Identification of Key Performance Indicators for Measuring the Performance of Value Management Studies in Construction
Publication: Journal of Construction Engineering and Management
Volume 137, Issue 9
Abstract
Value management (VM) is widely regarded as a useful tool for management to meet the challenges, such as limited resources and tight schedules arising in the construction industry. A rigorous measurement on the performance of VM studies is likely to improve the implementation of the VM methodology and enhance the confidence of clients about their investment in VM. The identification of key performance indicators (KPIs) is an essential first step in developing a proper performance measurement framework. This paper aims to identify the KPIs for measuring the performance of VM studies in construction. Delegates of international VM conferences hosted by SAVE International and Hong Kong Institute of Value Management during the period 2005 to 2007 were used as the target group for a questionnaire survey. The survey results identified 18 KPIs out of 47 potential performance indicators. They are divided into three groups: predicting indicators, process-related indicators, and outcome-related indicators, according to their characteristics. Three principal components were identified by using factor analysis of the KPIs, which reveals the interrelationship among the KPIs. Details on how to implement these KPIs, such as data providers, weightings, and scoring methods, are also presented.
Get full access to this article
View all available purchase options and get full access to this article.
Acknowledgments
The work described in this paper was substantially supported by grants from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project No. PolyU UNSPECIFIED5161/04E).
References
Chan, A. P. C., Scott, D., and Chan, A. P. L. (2004). “Factors affecting the success of a construction project.” J. Constr. Eng. Manage., 130(1), 153–155.
Chang, P. Y., and Chen, W. T. (2004). “Evaluating the performance of VE study using factor analysis and AHP.” Proc., 44th Annual SAVE Int. Conf.—Strategies and Techniques to Enhance Value, SAVE International, Dayton, OH.
Cheung, S. O., Chow, P. T., and Yiu, T. W. (2009). “Contingent use of negotiators’ tactics in construction dispute negotiation.” J. Constr. Eng. Manage., 135(6), 466–476.
Cheung, S. O., Yiu, T. W., and Yeung, S. F. (2006). “A study of styles and outcomes in construction dispute negotiation.” J. Constr. Eng. Manage., 132(8), 805–814.
Fong, S. W., Shen, Q. P., and Cheng, W. L. (2001). “A framework for benchmarking the value management process.” Benchmarking, 8(4), 306–316.
Kelly, J., and Male, S. (1993). Value management in design and construction: The economic management of projects, Spon, Taylor and Francis Group, London and New York.
Kelly, J., Male, S., and Graham, D. (2004). Value management of construction projects, Blackwell, Oxford, U.K.
Kulshrestha, M., and Deshpande, V. B. (2002). “Development of multiple criteria decision support system (MCDSS) for value management implementation in construction projects.” Proc., 42nd Annual SAVE Int. Conf.—Engineer Change to Elevate Value, SAVE International, Dayton, OH.
Leung, M. Y., and Liu, A. M. M. (2003). “Analysis of value and project goal specificity in value management.” Constr. Manage. Econ., 21(1), 11–19.
Lin, G. B. (2006). “Developing a performance measurement framework for value management studies in construction.” Delivering Value Today and Tomorrow Conf., Institute of Value Management, London.
Lin, G. B., and Shen, Q. P. (2006). “Critical appraisal of performance measurement in value management.” Int. J. Constr. Manage., 6(2), 1–14.
Lin, G. B., and Shen, Q. P. (2007). “Measuring the performance of value management studies in construction: A critical review.” J. Manage. Eng., 23(1), 2–9.
Lin, G. B., Shen, Q. P., and Fan, S. C. (2004). “A framework for performance measurement of value management studies in construction.” Proc., 2004 Int. Conf. on Construction and Real Estate Management, China Architecture & Building, Beijing, 307–311.
Lin, G. B., Shen, Q. P., Liu, G. W., and Fan, S. C. (2006). “Linking KPIs to CSFs in the performance measurement of VM studies.” Proc., 2006 Int. Conf. on Construction and Real Estate Management, China Architecture & Building, Beijing, 1200–1204.
Lu, W. S., Shen, L. Y., and Yam, C. H. (2008). “Critical success factors for competitiveness of contractors: China study.” J. Constr. Eng. Manage., 134(12), 972–982.
Male, S., Gronqvist, M., Kelly, J., and Bowles, G. (1996). International benchmarking of value management, Benchmarking Theme Day’s Seminar held at The Institution of Civil Engineering, London.
Male, S., Gronqvist, M., Kelly, J., Bowles, G., and Fernie, S. (1997a). “International benchmarking of value management.” SAVE Int. Conf. Proc., 1998, SAVE International, Dayton, OH, 209–217.
Male, S., Gronqvist, M., Kelly, J., Fernie, S., and Bowles, G. (1997b). “Effective management of change through value management.” Proc., Hong Kong Institute of Value Management Int. Conf., Hong Kong Institute of Value Management, Hong Kong.
Male, S., Kelly, J., Fernie, S., Gronqvist, M., and Bowles, G. (1998a). The value management benchmark: A good practice framework for clients and practitioners, Thomas Telford, London.
Male, S., Kelly, J., Fernie, S., Gronqvist, M., and Bowles, G. (1998b). The value management benchmark: Research results of an international benchmarking study, Thomas Telford, London.
Neely, A., Adams, C., and Kennerley, M. (2002). The performance prism: The scorecard for measuring and managing business success, Financial Times, Prentice Hall, London.
Norton, B. R., and McElligott, C. W. (1995). Value management in construction: A practical guide, Macmillan, London.
Palmer, A., Kelly, J., and Male, S. (1996). “Holistic appraisal of value engineering in construction in United States.” J. Constr. Eng. Manage., 122(4), 324–328.
Sanvido, V., Parfitt, K., Guveris, M., and Coyle, M. (1992). “Critical success factors for construction projects.” J. Constr. Eng. Manage., 118(1), 94–111.
SAVE International. (2007). “Value Standard and Body of Knowledge.” 〈http://www.value-eng.org/pdf_docs/monographs/vmstd.pdf〉.
SAVE International. (2009). 〈http://www.value-eng.org/〉.
Shen, Q. P., Lin, G. B., Kelly, J., and Sun, M. (2005). “Measuring the processes and outcomes of value management studies in construction.” Proc., Hong Kong Institute of Value Management 7th Int. Value Management Conf., Hong Kong Institute of Value Management, Hong Kong.
Shen, Q. P., and Liu, G. W. (2003). “Critical success factors for value management studies in construction.” J. Constr. Eng. Manage., 129(5), 485–491.
Soetanto, R., Dainty, A. R. J., Glass, J., and Price, A. D. F. (2006). “Empirical evaluation of structural frame performance criteria: Realizing the potential of hybrid concrete construction.” J. Constr. Eng. Manage., 132(3), 278–290.
Statistical Package for Social Sciences (SPSS) V12.0 [Computer software]. SPSS Inc., Chicago.
Stewart, R. (2004). “The integration of the performance measures process into value studies.” Proc., 44th Annual SAVE Int. Conf.—Strategies and Techniques to Enhance Value, SAVE International, Dayton, OH.
Webb, A. (1993a). “Value engineering: Part 1.” Eng. Manage. J., 171–175.
Webb, A. (1993b). “Value engineering: Part 2.” Eng. Manage. J., 231–235.
Zhang, X. Q. (2006). “Factor analysis of public clients’ best-value objective in public—Privately partnered infrastructure projects.” J. Constr. Eng. Manage., 132(9), 956–965.
Information & Authors
Information
Published In
Copyright
© 2011 American Society of Civil Engineers.
History
Received: Jun 10, 2008
Accepted: Jan 6, 2011
Published online: Jan 8, 2011
Published in print: Sep 1, 2011
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.