LIFECYCLE MANAGEMENT OF INFORMATION TECHNOLOGY (IT) PROJECTS IN CONSTRUCTION

Transcription

1 LIFECYCLE MANAGEMENT OF INFORMATION TECHNOLOGY (IT) PROJECTS IN CONSTRUCTION A thesis submitted in fulfilment of the requirements for the award of the degree of Doctor of Philosophy by RODNEY ANTHONY STEWART B.Eng. (Hons1), MIEAust, J.P. from School of Engineering Faculty of Engineering and Information Technology GRIFFITH UNIVERSITY GOLD COAST CAMPUS July 2002

2 Declaration ii DECLARATION This work has not been previously submitted for a degree or diploma in any university. To the best of my knowledge and belief, the thesis contains no material previously published or written by another person except where due reference is made in the thesis itself. Rodney Anthony Stewart July 2002

3 Acknowledgements iii ACKNOWLEDGEMENTS The research on which this thesis is based was undertaken at the School of Engineering, Griffith University Gold Coast Campus, under the supervision of Senior Lecturer Dr. Sherif Mohamed. The author is greatly indebted to Dr. Mohamed for having provided this research opportunity and for his enthusiastic supervision, enlightening inspiration, continuing encouragement and invaluable technical suggestions throughout the course of this investigation. The author also appreciates the guidance given in improving his research skills and the support provided for him to attend international conferences over the course of the candidature. Special thanks are due to all the academic, technical and administrative staff at the School of Engineering, particularly the Head of School, Professor Yew-Chaye Loo; to Ron Sharpe, from CSIRO, and Michael McMahon for their assistance with the questionnaire survey; to Raul Daet, from Transfield Services, for his assistance with the strategic IT implementation case study; to Carmel Wilde for her professional editing of the thesis dissertation; and finally to all the questionnaire respondents and case study participants who made this research possible. The author also thanks Griffith University and the Australian Postgraduate Award (APA) Scholarship Scheme for providing the necessary financial support, which allowed this research to continue, unhindered. The support is gratefully acknowledged. To his partner, Lisa, the author expresses deep gratitude for her constant encouragement and continuous moral and administrative support. Last, but not least, the author is indebted to his parents, brother and sister for their understanding and encouragement, right from the very beginning. The completion of this research is but a very small reward for their efforts and great expectations.

4 List of Publications iv LIST OF PUBLICATIONS The following papers were produced to disseminate the concept and results of the work undertaken by the author during the course of this Ph.D. research study. Journal Publications 1. Stewart, R.A. and Mohamed, S. (2001) Using benchmarking to facilitate strategic IT implementation in construction organisations. Journal of Construction Research, Volume 2, Stewart, R.A. and Mohamed, S. (2001) Utilising the balanced scorecard for IT/IS performance evaluation in construction. Journal of Construction Innovation, Volume 1, Number 3, Stewart, R.A. and Mohamed, S. (2002) Balancing risk and value in IT projects selection. Journal of Building and Construction Management, Volume 7, Number 1, Stewart, R.A. Mohamed, S. and Daet, R. (2002) Strategic implementation of IT/IS projects in construction: A case study. Journal of Automation in Construction, Volume 11, Number 6, Stewart, R.A. and Mohamed, S. (2002) IT/IS projects selection using multi-criteria utility theory. Logistics Information Management, Volume 15, Number 4, Mohamed, S. and Stewart, R.A. (2003) An empirical investigation of users perceptions of web-based communication. Journal of Automation in Construction, Volume 12, Number 1, Stewart, R.A. and Mohamed, S. (2003) Evaluating the value IT adds to the process of project information management in construction. Journal of Automation in Construction, forthcoming. 8. Stewart, R.A. and Mohamed, S. (2003) IT/IS project selection: A case study from the construction industry. Journal of Engineering and Technology Management, (Under review).

5 List of Publications v Conference Publications 1. Stewart, R.A. and Mohamed, S. (2000) Adaptability of the balanced scorecard to measure the performance of information technology in construction. Proceedings of the 4 th Asia- Pacific Structural Engineering and Construction Conference (APSEC 2000), Kuala Lumpur, Malaysia, September 13-15, pp Stewart, R.A. and Mohamed, S. (2000) Linking IT performance measures to decisionmaking tiers of a construction organisation. Proceedings of the 4 th Asia-Pacific Structural Engineering and Construction Conference (APSEC 2000), Kuala Lumpur, Malaysia, September 13-15, pp Stewart, R.A. and Mohamed, S. (2000) Selecting technology projects based on an information economics approach: a step towards integrating innovation into business strategy. Proceedings of the 17 th Int. Symposium of Automation and Robotics in Construction (ISARC 2000), Taipai, Taiwan, September 18-20, pp Stewart, R.A. and Mohamed, S. (2000) Selecting information technology projects in construction: balancing risk and value. Proceedings of the Millenium Conference on Construction Project Management, Hong Kong, October, pp Mohamed, S. and Stewart, R.A. (2001) Selecting IT/IS projects in construction: A critical review of modern selection methodologies. Proceedings of the Third International Conference on Construction Project Management: From Fragmentation to Integration, Singapore, March 2001, pp Stewart, R.A. and Mohamed, S. and Daet, R. (2002) Strategic implementation of IT/IS projects in construction. Proceedings of the First International Conference on Construction in the 21 st Century (CITC2002), Challenges and Opportunities in Management and Technology, Miami, Florida, USA, April, pp

6 Synopsis vi SYNOPSIS The last twenty years has seen a tremendous change in the way companies do business. Much of this change can be attributed to the so-called information revolution. The integrated interaction between Information Technology (IT) and business processes has changed from its initial function of automating clerical tasks (e.g. payroll, inventory) to providing pertinent information for operational, managerial and executive groups within the organisation. In more recent times, IT has enabled some organisations, including those in the construction industry, to transform or re-engineer their business processes in the face of the rapidly changing business environment. As international competition continues to intensify, significant numbers of construction organisations are investing large amounts of resources into IT as they seek to gain competitive advantage. IT is increasingly being implemented for strategic reasons, so as to enable improved efficiency, better control and enhanced productivity of internal processes. The failure of realising expected IT-induced benefits has led to a growing number of senior executives to question the value of IT investments. Thus, questions like the following are typical: Are we getting our money s worth from our IT investment? Are we spending too much or too little on IT? What IT projects make the best use of our resources? How can we improve the return on our IT investments? This Ph.D. research study was inspired by the perceived lack of a structured framework for the selection, implementation and performance evaluation of IT projects in construction. The development of such a generic framework that could capture the IT project lifecycle management process, and the associated guidelines and procedures for its effective implementation, is a young field of research, still struggling to define its place within the large family of academic disciplines. Being a young branch of science, it might be argued that IT in construction lacks a solid methodological foundation. An IT project lifecycle management process is an integrated approach that provides for the continuous identification, selection, implementation, monitoring and performance evaluation of IT projects. This structured process should provide a systematic method for construction organisations to minimise risks while maximising returns on IT investments. To effectively

7 Synopsis vii employ IT in construction, the IT project lifecycle management process should have elements of three essential phases: (1) IT project(s) selection; (2) strategic IT implementation and monitoring; and (3) IT performance evaluation. However, each phase should not be viewed as a separate step. Rather, each is conducted as part of a continuous, interdependent management effort. Information gained from one phase is used to support activities in each of the other two phases. With this in mind, this research study aimed to develop an appropriate framework and associated tools for each phase of the IT project lifecycle. The developed three frameworks are detailed individually in the following paragraphs. The developed IT project(s) selection framework utilised information economics theory to encompass the full spectrum of direct and indirect costs, tangible and intangible expected benefits and the intangible risks associated with IT project proposals, considered for funding by the organisation. To incorporate the uncertainty that normally surrounds quantifying costs, benefits and risks, the framework employed a simple but powerful fuzzy logic technique to integrate all the monetary and non-monetary factors into a form that enabled the ranking of proposals. A case study was undertaken with a large international project management and development organisation to demonstrate the framework s applicability. The case study illustrated the effectiveness of the proposed approach for ranking IT project proposals. Once a portfolio of IT projects is selected for funding by the organisation, it needs to be strategically implemented and monitored over its lifecycle. A strategic IT implementation and monitoring framework was developed to enhance the effectiveness and efficiency of this phase. The framework is premised on a hybrid analysis utilising the Analytical Hierarchy Process (AHP) and SWOT analysis. A case study was undertaken to demonstrate the applicability of the proposed framework in the strategic implementation and monitoring of a Project Management Information System (PMIS) by a large Australian construction-contracting organisation. The framework application proved to be successful in helping the organisation to develop appropriate strategies for the effective and efficient implementation of the PMIS. An IT performance evaluation framework and method was then developed for the final phase of the lifecycle. This framework was the primary focus of this Ph.D. research study and was structured using the Balanced Scorecard (BSC) principles adapted to the specific requirements of the construction industry. The framework was structured using a hierarchy of IT performance perspectives, indicators and measures. Five definable perspectives were conceptually developed through analysis and synthesis of the IT business value evaluation literature. These are: operational, benefits, technology/system, strategic competitiveness and user orientation. Indicators and measures were extracted from the mainstream IT literature and construction

8 Synopsis viii management literature, as well as the emerging literature on information economics. The preliminary list of indicators was initially screened through consultation with construction professionals and conceptual cause-and-effect mapping. The screened list of project-tier indicators was further refined through questionnaire dissemination. The questionnaire was sent to 322 construction project participants from large construction-contracting and project management organisations located within Australia. The five framework perspectives were statistically validated through the principal component factor analysis with varimax rotation. Each perspective and indicator s relative weight was numerically established using the questionnaire survey results as input to the recently developed Performance Measurement Process Framework (PMPF). The reason that the performance measures were not justified through a quantitative analysis was due to their dynamic nature. Most performance measures change, and will continue to change, with new technology. The developed perspectives, indicators and measures were all compiled into a generic Construct IT BSC that can serve as a template for application at other decision-making tiers of a construction organisation. The problem of combining performance measures, with varying metrics, into commensurable units (utiles) was achieved by applying utility theory. Finally, the developed Construct IT BSC was utilised for a project-tier survey to test the interrelationship between framework indicators and perspectives. Using information collected from 82 project professionals, from large construction-contracting and project management organisations, correlation and independent sample t-tests (one-tailed) provided support for the Construct IT BSC. Specifically, findings suggest that the Construct IT BSC can be used as a tool for monitoring the IT-induced value creation process. In addition, it appears that the proposed Construct IT BSC framework and associated performance evaluation method is both flexible in design and can be modified to suit the needs of individual organisations. These characteristics make the framework continuously relevant to the dynamic nature of IT projects. In summary, the proposed IT project lifecycle management process, and its associated frameworks, provides a holistic view of IT implementation in construction and offers significant contributions to current body of knowledge on IT in construction.

9 Table of Contents ix TABLE OF CONTENTS Title Page... i Declaration... ii Acknowledgements... iii List of Publications... iv Synopsis... vi Table of Contents... ix List of Figures... xvii List of Tables... xx CHAPTER 1. Introduction General Remarks Objectives and Scope Compilation of knowledge Conceptual framework Questionnaires/interviews and analysis of results Refined framework Summary of developed frameworks Layout of Thesis Information Technology in Construction General Remarks Definition Background IT in Construction Reported Levels of IT Adoption in the Construction Industry Australia United Kingdom Republic of Ireland Hong Kong Canada Finland IT Applications and Use in the Construction Industry The Internet and the World Wide Web (WWW) Wireless technology Integrated databases Electronic tendering Videoconferencing and recording Virtual reality and simulation Cost Implications of IT Tangible costs Intangible costs Potential,Use and Benefits of IT in Industry Sectors

10 Table of Contents x Potential, use and benefits consulting engineers Potential, use and benefits principal and specialist contractors Potential, use and benefits architects Potential, use and benefits building suppliers and manufacturers Benefits, Barriers and Critical Success Factors to Change Benefits of IT implementation Barriers to successful IT implementation Critical success factors to successful IT implementation E-commerce in Construction Benefits of e-commerce in construction Barriers to e-commerce implementation in construction Emergence of e-commerce in construction Research Activities Government Departments - Australia Groups and organisations Universities Research organisations Summary IT Project Lifecycle General Remarks Overview of the IT Project Lifecycle IT Project Selection Overview of phase Persuasion (needs and comparison) Strategic IT Implementation and Monitoring Overview of phase Persuasion (needs and comparison) IT Performance Evaluation Overview of phase Persuasion (needs and comparison) Summary Critical Review of Investment Appraisal Techniques General Remarks Which Investment Appraisal Technique? Summary of Appraisal Techniques Discounted Cash Flow Methods Application: NPV calculation for investment in PWIME Advantages and disadvantages of NPV method Option Pricing Theory Application: Valuation of installed software on PWIME Advantages and disadvantages of option pricing theory Balanced Scorecard Cause-and-effect Outcome measures and performance drivers Linkage to financial measures Diversity, format and content of measures The IT balanced scorecard Application: Using the IT BSC for performance evaluation Advantages and disadvantages of the balanced scorecard

11 Table of Contents xi 4.7 Information Economics (IE) Determining the value of an IT project Application: IT project selection using IE Advantages and disadvantages of IE Analytical Hierarchy Process (AHP) Developing a framework for IT project selection in construction Application: IT project selection using AHP Advantages and disadvantages of AHP method Utility Theory Multi-Attribute Utility Theory (MAUT) Multi-attibute addititive utility function Application: IT project selection using MAUT Advantages and disadvantages of MAUT Fuzzy Logic Process (Possibility Theory) Triangular fuzzy numbers Fuzzy synthetic extent analysis Advantages and disadvantages of fuzzy logic Strengths, Weaknesses, Opportunities and Threats (SWOT) Advantages and disadvantages of SWOT The Application Portfolio Approach Aligning Appraisal Techniques with IT Project Lifecycle IT project selection Strategic IT implementation and monitoring IT performance evaluation Summary IT Project Selection General Remarks IT Project Selection Phase Forming an IRC New IT Proposals IT Planning and Analysis Screening of IT Projects Developing a Framework for Analysing and Ranking IT Projects STEP1(a): Identify Tangible Cost and Benefit Factors Select relevant IT project costs Select relevant IT project benefits STEP1(b): Identify Intangible Value and Risk Factors Select relevant value and risk criteria Select relevant value and risk sub-criteria Developing a hierarchy of intangible criteria and sub-criteria STEP2: Define Possibility Distribution for Each Factor Why possibility theory? Possibility distribution theory Define monetary (tangible) distributions Define non-monetary (intangible) distributions STEP3(a): Develop Aggregated Possibility Distribution (Monetary Factors) Vertex method Develop the resultant cost and benefit distribution Combining cost and benefit distributions STEP3(b): Develop Aggregated Possibility

12 Table of Contents xii Distribution (Non-monetary Factors) Weight selection factors Combining non-monetary possibility distributions averaging method Obtaining the resultant non-monetary possibility distribution STEP4: Create Resultant Combine Possibility Distribution STEP5: Ranking IT Projects Ranking two or more distributions - the ranking index method Selection of IT Portfolio Application Strategic IT Implementation and Monitoring Summary Strategic IT Implementation and Monitoring General Remarks Research Literature on Definition of Implementation Output Versus Expectation Need for Strategic Implementation Framework Critical Review of Implementation Models and Processes All industries Construction Developing a Strategic IT Implementation Framework for Construction Forming an IT Review Committee (RC) IT Project Selection Phase STEP 1: SWOT Factors External analysis Internal analysis STEP 2: SWOT analysis Outline for applying AHP in SWOT analysis Application Project Web Information Management Extranet (PWIME) SWOT summary STEP 3: IT Diffusion Strategy Story Telling STEP 4: Operational Strategy STEP 5: Implementation Strategy Action Plans Definition of action plans Elaboration of action plans Risk mitigation and coping strategies STEP 6: Monitoring Plan Performance measures Data collection Predictors Summary IT Performance Evaluation General Remarks Benchmarking Benchmarking IT in Construction Internal IT benchmarking Benchmarking IT at the project level

13 Table of Contents xiii External IT benchmarking Performance Measurement IT Performance Measurement in Construction Applying IT Performance Measurement at Organisational Tiers A Tiered Framework for IT Performance Measurement in Construction Organisational theory Typical construction company organisational structure Establishing the right organisational structure Matching IT and organisational structure Linking IT Performance Measures to Organisational Tiers Overview of the BSC Concept The process of building a BSC BSC case studies Applying the BSC Concept to Decision-making Tiers of a Construction Organisation Building a Tiered Construct IT BSC and Performance Evaluation Framework Construct IT BSC layout and explanation IT performance perspectives IT performance indicators IT performance measures Tiered IT performance evaluation framework Research Design Research Methodology Information required Selection of data collection methods Research instruments Selection of industry sectors Selection of industry tiers Pilot study Types of data collected and analysed Data analysis Research Tasks Task 1: Development of IT performance perspectives Task 2: Collation of IT performance indicators and measures Task 3: Screening of IT performance indicators and measures Task 4: Refinement of framework perspectives and indicators Task 5: Building the Construct IT BSC Task 6: Development of a framework for IT performance evaluation Task 7: Applying the Construct IT BSC and performance evaluation framework Summary Developing IT Performance Measurement Framework Perspectives General Remarks IT Performance Measurement Frameworks Justification for a New IT Performance Measurement Framework Developing an IT Performance Evaluation Framework for Construction

14 Table of Contents xiv 8.5 Justification for Proposed Framework Pilot Study Survey design Survey method Data analysis Applying Developed Perspectives to the BSC Concept Measuring and evaluating the operational perspective Measuring and evaluating the benefits perspective Measuring and evaluating the technology/system perspective Measuring and evaluating the strategic competitiveness perspective Measuring and evaluating the user orientation perspective Implementation Summary Developing IT Performance Indicators and Measures General Remarks Performance Measurement Terminology STEP 2: Collation of Performance Indicators and Measures STEP 3: Screening of Performance Indicators and Measures STEP 4: Refinement of IT Performance Indicators Project tier questionnaire development Project tier quantitative analysis Part A analysis: Classification of respondents Part B analysis: Perspectives and indicators Data reduction: Factor analysis Part C analysis: Performance measurement relationship matrix Results summary: Ranking perspectives and indicators Developing IT Performance Measures A critique of performance measures Improving the use of performance measures Developing IT Performance Measures Step 1: Determine IT measurement objectives Step 2: Develop IT performance measures that characterise success Step 3: Build baselines and collect data Step 4: Evaluate, interpret and report results Step 5: Review performance measures Applying IT Performance Measures Building a Construct IT BSC Applying the IT Performance Evaluation Framework Summary Method to Evaluate IT Performance Improvement at Decision-making Tiers General Remarks The Construct IT BSC IT Performance Measurement at Organisational Tiers IT Performance Evaluation Method Step 1: Develop IT performance measures Step 2: Establish weights

15 Table of Contents xv Step 3: Apply IT performance measures Step 4: Develop utility functions for each IT performance measurement Step 5: Evaluate overall IT performance improvement Summary Application and Validation General Remarks IT Project Selection Case study organisation Case study overview IT project proposal Step 1: Identify monetary and non-monetary factors Step 2: Define possibility distributions Step 3: Develop resultant aggregated possibility distribution Step 4: Combine resultant aggregated possibility distribution Step 5: Rank IT project proposals Selection of IT portfolio Strategic IT Implementation and Monitoring Case study description Step 1: SWOT factors Step 2: SWOT analysis Step 3: IT diffusion strategy story telling Step 4: Operational strategy Step 5: Implementation strategy action plans Step 6: Monitoring plan Case study summary IT Performance Evaluation Validation study overview Construct IT BSC framework Research method Data analysis and results Discussion Validation study summary Summary Conclusions, Contributions and Implications General Remarks Research Objectives and Outcomes Overview IT project selection Strategic IT implementation and monitoring IT performance evaluation Contribution to Academic Knowledge Base Implications for Research Implications for the Construction Industry Directions for Future Research Closure References... R-1

16 Table of Contents xvi Appendix A IT Performance Indicators, Objectives and Measures... A-1 1. General Remarks... A-1 2. Project Tier... A-1 3. Business Unit Tier... A-1 4. Enterprise Tier... A-2 Appendix B Screened IT Performance Indicators, Objectives and Measures... B-1 1. General Remarks... B-1 2. Project Tier... B-1 3. Business Unit Tier... B-1 4. Enterprise Tier... B-2 Appendix C Refined Project Tier IT Performance Indicators Objectives and Measures... C-1 1. Project Tier... C-1 Appendix D Project Tier Questionnaire... D-1 Appendix E Validation Study Questionnaire... E-1 Appendix F Validation Study Questionnaire Results... F-1 1. General Remarks... F-1 2. User Orientation Perspective... F-1 3. Benefits Perspective... F-7 4. Operational Perspective... F Technology/System Perspective... F Strategic Competitiveness Perspective... F-25

17 List of Figures xvii LIST OF FIGURES Figure 1.1 Research activities and expected output 1-3 Page Figure 3.1 IT project lifecycle (Stewart and Mohamed, 2000) 3-3 Figure 3.2 IT project selection process (Stewart and Mohamed, 2000) 3-5 Figure 4.1 The BSC links performance measures (Kaplan and Norton, 1992) 4-12 Figure 4.2 Four perspectives of the IT BSC (Martinsons, 1999) 4-14 Figure 4.3 IT performance measurement baseline monitoring tool 4-18 Figure 4.4 IT graphical selection tool 4-23 Figure 4.5 Framework for IT project selection 4-25 Figure 4.6 IT project selection flow chart using AHP 4-27 Figure 4.7 Normalised net benefit and costs 4-32 Figure 4.8 Characteristic utility curves (Holt, 1998) 4-33 Figure 4.9 IE-based framework for IT project selection 4-37 Figure 4.10 Pair of lotteries for Criterion (6) organisational impact 4-41 Figure 4.11 Utility curve for criterion (6) 4-42 Figure 4.12 IT application portfolio (Ward, 1990) 4-50 Figure 5.1 IT project selection phase 5-3 Figure 5.2 Strategic mix of IT projects (Ward, 1990) 5-5 Figure 5.3 IT project selection flow chart 5-9 Figure 5.4 Technology and business domain factors (adapted from Parker et 5-18 al., 1988) Figure 5.5 Framework for IT project selection (intangible factors) 5-23 Figure 5.6 Possibility theory distribution types 5-26 (a) Single value possibility distribution (b) Interval number possibility distribution (c) Triangular possibility distribution (d) Trapezoidal possibility distribution Figure 5.7 Terms of linguistic variables value and risk 5-31 (a) Terms of linguistic variable Value (b) Terms of linguistic variable Risk Figure 5.8 Applying the vertex method 5-33 Figure 5.9 Three types of resultant possibility distributions 5-36 (a) Positive NPV possibility distribution (b) Negative NPV possibility distribution (c) Positive/negative possibility distribution Figure 5.10 Resultant possibility distribution 5-37 Figure 5.11 Range of monetary possibility distributions (Project A,B & C) 5-43 (a) Range of resultant monetary possibility distributions (Projects A, B and C) (b) Normalised monetary possibility distributions (Projects A, B and C) Figure 5.12 Example: ranking index method (a) The area used in the ranking index is represented by the shaded area (b) Example: ranking index method 5-44

18 List of Figures xviii Figure 6.1 Level of influence on project outcomes (Boyd and Paulson, 1995) 6-11 Figure 6.2 Elements of an AEC information strategy (Leslie, 1996) 6-12 Figure 6.3 Cornerstones of re-engineering (Myllymaki, 1997) 6-13 Figure 6.4 Centralised information system (De Oliveira, 1999) 6-14 Figure 6.5 Matching the organisation with its environment (Toole, 1998) 6-15 Figure 6.6 Mitigation strategy model (Myllymaki, 1997) 6-16 Figure 6.7 CIC planning methodology (Jung and Gibson, 1999) 6-17 Figure 6.8 IT strategic planning framework (Pena-Mora et al., 1999) 6-18 Figure 6.9 The productivity paradox: differential rates of change across four 6-20 organisational dimensions (Dos Santos and Sussman, 2000) Figure 6.10 Strategic IT implementation and monitoring strategy (Stewart et 6-20 al., 2002) Figure 6.11 A result of SWOT analysis for the PWIME 6-29 Figure 6.12 Graphical representations of the results of pairwise comparisons of 6-31 SWOT groups and factors Figure 6.13 The strategic plan and the results 6-35 Figure 6.14 IT performance measurement focus and timing (adapted from 6-38 GAO/AIMD , 1997) Figure 6.15 Projected effects of recommendations on rates of change 6-40 Figure 7.1 IT performance baseline data collection (Stewart and Mohamed, ) Figure 7.2 Graphical representation of IT performance evaluation data 7-13 Figure 7.3 Xerox tiered information management matrix 7-15 Figure 7.4 Simplified overview of Hochtief & subsidiary company Thiess 7-17 organisational structure (Adapted from /corporate_structure/cdstruct.html) Figure 7.5 Management tiers and project participants (Stewart and Mohamed, ) Figure 7.6 IT performance measurement results chain (user orientation 7-22 perspective) Figure 7.7 Data collection measures and tools at decision-making tiers 7-22 Figure 7.8 Adapting the BSC approach to construction organisation structure 7-27 Figure 7.9 A tiered BSC example for evaluating IT performance 7-27 Figure 7.10 Construct IT BSC layout and explanation 7-29 Figure 7.11 Research design 7-32 Figure 7.12 Research tasks to develop the Construct IT BSC 7-40 Figure 8.1 Information system success model (DeLone and McLean, 1992) 8-2 Figure 8.2 Four perspectives in the IT BSC (Martinsons et al., 1999) 8-3 Figure 8.3 Management framework (Priest et al., 1995) 8-5 Figure 8.4 Faces of the prism IT business value dimensions (Cronk and 8-7 Fitzgerald, 1998) (a) Faces of the prism IT business value dimensions (b) Cross section of prism cross dimensional measures Figure 8.5 The five perspectives of the IT performance measurement 8-12 framework Figure 8.6 Applying developed perspectives to the BSC concept (Stewart and 8-19 Mohamed, 2001) Figure 8.7 Key steps to IT performance measurement in construction 8-22 Figure 9.1 Project tier cause-and-effect diagram 9-5 Figure 9.2 Data analysis procedure 9-6

19 List of Figures xix Figure 9.3 Company profile 9-9 Figure 9.4 Respondent position profile 9-10 Figure 9.5 Respondents construction experience profile 9-11 Figure 9.6 IT portfolio of respondent organisations 9-12 Figure 9.7 IT implementation period 9-13 Figure 9.8 Primary driving force to IT implementation 9-13 Figure 9.9 Five-step procedure to develop and use performance measures 9-25 Figure 9.10 GAP analysis 9-28 Figure 9.11 Measurement focus and timing at decision-making tiers (Stewart 9-29 and Mohamed, 2001) Figure 9.12 Matching performance measures to key requirements 9-30 Figure 9.13 IT performance baseline and targets 9-31 Figure 9.14 Control chart example 9-35 Figure 9.15 Project tier Construct IT BSC 9-41 Figure 10.1 Proposed Construct IT BSC with five performance perspectives 10-2 (Stewart and Mohamed, 2001) Figure 10.2 Tiered Construct IT BSC layout (Stewart and Mohamed, 2001) 10-4 Figure 10.3 Five-step IT performance evaluation methodology 10-5 Figure 10.4 Project tier framework for IT performance measurement (Stewart 10-6 and Mohamed, 2001) Figure 10.5 Pair of lotteries for measure OP1-M Figure 10.6 Utility curve for measure OP1-M Figure 11.1 Graphical representations of the results of pairwise comparisons of SWOT groups and factors (Stewart et al., 2002) Figure 11.2 Operational strategy for proposed PMIS (Stewart et al., 2002) Figure 11.3 Construct IT BSC theoretical framework Figure 11.4 Data analysis procedure Figure 11.5 User orientation perspective significant correlation overview Figure 11.6 User orientation perspective significant correlations (two-tailed) Figure 11.7 Interrelationship between perspectives and indicators Figure F.1 User orientation perspective significant correlation overview F-2 Figure F.2 User orientation perspective significant correlations (two-tailed) F-2 Figure F.3 Benefits perspective significant correlation overview F-8 Figure F.4 Benefits perspective significant correlations (two-tailed) F-8 Figure F.5 Operational perspective significant correlation overview F-14 Figure F.6 Operational perspective significant correlations (two-tailed) F-14 Figure F.7 Technology/system perspective significant correlation overview F-20 Figure F.8 Technology/system perspective significant correlations (twotailed) F-20 Figure F.9 Strategic competitiveness perspective significant correlation F-26 overview Figure F.10 Strategic competitiveness perspective significant correlations (two-tailed) F-26

20 List of Tables xx LIST OF TABLES Page Table 2.1 Percent of companies using IT by Australia Industry (ABS, 1999) 2-3 Table 2.2 Independent market places in Australia, Europe and the US 2-43 Table 4.1 Appraisal techniques and references (adapted from Irani et al., 1997) 4-5 Table 4.2 Goals and performance measures for the business value perspective 4-15 Table 4.3 Goals and performance measures for the user orientation perspective 4-15 Table 4.4 Goals and performance measures for the internal process perspective 4-16 Table 4.5 Goals and performance measures for the future readiness perspective 4-17 Table 4.6 IE scorecard for the construction PWIME (Project 1) 4-21 Table 4.7 IT project scores for a construction company using IE 4-22 Table 4.8 Pairwise comparison scale (adapted from Saaty, 1990) 4-26 Table 4.9 Value and risk pairwise comparison matrices for level Table 4.10 Value and risk pairwise comparison matrices for level Table 4.11 Value and risk assessment scale 4-29 Table 4.12 Value assessment (0 lowest risk and 10 highest risk) 4-29 Table 4.13 Risk assessment (0 lowest risk and 10 highest risk) 4-29 Table 4.14 Project 1 value analysis results 4-30 Table 4.15 Value/risk and benefit-cost analysis table 4-31 Table 4.16 Estimated IT projects cost over implementation period 4-35 Table 4.17 Weights for the main criteria of the case study 4-38 Table 4.18 Relative weights of sub-criteria for the case study 4-38 Table 4.19 Value and risk assessment scale 4-38 Table 4.20 Value criteria scores for the four IT projects 4-39 Table 4.21 Risk criteria scores for the four IT projects 4-39 Table 4.22 Project scores for criterion (6) organisational impact 4-41 Table 4.23 Utility values for the best and worst outcomes for criterion (6) 4-41 Table 4.24 Utility values for different scores for criterion (6) 4-42 Table 4.25 Utility values for the four projects as assigned by Mr Jukes 4-43 Table 4.26 Overall utility values for Mr Jukes 4-44 Table 4.27 Overall utility and ranking of IT projects 4-44 Table 4.28 Some key issues in the segments of the portfolio (Ward, 1990) 4-51 Table 5.1 IT project lifecycle cost matrix (adapted from GAO/AIMD-97-63, ) Table 5.2 Sample enterprise tier benefits 5-14 Table 5.3 Sample business unit tier benefits 5-14 Table 5.4 Sample project tier benefits 5-14 Table 5.5 Activity cost matrix for start-up stage of IT project lifecycle 5-28 Table 5.6 Annual cost matrix for each stage of the IT project lifecycle 5-28 Table 5.7 Overhead cost savings possibility distribution 5-29 Table 5.8 Annual benefits matrix for proposed PMIS 5-29 Table 5.9 Value and risk assessment scale 5-30 Table 5.10 Value factors possibility distributions for three sample IT projects 5-31 Table 5.11 Pairwise comparison scale (adapted from Saaty, 1990) 5-38 Table 5.12 Aggregated value possibility distribution for Project A 5-40 Table 5.13 Ranking of IT project proposals A, B and C 5-45

21 List of Tables xxi Table 6.1 Stages of implementation completion (adapted from Gottschalk, ) Table 6.2 Implementation predictors derived from organisational practice 6-8 Table 6.3 Priorities and consistency ratios of comparisons of the SWOT groups 6-30 and factors carried out for PWIME implementation Table 6.4 Risk factors and coping strategies: the enterprise tier 6-36 Table 8.1 Dimensions of the IT business value construct (Cronk and 8-6 Fitzgerald, 1998) Table 8.2 Comparison of reviewed frameworks 8-11 Table 8.3 Summary of questionnaire responses (Mohamed and Stewart, 2002) 8-16 Table 8.4 Varimax factor loadings for the initial five-factor solution 8-17 Table 8.5 Varimax rotated factor loadings for the five-factor solution 8-18 Table 8.6 Sample project-orientated performance indicators and measures 8-20 Table 9.1 Performance measurement terminology 9-3 Table 9.2 Classification of respondents 9-9 Table 9.3 IT performance perspective weighting 9-14 Table 9.4 Summary of IT performance indicator responses 9-15 Table 9.5 Varimax factor loadings for the initial five-factor solution 9-16 Table 9.6 Varimax rotated factor loadings for the five-factor solution 9-17 Table 9.7 Performance measurement relationship matrix 9-19 Table 9.8 Ranking perspectives 9-20 Table 9.9 Ranking indicators 9-21 Table 9.10 Other indicators suggested by respondents 9-22 Table 9.11 Performance assessment scale 9-36 Table 9.12 Example 1: Measurement description card for IT training proficiency 9-39 Table 9.13 Example 2: Measurement description card for IT training budget 9-40 Table 10.1 IT performance indicators and measures for the operational 10-7 perspective Table 10.2 Relative weight of IT performance indicators 10-8 Table 10.3 Measurement description card for measure OP1-M Table 10.4 Monthly measurement results for measure OP1-M Table 10.5 Performance assessment scale Table 10.6 Utility values for different targets for measure OP1-M Table 10.7 Hierarchy and analysis of project tier IT performance measures Table 11.1 PWIME lifecycle cost matrix 11-5 Table 11.2 Identification and definition of value factors 11-6 Table 11.3 Identification and definition of risk factors 11-7 Table 11.4 Activity cost matrix for project initiation stage of PWIME lifecycle 11-7 Table 11.5 Annual cost matrix for each stage of the PWIME lifecycle 11-7 Table 11.6 Overhead cost savings possibility distribution (Year 1) 11-8 Table 11.7 Annual benefits matrix for proposed PWIME (overheads) 11-8 Table 11.8 Annual benefits matrix for proposed PWIME (document 11-9 management) Table 11.9 Value factor possibility distributions for proposed PWIME Table Risk factor possibility distributions for proposed PWIME Table Resultant aggregated monetary (tangible) possibility distribution Table Aggregated value possibility distribution for PWIME Table Aggregated risk possibility distribution for PWIME Table IT project proposals being reviewed by ABC Table Ranking of PWIME and PMIS project proposals Table Priorities and comparisons of SWOT groups and factors 11-15

22 List of Tables xxii Table Action plan for installation and networking of PMIS (Stewart et al., ) Table Risk factors and coping strategies: PMIS project (Stewart et al., ) Table PMIS monitoring strategy (Stewart et al., 2002) Table Mean value and standard deviations for indicators Table Inter-correlations of Construct IT BSC perspectives Table Interrelationship of the operational and user orientation perspectives Table Interrelationships not or marginally supported Table A.1 Operational perspective indicators, objectives and measures A-3 Table A.2 Benefits perspective indicators, objectives and measures A-4 Table A.3 Technology/System perspective indicators, objectives and measures A-5 Table A.4 Strategic competitiveness perspective indicators, objectives and A-5 measures Table A.5 User orientation perspective indicators, objectives and measures A-6 Table A.6 Operational perspective indicators, objectives and measures A-7 Table A.7 Benefits perspective indicators, objectives and measures A-8 Table A.8 Technology/System perspective indicators, objectives and measures A-9 Table A.9 Strategic competitiveness perspective indicators, objectives and A-9 measures Table A.10 User orientation perspective indicators, objectives and measures A-10 Table A.11 Operational perspective indicators, objectives and measures A-11 Table A.12 Benefits perspective indicators, objectives and measures A-12 Table A.13 Technology/System perspective indicators, objectives and measures A-13 Table A.14 Strategic competitiveness perspective indicators, objectives and A-14 measures Table A.15 User orientation perspective indicators, objectives and measures A-15 Table B.1 Operational perspective indicators, objectives and measures B-3 Table B.2 Benefits perspective indicators, objectives and measures B-4 Table B.3 Technology/System perspective indicators, objectives and measures B-5 Table B.4 Strategic competitiveness perspective indicators, objectives and B-5 measures Table B.5 User orientation perspective indicators, objectives and measures B-6 Table B.6 Operational perspective indicators, objectives and measures B-7 Table B.7 Benefits perspective indicators, objectives and measures B-8 Table B.8 Technology/System perspective indicators, objectives and measures B-9 Table B.9 Strategic competitiveness perspective indicators, objectives and B-9 measures Table B.10 User orientation perspective indicators, objectives and measures B-10 Table B.11 Operational perspective indicators, objectives and measures B-11 Table B.12 Benefits perspective indicators, objectives and measures B-12 Table B.13 Technology/System perspective indicators, objectives and measures B-13 Table B.14 Strategic competitiveness perspective indicators, objectives and B-14 measures Table B.15 User orientation perspective indicators, objectives and measures B-14 Table C.1 Operational Perspective (OP) indicators, objectives and measures C-2 Table C.2 Benefits (BE) perspective indicators, objectives and measures C-3 Table C.3 Technology/System (TS) perspective indicators, objectives and C-3 measures Table C.4 Strategic Competitiveness (SC) perspective indicators, objectives and measures C-4

23 List of Tables xxiii Table C.5 User Orientation (UO) perspective indicators, objectives and measures C-5 Table F.1 Interrelationship of the user orientation and technology/system F-3 perspectives Table F.2 Interrelationship of the user orientation and operational perspectives F-4 Table F.3 Interrelationship of the user orientation and strategic competitiveness F-5 perspectives Table F.4 Interrelationship of the user orientation and benefits perspectives F-6 Table F.5 Interrelationship of the benefits and operational perspectives F-9 Table F.6 Interrelationship of the benefits and strategic competitiveness F-10 perspectives Table F.7 Interrelationship of the benefits and technology/system perspectives F-11 Table F.8 Interrelationship of the benefits and user orientation perspectives F-12 Table F.9 Interrelationship of the operational and benefits perspectives F-15 Table F.10 Interrelationship of the operational and strategic competitiveness perspectives F-16 Table F.11 Interrelationship of the operational and technology/system F-17 perspectives Table F.12 Interrelationship of the operational and user orientation perspectives F-18 Table F.13 Interrelationship of the technology/system and operational F-21 perspectives Table F.14 Interrelationship of the technology/system and benefits perspectives F-22 Table F.15 Interrelationship of the technology/system and strategic F-23 competitiveness perspectives Table F.16 Interrelationship of the technology/system and user orientation F-24 perspectives Table F.17 Interrelationship of the strategic competiveness and operational F-27 perspectives Table F.18 Interrelationship of the strategic competiveness and benefits perspectives F-28 Table F.19 Interrelationship of the strategic competiveness and F-29 technology/system perspectives Table F.20 Interrelationship of the strategic competiveness and user orientation perspectives F-30