the standard required in formal dispute resolution procedures under English Law.
The standard of substantiating may have many facets however there are two general principles to bear in mind that must be incorporated into the system:
• The first principle is that he who asserts must prove the party claiming an item of cost or value will have to support it with evidence.
• The second principle is the general standard of proof in English civil law is that matters must be proved on the balance of probability as opposed to the criminal standard of beyond reasonable doubt. This principle is however in practice subject to a sliding scale where major and central parts of the issues require full substantiation while ancillary or subsidiary parts may be subject to a lesser degree of substantiation.
Example of a contract installing electrical equipment
In this example, of a simple installation of a high volume of electrical equipment over nine different locations, it is demonstrated how site installation data transmitted in real time is assimilated using business intelligence software in a format that managers can easily understand and use to make real time decisions based on facts to manage risk and change.
In this example Data Collection is achieved using a handheld mobile computer which is completed by the engineers and submitted at the end of every shift.
The key performance indicator for this example is each engineer is required to install 17 units per shift. If this quantity is not achieved then the programme will not be achieved and the contractor will essentially not be achieving the anticipated profit .
Interactive Management Report
Fig. 7.2 – Interactive management report: Scatter chart, Pie Chart and Bar Chart
Commentary on how the interactive management report can be used
From the scatter chart on the left it can be determined that the anticipated quantity of 17 units per engineer is not being achieved with the average productivity being under 12 units per engineer. From the pie chart it can be determined that just under 50% of the shifts are being affected by five categories of delays. Two of the main categories are installation at height and late isolations. From the Bar Chart it is then illustrated that five of the sites are being affected by late isolations and one site is being affected by installation at height through the colour coding. The project manager is now well equipped to notify the owner of these of the precise issues and arrange a meeting to correct the problem. At this point decisions can be made to correct the issues and because it is determinable if it is an owner or contractor responsibility action can be taken by the relevant party.
The charts are colour coded according to the category of delay. Using the above combination a manager can typically assess the issues. The shifts that are colour coded red are indicated as normal shifts where no delays occurred. It can be determined that there are a percentage of shifts that were the contractors responsibility because the key performance indicator was not achieved under normal working conditions. The project manager can then drill down further into the data to establish where the delays have occurred and the effects.
If the parties do not agree on responsibility for a particular issue then a party could make an assessment on the merits on how to progress the matter further. For example a contractor could quickly asses the impact on a particular issue and make a decision to either take mitigation measures or if he assesses that his case is strong he can make a weighted decision based on the facts to pursue an entitlement through a dispute resolution procedure.
Verification of electronic records
An important aspect of any electronic information system is to ensure the authenticity of the information when sending or receiving information or placing an order or instruction. Both parties need to know the sender of the message is the person they claim to be.
There is therefore a need to authenticate the identity of the sender to demonstrate the integrity and accuracy of the record, because it is important to know that the content of the record has not been tampered with and to prevent the person making a subsequent statement denying they made the statement.
To ensure the system achieved this it would have to comply with the Electronic Communication Act 2000 in respect of forming "electronic signature" and "individual certifying certificate" as follows:
An "electronic signature" is the incorporation of an electronic or digital method (comprising a numerical value using a known mathematical procedure associated with the private cryptographic key of the sender) to an electronic communication, which is unique to the person using it, is capable of being verified and linked to the communication in such a way that if the content of the communication is changed, the electronic signature is invalidated.
An "individual certifying certificate" means the individual certificate issued by a trusted third party (such as a certification authority), which purports to identify a natural or legal person and indicates that a public key and a private key has been issued to the natural or legal person.
Section 7 of the Electronic Communication Act 2000 makes it clear that electronic signatures, supporting certificates and the processes under which such signatures and certificates are created can be admitted as evidence in court. The Electronic Communication Act 2000 is flexible in that it does not mandate or specify particular formats or methods aiming to be neutral to the type of technology that may be used. The legislation covers all types of electronic signatures from those based on email exchanges to those based on cryptology or biometric technology.
Conclusion
Most of the respondents in the survey expressed that the construction industry would benefit from real time reporting. Two of the respondents identified that they use systems similar to the ones described. Some of the respondents thought that it would not be possible to implement a real time system due to the forever changing nature of construction and the associated costs and requirement for the system to keep up with the change. This investigation has found that the process can be achieved using standard software that has recently become available and already being used in other industries. Adopting this method means that basic principles of project management can be used effectively because the information would be available.
To implement a real time system of this nature would however require contracts to facilitate its use. For example to measure productivity in any contract the base would first have to be established. This is an area that has the potential to create difficulties that would still have to be overcome.
posted by Will at 19.10.06
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