Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD)
Abstract
:1. Introduction
2. Contextual Background
2.1. Integrated Project Delivery (IPD)
2.2. Earned Value Management
2.3. Activity-Based Costing
2.4. D/5D BIM Automation
3. IPD Literature and Research Gap
4. Research Method
Participants’ Profiles
5. Antecedents of Success
5.1. Success Factors of IPD Process
5.2. Improving IPD Implementation
6. Discussion
7. Conclusions
Author Contributions
Funding
Conflicts of Interest
References
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Authors | Contribution and Limitations |
---|---|
Elghaish, Abrishami, Hosseini and Abu-Samra [30] | Providing a new approach to develop a fair compensation structure of the IPD-based BIM and activity-based costing (ABC). |
Elghaish, Abrishami, Abu Samra, Gaterell, Hosseini and Wise [19] | Developing a methodology to develop the project budget by estimating the minimum and maximum potential cash inflow to enable project parties to make the right decision before the construction stage commence. |
Elghaish, Abrishami, Hosseini, Abu-Samra and Gaterell [20] | Providing a fair model to estimate the three main transactions in the IPD projects, which are reimbursed cost, profit and cost saving. |
Kahvandi, et al. [54] | Exploring various key critical success factors, largely from a managerial perspective, with limited attention to cost estimation issues. |
Pishdad-Bozorgi and Srivastava [21] | A model to share risks and rewards using a game theory approach, particularly for cases in which project cost exceed the profit-at-risk percentage. Their study only provided an overview of the model with future empirical research needed to assess its practicality and quantify its impacts. |
Alves, et al. [55] | Presenting various techniques commonly used for TVD and applicable to the IPD context. |
Tillmann, et al. [56] | Discussed the underlying mechanisms of cost estimation within IPD-oriented projects and exploring the factors that influence success. Despite the study’s contributions, it does not focus on the tactics of allocating overhead resources. |
Ballard, et al. [57] | Recommended a set of procedures to enhance the chance of success in IPD cost estimation processes. Although the authors acknowledged that following TVD principles is a critical success factor, no explicit technique or procedure was recommended to make the recommendations useful in practical terms. |
Zhang and Li [15] | Developed a risk-reward compensation mechanism by combining risk perception and the Nash bargaining solution (NBS) techniques. However, this model does not consider the method of sharing actual risk-reward amongst participants and overlooked the impact of IPD compensation structure in successful profit/cost-saving sharing. |
Zhang and Li [15] | Combined risk perception and the Nash bargaining solution (NBS) techniques to formulate a risk-reward compensation model. However, the model was not sufficiently comprehensive to cover all possible types of engineering data, lacked empirical validity and, hence, required empirical studies. |
Liu and Bates [14] | Articulated a probabilistic contingency calculation model to predict proper contingency to minimise cost overrun; nevertheless, a mechanism to share pain/gain percentages remain unexplored. |
Pishdad-Bozorgi, et al. [58] | Discussed the potential of integration between TVD, BIM and IPD cost estimation. |
Ross [59] | Proposed risk-reward sharing model as the risk-reward ratio is measured by the overall performance score (OPS), which is a scale between 0 and 100, where 0 to 50 represents the pain scope, and 50 to 100 represent the gain range. After computing the risk-reward ration using OPS, the project participants should share this ratio in correspondence with the contract. |
Factors | Frequency | Percentage | Valid Percentage | Cumulative Percentage |
---|---|---|---|---|
There is no a tendering stage and using an open pricing technique. | 13 | 26.0 | 26.0 | 32.0 |
The allocation of responsibilities and risks should be clear and understandable. | 9 | 18.0 | 18.0 | 50.0 |
The compensation approach (Risk-rewards sharing) is flexible. | 10 | 20.0 | 20.0 | 70.0 |
The early involvement of all participants | 15 | 30.0 | 30.0 | 100.0 |
Other | 3 | 6.0 | 6.0 | 6.0 |
Total | 50 | 100.0 | 100.0 |
Factors | Category | Questions | Range | Minimum | Maximum | Mean | Std. Deviation |
---|---|---|---|---|---|---|---|
F1 | ABC and EVM Integration | Integrating EVM into IPD can easily facilitate its implementation regarding sharing risk-reward between owner/non-owner parties. | 4 | 1 | 5 | 3.36 | 0.964 |
F2 | ABC and EVM Integration | Using an automated model to show the due payment for all parties based on their achievement against planned values. | 4 | 1 | 5 | 3.58 | 0.906 |
F3 | Cost Estimation/Budgeting | Providing a separate cash flow for each participant including the proposed proportional cash in based on agreed profit-at-risk percentage. | 3 | 2 | 5 | 3.60 | 0.700 |
F4 | Cost Estimation/Budgeting | Adopting ABC to develop a list of activities to enable getting reliable cash-out curve (S curve) by considering all costs (direct, indirect, and overhead). | 3 | 2 | 5 | 3.64 | 0.749 |
F5 | Risk-reward sharing and ICT | Developing an EVM-based web report to enable tracking of the project by all participants as well as easy access from different devices. | 4 | 1 | 5 | 3.64 | 0.942 |
F6 | Cost Estimation/Budgeting | Utilising ABC to identify the different sources of overhead cost clearly. | 4 | 1 | 5 | 3.68 | 0.935 |
F7 | Risk-reward sharing and ICT | A fair allocation system with clear implementation models can enhance implementing IPD. | 4 | 1 | 5 | 3.72 | 0.927 |
F8 | ABC and EVM Integration | Adapting EVM with ABC to identify risk-reward sharing fairly through developing mathematical models for all potential cases. | 4 | 1 | 5 | 3.82 | 0.896 |
F9 | Risk-reward sharing and ICT | Providing an EVM grid to locate the cost performance ratio (CPR) and schedule performance ratio (SPR) to determine the holistic view of project progress. | 3 | 2 | 5 | 3.86 | 0.808 |
F10 | General | Using a comprehensive process for cost management within the entire IPD stages to increase its implementation and minimise the waste of time and resources. | 4 | 1 | 5 | 3.98 | 0.820 |
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Elghaish, F.; Hosseini, M.R.; Talebi, S.; Abrishami, S.; Martek, I.; Kagioglou, M. Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD). Sustainability 2020, 12, 9539. https://doi.org/10.3390/su12229539
Elghaish F, Hosseini MR, Talebi S, Abrishami S, Martek I, Kagioglou M. Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD). Sustainability. 2020; 12(22):9539. https://doi.org/10.3390/su12229539
Chicago/Turabian StyleElghaish, Faris, M. Reza Hosseini, Saeed Talebi, Sepehr Abrishami, Igor Martek, and Michail Kagioglou. 2020. "Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD)" Sustainability 12, no. 22: 9539. https://doi.org/10.3390/su12229539
APA StyleElghaish, F., Hosseini, M. R., Talebi, S., Abrishami, S., Martek, I., & Kagioglou, M. (2020). Factors Driving Success of Cost Management Practices in Integrated Project Delivery (IPD). Sustainability, 12(22), 9539. https://doi.org/10.3390/su12229539