An evaluation of the implementation of an enterprise resource planning (ERP) system for effective performance of construction projects in South Africa

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(1)COPYRIGHT AND CITATION CONSIDERATIONS FOR THIS THESIS/ DISSERTATION. o Attribution — You must give appropriate credit, provide a link to the license, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. o NonCommercial — You may not use the material for commercial purposes.. o ShareAlike — If you remix, transform, or build upon the material, you must distribute your contributions under the same license as the original.. How to cite this thesis Surname, Initial(s). (2012) Title of the thesis or dissertation. PhD. (Chemistry)/ M.Sc. (Physics)/ M.A. (Philosophy)/M.Com. (Finance) etc. [Unpublished]: University of Johannesburg. Retrieved from: https://ujcontent.uj.ac.za/vital/access/manager/Index?site_name=Research%20Output (Accessed: Date)..

(2) AN EVALUATION OF THE IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM FOR EFFECTIVE PERFORMANCE OF CONSTRUCTION PROJECTS IN SOUTH AFRICA by MPHUMI MCCOY MATHEGU A DISSERTATION submitted in fulfilment of the requirements for the degree. MAGISTER TECHNOLOGIAE in CONSTRUCTION MANAGEMENT in the FACULTY OF ENGINEERING AND THE BUILT ENVIRONMENT at the UNIVERSITY OF JOHANNESBURG. SUPERVISOR: PROF. C.O. AIGBAVBOA.

(3) 2016 AN EVALUATION OF THE IMPLEMENTATION OF AN ENTERPRISE RESOURCE PLANNING (ERP) SYSTEM FOR EFFECTIVE PERFORMANCE OF CONSTRUCTION PROJECTS IN SOUTH AFRICA. MPHUMI MCCOY MATHEGU. SUPERVISOR: PROF. C.O AIGBAVBOA. A DISSERTATION submitted in partial fulfillment of the award of the degree Magister Technologiae in Construction Management in the Faculty of Engineering and the Built Environment, Department of Construction Management and Quantity Surveying at the University of Johannesburg, Republic of South Africa.. JOHANNESBURG, DECEMBER 2016.

(4) DECLARATION. I, MATHEGU MPHUMI MCCOY, do hereby declare that this dissertation is the result of my own investigation and research, except to the extent indicated in the references and by comments included in the body of the report and that it has not been presented elsewhere for a similar purpose. It was submitted to the University of Johannesburg (Department of Quantity Surveying and Construction Management), as a requirement to obtain a MAGISTER TECHNOLOGIAE degree in Construction Management.. ________________________. _____________________. Signature. Date. University of Johannesburg Doornfontein. i.

(5) ACKNOWLEDGEMENTS First and foremost I would like to expression my gratitude to the Almighty God. I am forever grateful for the ability to visualise, plan, and implement anything I put my mind to through the power of dominion that He has vested in me. Furthermore, my expressions of gratitude are directed to God once more for His omnipresent Holy Spirit which protected and guided me all of my life, giving me strength and wisdom which brought me this far. No man is an island, entire of itself. Each man is a piece of the continent, a part of the main. With that expression I wish to share my true thankfulness and gratitude to the following individuals for their assistance, direction and contribution to this research study:  My supervisor, a person to whom I look up to, Prof. Clinton Aigbavboa, for his expert guidance throughout the course of this study, and for platforms he makes available for me to extract wisdom from him and his experiences.  My mother, Masakona Miriam Mathegu, for being my inspiration. Apart from doing this for self-development, I break boundaries to make her proud of her own.  My brothers and sisters for their level of confidence in me and the encouragement to “press on”, which they provide. (Shonisani Mathegu, Thikhathali Mathegu, Thanyani Mathegu, Khodani Mathegu, and Tshedza Mathegu). Thank you for the support structure.  My brother, Thanyani Mathegu; my cousins Rudzani Mufhadi, Tshifhiwa Mufhadi, Tony Marageni, and Shumani Mufhadi, for the friendship they made available between us, although we are family.  My friend, Mvuselelo Mudimeli, for supporting me from the beginning. His friendship lies deep in my heart.  Mrs. Michele Allan and Miss Cathrine Bhola for their kind hearts, and their caring for me as if I were their own. I am forever grateful, and may God continue to bless them abundantly.  And lastly, I would like to express the deepest level of gratitude to the Department of Construction Management and Quantity Surveying, University of Johannesburg (UJ), South Africa for giving me the opportunity to study here.. ii.

(6) DEDICATION I dedicate this dissertation to my late sister, Shonisani Ashford Mathegu, whom God recalled too soon. Let this achievement wash you and make you golden, let it restore your dignity and pride as time and opportunity denied you that. You will forever be in my heart. Lastly, I dedicate this to my nieces and nephew and those who are to come after me: may all of you one day come across these works and use them as a source of inspiration to push yourselves beyond limits, to infinity and beyond.. iii.

(7) ABSTRACT The modern construction industry is characterised by its complex projects, fragmented nature, and its requirement for sophisticated management for the successful delivery of projects. Hence, project success rests heavily on its effective project management and collaboration among all relevant stakeholders in order to counter the challenges which negatively influence the performance of construction projects. With the construction industry being a critical sector in the economic development of South Africa, this study aims to evaluate the implementation of enterprise resource planning (ERP) systems for the purpose of effective construction project performance in the Gauteng Province of South Africa. This study assesses the perception of enterprise resource planning systems among construction professionals. The study further assesses the critical factors for their successful implementation, the benefits which can be gained through their implementation, the key performance indicators of a successful implementation, and also whether construction project performance can be improved through the implementation of ERP systems in the Gauteng Province construction industry. The data for this study were obtained from both primary and secondary sources. The primary data were obtained through structured questionnaires that were distributed to construction professionals and other relevant construction project stakeholders in contracting and consulting companies. The secondary data were collected through a rigorous review of related literature. Out of two hundred questionnaires handed out, a hundred and seventy-one were returned with only a hundred and sixty-seven of them being of good enough quality for analysis, thereby representing a response rate of eighty-six per cent. The findings that emerged from the questionnaire survey results obtained from the randomly selected respondents revealed that an ERP system is perceived to reduce operation costs, improve project cost control, promote effective planning of workforce distribution, maximise opportunities for staff education, eliminate unnecessary processes, enhance strategic resource planning, enhance strategic resource allocation, and improve project decision making, among other benefits. The study further revealed that the top most significant benefits of ERP system implementation in construction firms in the Gauteng Province include informed decision making, effective information management, effective project coordination, the elimination of unnecessary processes,. iv.

(8) and the elimination of idling resources. The most important critical success factor for successful ERP implementation in the construction industry includes a clear understanding of company goals, infrastructure availability, business process reengineering, and top management support, among others. Furthermore, the study established the most important key performance indicators for the successful implementation of an ERP system in construction firms include a centralised project execution plan, user satisfaction, and the effective management of company resource. It was also discovered that an ERP system can improve project performance through the consistency of material supply, effective planning of project execution, controlled competition for site resource, and resource availability. The study concludes that the perception of ERP systems among prospective end-users, an awareness of the benefits and the critical success factors for ERP system implementation, as well as the key performance indicators of a successful ERP system implementation are essential for a successful implementation of the ERP systems in the construction industry.. It is therefore. recommended that organisations which are considering the implementation of ERP systems should develop an effective change management strategy, which should also be combined with extensive education and training of its personnel in order to influence the perception of software usefulness among employees within the organisation. It further recommends that organisations should appoint an ERP systems consultant to help them with the establishment of their organisational needs in order to align them with the most suitable ERP software packages that can best suit those needs.. v.

(9) TABLE OF CONTENTS DECLARATION ........................................................................................................................................... i ACKNOWLEDGEMENTS .......................................................................................................................... ii DEDICATION ............................................................................................................................................. iii ABSTRACT................................................................................................................................................. iv TABLE OF CONTENTS ............................................................................................................................. vi LIST OF TABLES ...................................................................................................................................... xii LIST OF FIGURES ................................................................................................................................... xiii LIST OF MAPS ......................................................................................................................................... xiv LIST OF ABBREVIATIONS ..................................................................................................................... xv CHAPTER ONE ......................................................................................................................................... 1 INTRODUCTION ........................................................................................................................................ 1 1. BACKGROUND OF THE STUDY ................................................................................................. 1. 1.1. PROBLEM STATEMENT ............................................................................................................... 2. 1.2. RESEARCH QUESTIONS............................................................................................................... 4. 1.3. RESEARCH OBJECTIVES ............................................................................................................. 4. 1.4. PURPOSE OF THE STUDY ............................................................................................................ 5. 1.5. RESEARCH METHODOLOGY ...................................................................................................... 5. 1.6. RESEARCH DESIGN ...................................................................................................................... 6. 1.6.1. RESEARCH METHOD AND TECHNIQUE .......................................................................... 6. 1.6.2. RESEARCH AREA AND TARGET ....................................................................................... 6. 1.6.3. SAMPLING AND DATA COLLECTION .............................................................................. 6. 1.6.4. LIMITATION ........................................................................................................................... 6. 1.6.5. SCOPE OF THE STUDY ......................................................................................................... 6. 1.6.6. ETHICAL CONSIDERATION ................................................................................................ 7. 1.7. OVERVIEW OF CHAPTERS .......................................................................................................... 7. 1.9. CONCLUSION ........................................................................................................................... 10. CHAPTER TWO ...................................................................................................................................... 11 LITERATURE REVIEW: OVERVIEW OF THE CONSTRUCTION INDUSTRY, AND INFORMATION AND COMMUNICATION TECHNOLOGY IN CONSTRUCTION .......................... 11 2. INTRODUCTION .......................................................................................................................... 11 2.1. A GENERAL OVERVIEW OF THE CONSTRUCTION INDUSTRY .................................... 11. 2.1.1. ISSUES FACING THE CONSTRUCTION INDUSTRY IN EMERGING COUNTRIES 13. 2.1.2. DELAY FACTORS ............................................................................................................ 14. vi.

(10) 2.1.3. CAUSES OF CONSTRUCTION PROJECT SCHEDULE OVERRUNS ......................... 15. 2.1.4. METHODS OF MINIMISING CONSTRUCTION DELAYS .......................................... 18. 2.2. COMPUTER APPLICATION IN CONSTRUCTION ............................................................... 19. 2.3. GENERAL OVERVIEW OF ENTERPRISE RESOURCE PLANNING SYSTEMS ............... 24. 2.3.1. FUNCTIONS OF ENTERISE RESOURCE PLANNING SYSTEMS .............................. 26. 2.3.2. BENEFITS OF ADOPTING ERP SYSTEMS ................................................................... 27. 2.3.3. DISADVANTAGES OF ADOPTING ERP SYSTEMS .................................................... 30. 2.3.4. IMPLEMENTATION OF AN ERP SYSTEMS ................................................................. 31. 2.3.5. METHODS OF ERP IMPLEMENTATION: ..................................................................... 32. 2.3.5.1. Big-bang implementation ................................................................................................ 32. 2.3.5.2. Phased implementation ................................................................................................... 33. 2.3.5.3 Advantages of the big-bang phase implementation versus the phased approach................ 33 2.3.5.4. Disadvantages of the big-bang phase implementation versus the phased approach ....... 35. 2.3.5.5. Influential factors contributing to choice of implementation strategy ............................ 35. 2.3.6. CHALLENGES OF IMPLEMENTING ERP SYSTEMS .................................................. 36. 2.3.7 SYMPTOMS OF ENTERPRISE RESOURCE PLANNING IMPLEMENTATION FAILURE ............................................................................................................................................ 38 2.3.8. MAJOR ERP VENDORS ................................................................................................... 40. 2.3.9. CRITICAL SUCCESS FACTORS ..................................................................................... 42. 2.3.10. ERP SYSTEMS IN ENGINEERING AND CONSTRUCTION FIRMS ........................... 44. 2.3.11. ERP MODULES FOR ENGINEERING AND CONSTRUCTION FIRMS ...................... 49. 2.4. CONCLUSION ........................................................................................................................... 50. CHAPTER THREE .................................................................................................................................. 51 ENTERPRISE RESOURCE PLANNING OVERVIEW: INTERNATIONAL LITERATURE REVIEW .................................................................................................................................................................... 51 INTRODUCTION .......................................................................................................................... 51. 3 3.1. INDIA ......................................................................................................................................... 51. 3.1.1. BACKGROUND ................................................................................................................ 51. 3.1.2. INDIAN CONSTRUCTION INDUSTRY ......................................................................... 52. 3.1.3 ERP SYSTEMS IMPLEMENTATION IN INDIAN MULTINATIONAL COMPANIES: CASE STUDY ANALYSIS ............................................................................................................... 52 3.1.3.1. Bharat Petroleum Corporation Limited (BPCL) ............................................................. 53. 3.1.3.2. Tata Steel ........................................................................................................................ 54. 3.1.3.3. Indian Oil Corporation (IOC) ......................................................................................... 55. 3.1.3.4. Oil and Natural Gas Corporation (ONGC) ..................................................................... 57. vii.

(11) 3.1.4 3.2. LESSONS LEARNT........................................................................................................... 60. UNITED STATES OF AMERICA............................................................................................. 66. 3.2.1. BACKGROUND ................................................................................................................ 66. 3.2.2. THE UNITED STATE OF AMERICA CONSTRUCTION INDUSTRY ......................... 67. 3.2.3. RELUCTANCE OF ERP IMPLEMENTATION IN THE U.S.A ...................................... 68. 3.2.4. RECOMMENDATIONS FOR SUCCESSFUL ERP IMPLEMENTATION IN THE USA 70. 3.2.5. LESSONS LEARNT........................................................................................................... 71. 3.3. CONCLUSION ........................................................................................................................... 72. CHAPTER FOUR..................................................................................................................................... 73 ENTERPRISE RESOURCE PLANNING SYSTEM OVERVIEW IN AFRICA ...................................... 73 INTRODUCTION .......................................................................................................................... 73. 4 4.1. KENYA....................................................................................................................................... 73. 4.1.1. BACKGROUND ................................................................................................................ 73. 4.1.2. KENYAN CONSTRUCTION INDUSTRY ....................................................................... 74. 4.1.3. ERP ADOPTION IN KENYA ............................................................................................ 75. 4.1.4 ERP SYSTEMS IMPLEMENTATION IN KENYAN MULTINATIONAL COMPANIES: CASE STUDY ANALYSIS ............................................................................................................... 77 4.1.4.2 4.1.5 4.2. Bamburi Cement Limited (BCL) .................................................................................... 81 LESSONS LEARNT........................................................................................................... 83. GHANA ...................................................................................................................................... 85. 4.2.1. BACKGROUND ................................................................................................................ 85. 4.2.2. GHANAIAN CONSTRUCTION INDUSTRY .................................................................. 86. 4.2.3. ERP SYSTEMS ADOPTION IN GHANA ........................................................................ 88. 4.2.4. LESSONS LEARNT........................................................................................................... 90. 4.3. CONCLUSION ........................................................................................................................... 91. CHAPTER FIVE ...................................................................................................................................... 92 ENTERPRISE RESOURCE PLANNING SYSTEMS IN SOUTH AFRICA............................................ 92 5. INTRODUCTION .......................................................................................................................... 92 5.1. SOUTH AFRICA........................................................................................................................ 92. 5.1.1. BACKGROUND ................................................................................................................ 92. 5.1.2. THE SOUTH AFRICAN CONSTRUCTION INDUSTRY ............................................... 93. 5.1.2.1 5.1.3. CHALLENGES FACING THE SOUTH AFRICAN CONSTRUCTION INDUSTRY 94 ENTERPRISE RESOURCE PLANNING SYSTEMS ADOPTION IN SOUTH AFRICA .. ............................................................................................................................................. 96. viii.

(12) 5.1.4 5.2. LESSONS LEARNT......................................................................................................... 105. CONCLUSION ......................................................................................................................... 106. CHAPTER SIX ....................................................................................................................................... 107 RESEARCH METHODOLOGY AND DESIGN .................................................................................... 107 INTRODUCTION ........................................................................................................................ 107. 6 6.1. RATIONALE OF THE STUDY............................................................................................... 107. 6.2. RESEARCH APPROACH AND STRATEGY ........................................................................ 107. 6.3. RESEARCH AREA .................................................................................................................. 109. 6.4. TARGETED POPULATION ................................................................................................... 110. 6.5. SAMPLING .............................................................................................................................. 110. 6.6. DATA COLLECTION ............................................................................................................. 112. 6.7. INSTRUMENTS OF DATA COLLECTION .......................................................................... 112. 6.8. PERIOD OF COLLECTION .................................................................................................... 114. 6.9. DATA ANALYSIS: MEAN ITEM SCORE (MIS).................................................................. 115. 6.10. CONSISTENCY ....................................................................................................................... 116. 6.11. LIMITATION OF THE STUDY .............................................................................................. 117. 6.12. SCOPE OF THE STUDY ......................................................................................................... 118. 6.13. ETHICAL CONSIDERATION ................................................................................................ 118. 6.14. CONCLUSION ......................................................................................................................... 119. CHAPTER SEVEN ................................................................................................................................. 120 DATA ANALYSIS OF THE QUESTIONNAIRE SURVEY RESULTS ............................................... 120 7. INTRODUCTION ........................................................................................................................ 120 7.1. DATA ANALYSIS ................................................................................................................... 120. 7.1.1. SECTION A: BACKGROUND INFORMATION OF RESPONDENTS ....................... 120. 7.1.2 SECTION B: PERCEPTIONS OF ENTERPRISE RESOURCE PLANNING SYSTEMS IN THE SOUTH AFRICAN CONSTRUCTION INDUSTRY ........................................................ 125 7.1.2.1 Financial solution perspective of the role of ERP systems in the South African construction industry ......................................................................................................................................... 125 7.1.2.2 Human resource management perspective of the role of ERP systems in the South African construction industry ..................................................................................................................... 126 7.1.2.3 Procurement and logistical management perspectives of the role of ERP systems in the South African construction industry ............................................................................................. 127 7.1.2.4. Project management perspective of the role of ERP systems in the South African construction industry ..................................................................................................................... 129 7.1.3 SECTION C: CRITICAL FACTORS FOR THE SUCCESSFUL IMPLEMENTATION OF ERP SYSTEMS .......................................................................................................................... 130. ix.

(13) 7.1.4 SECTION D: BENEFITS OF IMPLEMENTING ENTERPRISE RESOURCE PLANNING SYSTEMS IN CONSTRUCTION FIRMS ................................................................. 131 7.1.5 SECTION E: KEY PERFORMANCE INDICATORS FOR SUCCESSFUL ERP SYSTEM IMPLEMENTATION IN A CONSTRUCTION FIRM .................................................. 133 7.1.6 SECTION F: IMPROVEMENT OF PROJECT PERFORMANCE THROUGH THE IMPLEMENTATION OF CONSTRUCTION ERP SYSTEMS ...................................................... 135 7.1.6.1. Time factor-related improvements in the construction industry through ERP systems ... 135 7.1.6.2. Cost factor-related improvements in construction project performance through ERP systems .......................................................................................................................................... 136 7.1.6.3. Quality factor-related improvements in construction project performance through ERP systems .......................................................................................................................................... 138 7.2. CONCLUSION ......................................................................................................................... 139. CHAPTER EIGHT ................................................................................................................................. 141 DISCUSSION OF FINDINGS ................................................................................................................. 141 INTRODUCTION ........................................................................................................................ 141. 8 8.1. BACKGROUND INFORMATION ......................................................................................... 141. 8.1.1 8.2. BACKGROUND INFORMATION RESULTS ............................................................... 141. RESEARCH QUESTION ONE................................................................................................ 142. 8.2.1. FINDINGS ........................................................................................................................ 143. 8.2.2. IMPLICATION OF FINDINGS ....................................................................................... 145. 8.3. RESEARCH QUESTION TWO............................................................................................... 146. 8.3.1. FINDINGS ........................................................................................................................ 146. 8.3.2. IMPLICATION OF FINDINGS ....................................................................................... 147. 8.4. RESEARCH QUESTION THREE ........................................................................................... 147. 8.4.1. FINDING .......................................................................................................................... 147. 8.4.2. IMPLICATION OF FINDINGS ....................................................................................... 148. 8.5. RESEARCH QUESTION FOUR ............................................................................................. 149. 8.5.1. FINDINGS ........................................................................................................................ 149. 8.5.2. IMPLICATION OF FINDINGS ....................................................................................... 150. 8.6. RESEARCH QUESTION FIVE ............................................................................................... 151. 8.6.1. FINDINGS ........................................................................................................................ 152. 8.6.2. IMPLICATION OF FINDINGS ....................................................................................... 153. 8.7. CONCLUSION ......................................................................................................................... 154. CHAPTER NINE .................................................................................................................................... 155 CONCLUSIONS AND RECOMMENDATIONS ................................................................................... 155 9. INTRODUCTION ........................................................................................................................ 155. x.

(14) 9.1. RESEARCH OBJECTIVE ONE .............................................................................................. 155. 9.2. RESEARCH OBJECTIVE TWO ............................................................................................. 157. 9.3. RESEARCH OBJECTIVE THREE.......................................................................................... 158. 9.4. RESEARCH OBJECTIVE FOUR ............................................................................................ 159. 9.5. RESEARCH OBJECTIVE FIVE.............................................................................................. 159. 9.6. CONCLUSIONS....................................................................................................................... 160. 9.7. RECOMMENDATIONS .......................................................................................................... 161. 9.8. AREAS FOR FURTHER STUDIES ........................................................................................ 162. REFERENCES ........................................................................................................................................ 163 APPENDIX 1: Cover Letter................................................................................................................... 181 APPENDIX 2: Questionnaire ................................................................................................................ 182. xi.

(15) LIST OF TABLES Table 2.1: Causes of construction project delays ......................................................................... 15 Table 2.2: Functions of ERP system ............................................................................................ 26 Table 2.3: Advantages of the big-bang vs. phased implementation ............................................ 33 Table 2.4: Disadvantages of the big-bang vs. phased implementation ........................................ 35 Table 2.5: Critical success factors for successful implementation of ERP systems .................... 42 Table 2.6: ERP system module for construction firms ................................................................ 49 Table 3.1: Cost benefit analysis of Bharat Petroleum Corporation Limited ................................ 60 Table 3.2: Cost benefit analysis of Tata Steel .............................................................................. 63 Table 3.3: Cost benefit analysis of the Indian Oil Corporation (IOC) ......................................... 64 Table 4.1: ERP implementation in the Kenyan market ............................................................... 76 Table 6.1: Questionnaire survey ................................................................................................ 114 Table 6.2: Values of Cronbach’s alpha ...................................................................................... 117 Table 7.1: Financial management solution perceptions of ERP systems in the South African construction industry................................................................................................................... 125 Table 7.2: Human resource management perceptions of ERP systems in the South African construction industry................................................................................................................... 127 Table 7.3: Procurement and logistical management perceptions of ERP systems in the South African construction industry ..................................................................................................... 128 Table 7.4: Project management perceptions of ERP systems in the South African construction industry ....................................................................................................................................... 129 Table 7.5: Critical factors for successful implementation of ERP systems ............................... 131 Table 7.6: Benefits of implementing ERP systems in construction firms ................................. 132 Table 7.7: Key performance indicators of a successful ERP system implementation ............... 134 Table 7.8: Time factor-related improvements in construction project performance through ERP systems ........................................................................................................................................ 136 Table 7.9: Cost factor-related improvements in construction project performance through ERP systems ........................................................................................................................................ 137 Table 7.10: Quality factor-related improvements in construction project performance through ERP systems................................................................................................................................ 139. xii.

(16) LIST OF FIGURES Figure 2.1: Linkage between organisation size and complexity and implementation approach used ....................................................................................................................................................... 36 Figure 2.2: Construction ERP layout ........................................................................................... 45 Figure 2.3: SAP ERP system solution for construction industry................................................. 47 Figure 2.4: Oracle ERP system solution for construction industry ............................................. 48 Figure 5.1: Conceptual framework for ERP implementation in South African enterprises ...... 100 Figure 5.2: Relationship framework for ERP implementation in South African enterprises .... 101 Figure 7.1: Respondents’ gender ............................................................................................... 121 Figure 7.2: Respondents’ ethnicity ............................................................................................ 121 Figure 7.3: Respondents’ age group .......................................................................................... 122 Figure 7.4: Respondents’ education qualification ..................................................................... 122 Figure 7.5: Respondents’ professions ........................................................................................ 123 Figure 7.6: Respondents’ years of experience ........................................................................... 124 Figure 7.7: Respondents’ work organisations............................................................................ 124. xiii.

(17) LIST OF MAPS Map 3.1: Map of India.................................................................................................................. 51 Map 3.2: Map of the United State of America ............................................................................. 67 Map 4.1: Map of Kenya ............................................................................................................... 74 Map 4.2: Map of Ghana ............................................................................................................... 86 Map 5.1: Map of the Republic of South Africa............................................................................ 92 Map 6.1: Map of Gauteng Province, South Africa .................................................................... 109. xiv.

(18) LIST OF ABBREVIATIONS ABAP. Advanced Business Application Program. AIDS. Acquired Immune Deficiency Syndrome. BPCL. Bharat Petroleum Corporation Limited. BOR. Bidco Oil Refineries. BCL. Bamburi Cement Limited. CIA. Central Intelligence Agency. CIDB. Construction Industry Development Board. CPM. Critical path method. Cr. Crore. EAI. Enterprise application integration. ENTRANS. Enterprise-wide transformation. ERP. Enterprise resource planning. FBI. Federal Bureau of Investigations. GAIL. Gas Authority of India Limited. GDP. Gross domestic product. GDCF. Gross domestic capital formation. HCM. Human capital management. HRM. Human resource management. HIV. Human immune virus. ICT. Information and communication technology. IRS. Internal Revenue Service. IT. Information technology. IS. Information system. IMF. International Monetary Fund. IOC. Indian Oil Corporation. KPI. Key performance indicators. MRP. Material resource planning xv.

(19) NCC. National Consumer Commission. ONGC. Oil and Natural Gas Corporation. PERT. Program evaluation and review technique. PWA. Price Waterhouse Association. ROI. Return on investment. Rs. Rupees. SAICE. South African Institute of Civil Engineering. SPSS. Statistical Package for Social Sciences. SQL. Structured Query Language. UNCHS. United Nations Centre for Human Settlement. UNIDO. United Nations Industrial Development Organisation. UNRWA. United Nations Relief and Works Agency. USA. United States of America. WAN. Wide area network. VSAT. Very small aperture terminal. xvi.

(20) CHAPTER ONE. INTRODUCTION. 1.. BACKGROUND OF THE STUDY. A major objective of development in any country is economic growth, and the construction industry is one of the main sectors contributing to economic development in the form of output generation, creation of employment, generation of income and its re-distribution. The construction industry plays a role in the production of basic infrastructure needed in other industries such as mining, manufacturing, agriculture, and communications which essentially makes a contribution directly to the growth of the economy. In both developed and developing countries the construction industry plays a major role in the economy by contributing significantly to the gross domestic product, employing a sizeable portion of the working population which accounts for about half of the capital formation and interacts firmly with other economic sectors (Hillebrandt, 1985). Although the construction industry is one of the largest contributors to the economy, it is considered to be one of the most highly fragmented, inefficient, and geographically dispersed industries in the world (Salleh, 2009). Relevant literature by Memon et al. (2010) and Al-Najjar (2002) revealed that through the years, the construction industry has been faced with the struggle of keeping projects within budget, under the planned schedule, and with desirable safety and quality. Studies carried out by Ali and Kamaruzzan (2010) and Arcila (2012) attempted to examine these inefficiencies, particularly with regard to how they are caused and how they can best be avoided. According to some researchers, the concept of addressing project performance can only be assessed when the dimensions are adequately defined, which can be done through a set of predefined indicators against which a construction project can be measured in order to determine how well they perform (Omar & Fayek, 2014). Generally, the dimensions of project performance may have more than one indicator, which can be influenced by a variety of project characteristics. For instance, Dissanayaka and Kumaraswamy (1999) and Iyer and Jha (2005) established that the time and cost elements of project performance can be influenced by the following characteristics: 1.

(21) procurement systems, project manager’s competence, project coordination and leadership, project monitoring and feedback techniques, and decision making. A number of solutions have been offered to overcome the industry’s inefficiencies and criticism regarding its underperformance due to the lack of performance measures, project monitoring, productivity, cost effectiveness, safety, and sustainability (Kagioglou et al., 2001; Chung, 2007), including the adaptation and usage of information technology and information systems (Chung et al., 2009) such as enterprise resource planning (ERP) systems. Having emerged in the last decade, according to Chung (2008), these ERP systems are often regarded as strategic enablers to help productivity and can be used as part of performance indicators and the information processing life cycle (Stensrud & Myrtveit, 2005) for the benefit of better project performance. However, according to Chung (2007), although many construction and engineering firms know about the benefits of implementing an ERP system, they are still hesitant to adopt and use them owing to their high cost and high risk. Taking into account that computer technology has brought about many benefits in helping the construction industry meet increasingly complex challenges as Paulson (2005) points out, this study aims to indicate that the implementation of an ERP can be used to affect controllable project characteristics – key performance indicators - which affect project performance for the benefit of its improvement, generally in dimensions corresponding to the traditional time, cost, quality, and health and safety constraints. The study further establishes the general perception of contractors regarding ERP systems, and sheds light regarding what the benefits of implementing such a system are, and what are considered to be the critical factors for their successful implementation. The introductory chapter (Chapter One) of this dissertation highlights the background and describes the structure and other components such as the problem statements, research questions and objectives, purpose, limitations, and overview of the chapter of this study.. 1.1. PROBLEM STATEMENT. The desire to finish a project on time under the planned budget with the highest quality and in a safe manner is a common goal for all contract parties, including the owner, contractor and consultant (Alkhathami, 2004). The successful execution of construction projects is frequently 2.

(22) influenced by either success factors that help project parties reach their goals as planned, or factors which stifle project completion (Salleh, 2009). However, traditionally, the construction industry has been faced with the problems of meeting project schedules, budget, and specifications set by the owner and architect/engineering (Chung et al, 2009). According to Hantos and Gisberg (2000), Costa et al. (2004) and Bassioni et al. (2004), the construction industry also has its own challenges to measure performance; and in an effort to stress the importance of performance metrics, Seang (2003) states that key performance indicators (KPI) are the performance measures critical to an organisation’s core business and continued success. However, the construction industry’s underperformance has been associated with the lack of performance measures, project monitoring, productivity, cost effectiveness, safety, and sustainability (Kagioglou et al., 2001; Lee et al., 2004) which ultimately result in financial and project management performance issues. Also, as a result of the lack of performance metrics, the construction industry cannot identify potential areas to maximize profitability (Navon & Goldschmidt, 2002). Many construction projects in developing countries report poor performance due to many evidential project-specific causes such as the unavailability of material, excessive amendments of original designs and drawings, ineffective site management and communication, poor coordination among participants, ineffective monitoring and feedback, and lack of project leadership skills (UNRWA, 2006; Alsehaimi et al., 2014). The issue of inefficient project performance is a global phenomenon, and South Africa is no exception. Hanson et al. (2003) examined causes of client dissatisfaction in the South African construction industry and found conflict, poor workmanship and incompetence of contractors to be among the factors which negatively impact on project performance. However, factors affecting project performance are controllable, and efforts should be made regarding the minimisation of their impact (Alsehaimi et al., 2014). This dissertation attempts to provide a solution to ineffective project performance in construction projects through the adoption and usage of enterprise resource planning (ERP) systems in South African construction organisations. This dissertation argues that the impact of such controllable causes of ineffective project performance needs to be minimized to improve performance through re-approaching and improving management practice. ERP systems will play a strategic role within the construction industry if construction firms adopt it as a tool to redress the organizational standardization of primary processes to help with decision. 3.

(23) making and consistent information sharing across the organization throughout the entire lifecycle of each of their projects. Moreover, the abundance of disintegrated information and its time-sensitiveness in the construction industry has made projects complex to manage (Skibniewski & Ghosh, 2009), making research essential in exploring a wider range of the usage of information technology to improve the efficiency of construction business operations and management. Although ERP has been fully implemented by major industrial sectors such as the manufacturing and petroleum industries, its use is limited to a few large organizations, and there has not been any indication in literature suggesting evidence of a construction ERP system within the South African construction industry. Therefore, this study aims to assess how an improvement in construction project performance can be achieved through the implementation of ERP systems in a construction organisation. 1.2. RESEARCH QUESTIONS. Based on the issues pointed out in the problem statement of this study, the research questions below were utilized to give the study a sense of direction: 1. What are the perceptions regarding ERP systems in the construction industry? 2. What are the benefits of implementing an ERP system in a construction firm? 3. What are the critical factors needed for the successful implementation of an ERP system? 4. What are the key performance indicators for successful implementation of ERP in construction firms? 5. Can a construction ERP system be used as a tool to improve project performance in South Africa?. 1.3. RESEARCH OBJECTIVES. With the elements the research study is interested in investigating communicated in the research questions, this study’s objectives are therefore as follows: 1. To determine the perceptions of professionals regarding ERP systems in the construction industry; 2. To identify the benefits of implementing an ERP system in a construction firm; 4.

(24) 3. To evaluate the critical factors needed for the successful implementation of an ERP system; 4. To establish the key performance indicators for successful implementation of ERP in construction firms; and 5. To evaluate whether a construction ERP system can be used as a tool to improve project performance in South Africa.. 1.4. PURPOSE OF THE STUDY. The construction industry’s underperformance has been associated with factors such as ineffective planning and control, poor communication between parties, unreliable availability of material, lack of effective project monitoring and productivity, among other factors, which leave it characterised by issues of cost overruns and repeated delays which are potentially more serious in developing countries. In addition, the performance of construction projects is also affected by the disintegration in information, making projects more complex to manage. While a body of knowledge regarding poor project performance and the major causes of this global phenomena exists, and further literature identifies the most important key performance indicators and knowledge regarding the implementation of ERP by most major industrial sectors, no research was found to exist which illustrates the improvement in the effectiveness of construction project performance through the implementation of an ERP system in the South African construction industry. This gap in the body of knowledge has motivated this study. This research can serve as a foundation to further explore the harnessing of project performance through the use of information technology. 1.5. RESEARCH METHODOLOGY. This section has to do with the strategy of enquiry, which moves from the underlying assumptions to research design and data collection (Myers, 2009). The nature of this study suggested a quantitative methodology to be the most appropriate as it requires input from different sources to constitute a consensus, owing to its descriptive nature. This section clarifies the processes adopted to collect data and information for this study to satisfy the requirement of a methodology which can investigate variables and scales to represent a population’s perception regarding the topic under investigation. Furthermore, it also defines the geographical location where the research was. 5.

(25) carried out, the sample design used to represent the population, and the instrument used to collect the data. 1.6. RESEARCH DESIGN. 1.6.1 RESEARCH METHOD AND TECHNIQUE This section of the study clarified the method used for the purpose of carrying out this research. With the methodology classified as quantitative, the researcher adopted the method of a descriptive survey design, therefore designing a questionnaire in order to have a statistical analysis and interpretation of the collected data. The technique used was that of distributing the designed questionnaire to construction stakeholders who are relevant to the study. 1.6.2 RESEARCH AREA AND TARGET The sample unit for this study was limited geographically to the province of Gauteng, South Africa. The population of this study was not infinite since it particularly sourced data from construction project stakeholders, who include architects, project managers, construction project manager, project planners, construction managers, site agents, quantity surveyors, commercial managers, mechanical engineers, civil engineers, and electrical engineers. 1.6.3 SAMPLING AND DATA COLLECTION This research study adopted a random sampling technique; hence all participants on the source list had an equal opportunity for selection. The questionnaire developed was therefore used as an instrument to collect data systematically from the participants. 1.6.4 LIMITATION Although the imperative to improve the construction industry’s project performance is desired across the country, this study is mainly focused on construction project stakeholders located in construction firms based in the Gauteng Province, South Africa. Not all stakeholders who contribute to the whole construction process were entertained. 1.6.5 SCOPE OF THE STUDY This research study concentrated on ERP system in the Gauteng Province construction industry; therefore the distribution of the questionnaire was mainly focused on construction professionals. 6.

(26) ERP systems can be examined from various spectrums; however, the scope of this research restricts the study to the establishment of perceptions of construction professionals regarding ERP systems, the benefits of implementing such a system in a construction organisation, the critical factors that facilitate a successful implementation of such a system, the key performance indicators of a successful indication, and lastly, establishing whether construction project performance can be improved through the implementation of ERP systems. 1.6.6 ETHICAL CONSIDERATION This study did not experience or distinguish any ethical issues, as the researcher did not interact on a deep level with the research participants, since the researcher would have had to enter the respondents’ personal space and domain of values, weaknesses, and so forth, to collect data. Furthermore, the ethical consideration in this research recognised the responsibility of citing professionals whose work has been referred to and added to this writing. The researcher was responsible for the adequate communication of the nature of the study, its purpose, and how much time, on average, it might take the respondent to answer the questionnaire. The obligation to the participants who responded to the research questionnaire was that their input would be kept private and utilized only for scholarly purposes. Respondents to the survey had the privilege not to answer questions that they felt were not fitting, with no pressure. 1.7. OVERVIEW OF CHAPTERS. This study follows the format of the logical sequence of establishing the problem statement, reviewing of the literature (concepts, theories and previous findings), formulating research questions and objectives, selecting the appreciate methodology, designing the research and sample, collecting and analysing data, interpreting the data and drawing conclusions. This research study is organised into nine chapters, which are as follows: Chapter One Introduction This section characterizes the issue that the researcher meant to explore and indicates how the investigation of the issue was conducted. This chapter discusses the background of the research and gives an outline of the research problem, research questions and objectives, and justification of the research. This section subsequently gives a system of the entire study.. 7.

(27) Chapter Two. Literature review: An overview of ERP systems in engineering and construction firms. This chapter reviews other literature published such as books, journals, reports, articles, white papers, and so forth, on similar areas of study by scholars and researchers on the construction industry, particularly with regard to problems and constraints towards its development. The review of literature in this chapter lends its focus to the field of information and communication technology, construction project performance and key performance indicators, and the body of knowledge in project management. This chapter presents the readers with information, knowledge and ideas that have been developed by various analysts and researchers on the subject. Subsequently this section of the study should help the readers gain more insight regarding what has been investigated this far by researchers of enterprise resource planning systems, key performance measures and construction project performance metrics: what they are and how these can be used to improve construction project performance in the construction industry. Chapter Three. Literature review: International construction industry. This chapter reviewed literature, as in Chapter Two; however, the literature reviewed here is that which is considered international. The international countries investigated are Korea and the United States of America (USA) which were selected for their leading technological pioneering and adaptation. And lastly, Malaysia was also investigated since the construction industry encounters similar challenges as those encountered by the South African construction industry with regard to project performance inefficiency. The researcher intended to gather information on the learnt lessons by the countries selected with regard to successes and failures of ERP system implementation in construction enterprises. Furthermore, the researcher sought to also gather literature regarding problems encountered by these countries with regard to construction project performance. Chapter Four. Literature review: African construction industry. This chapter reviewed literature which is considered local (within the African continent). The local countries investigated are Kenya and Ghana owing to the similarities in terms of challenges in the construction industry between the selected countries and that of South Africa. The researcher intended to gather information on the learnt lessons by the countries selected with regard to 8.

(28) successes and failures of ERP system implementation in construction enterprises. Furthermore, the researcher sought to also gather literature regarding problems encountered by these countries with regard to construction project performance. Chapter Five. Literature review: South African construction industry. This chapter continues to review related literature in published sources such as books, journals, reports, articles, white papers, and so forth by other researchers. However, this chapter focuses particularly on the South African construction industry, investigating successes and failures of ERP system implementation. Furthermore, the literature review in this chapter also reviews construction project performance metrics and factors which affect them. Chapter Six. Research methodology. This section describes the technique and plans that the researcher used to select participants and subsequently gather data from them. In this study, the researcher concentrated on a literature review and a questionnaire survey focused on construction project stakeholders and other relevant construction project stakeholders in Gauteng, South Africa. Furthermore, measurable techniques which were utilised to investigate the data gathered from the questionnaire survey are described in this chapter. Chapter Seven. Data analysis and discussion of data. When a fitting design and suitable method for measuring pertinent variables have been identified and adopted, the discoveries are broken down and analysed utilizing a proper methodology. Statistical techniques are employed to analyse information and draw up findings. The analysed results then give an input with regard to the initially defined questions. Chapter Eight. Discussion of Findings. The findings that surfaced in Chapter Seven are discussed and linked to the literature reviewed in Chapter Two in order to establish whether the research objectives were achieved and all the research questions were answered as well as whether the objectives of the research have been met.. 9.

(29) Chapter Nine. Conclusions and recommendations. This chapter is the concluding chapter and reflects the study as whole, including the analyzed data. In this chapter the researcher provides answers to the research questions, confirms that the research objectives have been met and provides future recommendations on the findings of the study. These recommendations may be of a topic which is similar, or related to the evaluation of ERP systems in the South African construction industry as a tool that can enable the improvement of construction project performance. The researcher also makes recommendations regarding the continuation of the topic of the current study by an interested researcher. 1.9. CONCLUSION. This chapter introduced the study, the various components of the study, and a description of how it was carried out. Moreover, the research problem was mentioned, and the research questions and objectives were outlined. Furthermore, in this chapter the purpose of the study was discussed, as well as an overview of all chapters which this research project comprises. The chapter which follows reviews literature regarding the current status of ERP systems utilization in the construction industry.. 10.

(30) CHAPTER TWO. LITERATURE REVIEW: OVERVIEW OF THE CONSTRUCTION INDUSTRY, AND INFORMATION AND COMMUNICATION TECHNOLOGY IN CONSTRUCTION. 2.0. INTRODUCTION. This chapter highlights the basic background information of the study, describing the contents of this study which will facilitate the overall understanding of the study. The chapter provides a theoretical overview of previous theories regarding the state of the construction industry with regard to dimensions affecting project success, construction project performance metrics of a successful construction project, and the use of information systems, particularly ERP systems, in engineering and construction enterprises. 2.1. A GENERAL OVERVIEW OF THE CONSTRUCTION INDUSTRY. The construction industry in both developed and developing countries may be viewed as that sector of the economy which, through planning, design, construction, maintenance and repair, and operation, transforms various resources into constructed facilities, ranging from residential to nonresidential facilities which play key roles in the process of development (Moavenzadeh & Rossow, 1975). In developing countries, as much as half of the total construction output may be in civil engineering projects i.e. transport facilities, power projects, irrigation, drainage, water supplies, and the like. Housing makes up less than a third of the total output, and what remains is shared among the construction of schools, factories, offices, hotels, hospitals, among others (Wells, 1986). The stakeholders in these construction activities include owners, architects, engineers, quantity surveyors, project managers, construction project managers, and general contractors who include special trade subcontractors, domestic subcontractors, selected subcontractors and all other project participants such as labourers, plant operators, and the like. The construction industry is regarded as a player with a key role if one regards the wide range of economic and social needs it satisfies, and also the significant contribution it makes towards the 11.

(31) fulfilment of various major national goals. In essence, it is a service industry, procuring its inputs and outputs from sources outside its sector, with which it is often interrelated, often in a complex way (Salleh, 2009; Moavenzadeh & Rossow, 1975). The development of the construction industry is an essential engine which supports growth as it contributes hugely to the gross domestic products (GDP), where its capacity and effectiveness to meet the demand of national economy for physical infrastructure is an indicator of economic performance (Tanzanian Construction Policy, n.d) and also ensures the following: . Increased value for money to industry clients as well as environment responsibility in the delivery process;. . The viability and competitiveness of domestic construction companies; and. . Optimisation of the role of all participants and stakeholders through process and technological enhancement.. The significance of construction derives from the role it plays in the creation of constructed facilities and in national employment, which ultimately play a critical role in a country’s development process. Possible measures of the role of the construction industry in the economy, according to UNIDO (1993), include the following: . Construction is relatively labour-intensive in that it uses a larger number of workers per unit output than any other industry, therefore is a very important employer;. . The percentage contribution of the construction industry to the gross domestic product is substantial. Its output typically constitutes between seven to ten per cent of the gross domestic product;. . The construction industry is critical to infrastructure development and provides a sizable contribution to fixed capital formation relative to other industries; and. . The share investment devoted to entirely new construction is like to be higher in developing countries compared to developed ones.. However, during the last few decades a number of studies have investigated factors which aid the successful completion of projects, particularly those which affect project success more than others (Salleh, 2009).. 12.

(32) 2.1.1 ISSUES. FACING. THE. CONSTRUCTION. INDUSTRY. IN. EMERGING. COUNTRIES Construction industries all over the world face numerous challenges: however, those facing emerging countries are significantly more complex (Gale & Fellows, 1990; Ofori, 1990; Salleh, 2009). They go hand-in-hand with socio-economic stress and chronic resource shortages (Ofori, 2000). Salleh (2009) states that conditions of uncertainty and risk continue to face the construction industry, but tend to be severe in developing countries. These uncertainties and risks include the following: . Instability Construction is one of the first industries to feel the effects of an economic recession (UNIDO, 1993). This oftentimes places local contractors in a position where they are unable to maintain and develop permanent supervisory staff and skilled labour.. . Scarce Resources Many emerging countries have natural resources in abundance; however, they are often plagued by shortages of resources such as money, skilled labour, and relevant technology.. . Unskilled labour force Although labour is abundant in developing countries, there tends to be a shortage of skilled labour (Moavenzadeh, 1984).. . Poor Infrastructure Poor infrastructure reduces productivity. According to the World Bank (1997), up to fifteen per cent of production is lost due to poor roads and storage facilities.. . Low levels of productivity, overruns, and excessive wastages Research in some developing countries indicates that projects are often completed with an overrun of up to 30 per cent in respect to the original contract price while variation orders result in a cost overruns of an additional 8.3 per cent (Al Momani, 1996).. Furthermore, the emerging countries tend to lack essential knowledge, finance, skills, and capability to support the development of their respective construction industries (Othman, 2013). 13.

(33) Other factors which are influential in the inefficiency and lack of rapid development, according to NCC (2005) are the following: . Low capacity and capability of the local contractors and consultants due to scarce resources and inadequate experience;. . Low productivity and quality;. . Low technical base;. . Inefficient and non-transparent procurement systems, corruption and financial mismanagement in public/ private sectors;. . Lack of supportive institutional mechanism in terms of financial credit facilities, equipment for hire and professional development; and. . Poor working conditions, including low standards of safety and occupational hazards on construction sites.. 2.1.2 DELAY FACTORS According to Alkhathami (2004), delays can be defined as the extra time needed to complete a construction project beyond its original initial planned duration, regardless of whether compensation will be considered. In the context of the construction industry, the desire to complete a construction project within budget, with satisfactory quality, and in a safe manner is regarded a goal which is common among all contract parties (Salleh, 2009). However, Arditi and Pattanakitchamrron (2006) stated that delays in construction can cause a number of changes in a project such as late completion, lost productivity, acceleration, increased costs, and contract termination which, according to Albinu and Jagboro (2002), Chan and Kumaraswamy (2002), and Murali and Soon (2006), may have effects such as time overruns, cost overruns, disputes, arbitration, litigation or total abandonment. Therefore, it is essential to identify the actual causes of delay in order to control and minimise the problem. Furthermore, it is also essential to identify project management factors which may be used to facilitate their avoidance and the corresponding expenses associated with them. In a study by Alaghbari et al., (2007), delay is regarded as the most common, costly, complex and risky problem encountered in construction projects. Furthermore, because of the overriding. 14.

(34) importance of time for both the client and contractor, in terms of performance and cost respectively it is the source of frequent disputes (Wei, 2010). Ahmed et al. (2003) indicate that delays can be divided into the following three major types: . Excusable and non-excusable Non-excusable delays are contractor related, and usually result in no additional money and time being granted to the contractor (Alaghbari, 2005), whereas excusable delays are regarded as “acts of God” which cannot be any party’s responsibility. Most contracts allow for the contractor to claim extension of time for this kind of delay without compensation (Alaghbari, 2005).. . Compensable and non-compensable Compensable delays are those that are generally caused by the project’s owner through failure to issue adequate drawings and specifications, delay in response to requests for information, changes in design, and so forth. The contractor then becomes entitled to both additional money and additional money and time (Alaghbari, 2005).. . Concurrent Concurrent delays arise when more than one factor delays the project at the same time or in overlapping periods of time (Alaghbari, 2005).. 2.1.3 CAUSES OF CONSTRUCTION PROJECT SCHEDULE OVERRUNS The causes of schedule overruns are those series of events that occur before and during the construction process that will affect the planned time for project completion. Various authors have identified and described a series of causes of delays. However, this study adopted the categories identified by Assaf and Al-Hejji (2006) and Theodore (2009), which comprehensively cover a total of nine categories that are understood to be the causes of construction project delays. Table 2.1: Causes of construction project delays Delay Categories i.. Project-related factors. Causes of delay o Original contract duration is too short o Legal disputes between various parties o Inadequate definition of substantial completion. 15.

(35) o Ineffective delay penalties o Type of construction contract o Type of project bidding and award ii.. Owner-related factors. o Delay in progress payment by the client o Delay in furnishing and delivering the site to the contractor o Change orders by owner during construction o Delays in revising and approving design documents o Delay in approving shop drawings and material samples o Poor communication and coordination by owner and other parties o Slowness in the decision-making process by owner o Suspension of work by owner. iii.. Contractor-. o Difficulties in financing the project. related factors. o Conflicts in sub-contractor’s schedule in execution of project o Rework due to errors during construction o Conflicts between contractor and other parties o Poor site management and supervision o Inadequate construction methods o Delays in subcontractors’ works o Inadequate contractor’s work o Frequent change of sub-contractors due to inefficiency o Poor qualification of contractor’s technical staff. iv.. Consultant-. o Delay in performance inspection and testing. related factors. o Inflexibility o Poor communication/ coordination between consultant and other parties 16.

(36) o Delay in reviewing and approving design documents o Conflict between consultant and design engineer o Inadequate design-team experience v.. Design. team-. related factors. o Mistakes and discrepancies in design documents o Delays in producing design documents o Unclear and inadequate details in drawings o Complexity of project design o Insufficient data collection and survey before design o Misunderstanding of owner’s requirements o Inadequate design-team experience o No-use of advanced engineering design software. vi.. Material-related. o Shortage of construction material in market. factors. o Changes in material types and specifications o Delay in material delivery o Damage of sorted material when they are needed urgently o Delay in manufacturing special building material o Late procurement of material o Delay in selection of finishing materials due to availability. vii.. Plant/Equipment-. o Equipment breakdown. related factors o Shortage of equipment o Inadequate equipment-operator’s skill o Low productivity and efficiency of equipment o Lack of high-technology mechanical equipment viii.. Labour-related factors. o Shortage of labour o Unqualified workforce o Nationality of workforce o Low productivity level of workforce. 17.

(37) o Personal conflicts among workforce ix.. External forces. o Effects of surface conditions o Delays in obtaining permits from the municipality o Hot weather effects on construction activities o Rain effects on construction activities o Unavailability of utilities on site o Effects of social and cultural factors o Traffic control and restriction at job sites o Accidents during construction o Delay in performing final inspections and certification by third party. Source: Assaf and Al-Hejji (2006); Theodore (2009) 2.1.4 METHODS OF MINIMISING CONSTRUCTION DELAYS Majid (2002) and Wei (2010) identified fifteen comprehensive factors which can influence construction project delays by minimising them. The consensus between the authors is as follows: 1. Site management and supervision 2. Effective strategic planning 3. Clear information and communication channels 4. Collaborative working in construction 5. Proper project planning and scheduling 6. Frequent coordination between the parties involved 7. Complete and proper design at the right time 8. Use of appropriate construction methods 9. Accurate initial cost estimates 10. Proper material procurement 18.

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