experiences of success in industrial plants projects ... · getting feedback to improve project...

Experiences of success in industrial plants projects

Nuria Forcada*1, Miquel Casals*, Marta Gangolells*, Xavier Roca*, Alba Fuertes*

Experiencias exitosas en proyectos de plantas industriales

* Universidad Politécnica de Catalunya, Barcelona, SPAIN

Fecha de recepción: 19/ 11/ 2007Fecha de aceptación: 10/ 04/ 2008PAG. 82 - 93

Abstract

Success has always been the ultimate goal of construction projects, and different researchers have tried to evaluate it using different factors. Although

specialized industrial construction usually involves very large scale projects with a high degree of technological complexity, research has mostly focused

on civil and residential success factors. Experiences in Industrial Plants projects can help to improve project management and productivity in such a specialized

sector. In this kind of projects, the contractual arrangement is one of the core differences on Project management and thus project success.

This research seeks to develop a schema for classifying critical success factors as well as a methodology for evaluating projects. This methodology was

adopted to evaluate critical success factors in Industrial Plants projects with different contractual arrangements. Findings suggest that although the construction

stage has been the focus of many studies, the first stages are decisive for the success of projects; contract construction projects consider project planning to

be more important; lump sum contract construction projects give greater importance to monitoring the benefits; bidding competition projects consider the

available technology with greater rigor, etc. The results indicate that different Industrial Plants projects involve different success factors and management

characteristics to achieve project objectives.

Keywords: Industrial plants, construction industry, project management, success factors, project evaluation

Resumen

En cualquier proyecto de construcción el principal objetivo es que sea exitoso y por lo tanto a lo largo del tiempo diferentes investigadores han tratado de

evaluar los factores que influyen en el éxito de proyectos. En el ámbito de la construcción estas investigaciones se han enfocado principalmente a obras

civiles y residenciales. Este artículo muestra resultados que provienen de proyectos de construcción industrial especializada que incluyen proyectos de

gran escala con un alto grado de complejidad tecnológica, relaciones contractuales más complejas que en las obras residenciales, mayor dificultad en la

gestión de proyectos, etc. Las experiencias exitosas en proyectos de Plantas Industriales pueden ayudar a mejorar la gestión de proyectos y la productividad

en un sector tan especializado como es la construcción industrial. En esta investigación se desarrolla un esquema de clasificación de factores críticos para

el éxito así como una metodología para evaluar proyectos. Esta metodología fue adoptada para evaluar factores críticos para el éxito en distintos proyectos

de Plantas Industriales con diferentes relaciones contractuales. Las conclusiones sugieren que aunque la etapa de construcción haya sido el foco de muchos

estudios, las primeras etapas son decisivas para el éxito de proyectos; los proyectos con un sistema de contratación tradicional consideran la planificación

del proyecto como lo más importante; los proyectos "llave en mano" dan una importancia mayor al monitoreo de los beneficios; los proyectos que se llevan

a concurso consideran la tecnología disponible con mayor rigor, etc. Los resultados indican que distintos proyectos de Plantas Industriales requieren de

diferentes factores de éxito y características de gerencia para alcanzar sus objetivos.

Palabras Clave: Plantas industriales, sector de la construcción, gestión de proyectos, factores para el éxito, evaluación de proyectos

The construction process is subjected to theinfluence of highly variable and sometimes unpredictablefactors. The construction team, which includes architects,engineers, subcontractors, and others, changes from onejob to the next. Consequently, construction projects are

typified by their complexity and diversity and by the nonstandardized nature of their production (Clough et al.,2000).

Construction is normally classified as: civilengineering and building construction. In Spain, fromthe building construction perspective, 90% of projectsare res ident ia l bui ldings (SEOPAN, 2007).

Revista Ingeniería de Construcción Vol. 23 No2, Agosto de 2008 www.ing.puc.cl/ric 82

1. Introduction

Experiences of sucess in industrial plants projects

1 Autor de correspondencia / Corresponding author:C/Colom 11, Ed. TR-5, Terrasa, Barcelona. Spain.E-mail: [email protected]

83

Although there are no authors were unable touncover studies in Industrial Plants Construction, mostof the work in construction project management hastraditionally focused on project scheduling problems,assuming that the development of better schedulingtechniques would result in better management and thusthe successful completion of projects. However, thereare many factors beyond the control of managementwhich could determine the success or failure of a project.Most of the early studies in this field focused on thereasons for project failure rather than the reasons forproject success.

Industrial firms who pay close attention to thepeculiar characteristics of the industrial constructionindustry and its changing operating environment will beable to take advantage of favorable conditions and toavoid pitfalls. Several factors are particularly noteworthybecause of their significant impacts on the quality, costand time of construction. Therefore, combinations ofthese factors at different stages usually result in the successor failure of projects.

2. Research methodology

The aim of this paper is to define a methodologyfor evaluating projects and to analyze success experiencesin different types of projects with the final objective ofgetting feedback to improve project management inindustrial construction projects. Furthermore, thosecompanies interested in getting into the Spanish industrialmarket would have real information on the workingmethodologies in the industrial construction sector inSpain.

A critical review of the current literature oncritical success factors for construction projects allowedthe authors to formulate the following methodology forachieving their research objectives:

1. A thorough and critical review of the literature oncritical success factors for construction projects.

2. Definition of a Success and Failure Evaluation System(SFES) for all project stages from the literature review.

3. Evaluations of industrial construction projects usingSFES with different contractual arrangements: lumpsum vs. contract construction and bidding competitionvs. negotiated contract.

4. Development of conclusions by contractualarrangement with the aim of identifying the factorsthat affect projects and providing solutions for futureindustrial construction projects.

Many studies evaluate critical success factors inresidential buildings due to its standardisation andsimplicity. Although non-residential buildings is the 17%of the total construction in Spain and industrial constructionis only the 18% of this subsector, tne acceleation fo theprivate demands is allowing a light recuperation of thissegment. However, very rarely researchers study thisspecific market (SEOPAN, 2007).

Currently, numerous European, North American,and Asian industrial firms are likely to settle down inSpain. They will be looking for Spanish constructioncompanies to carry out their work, particularly on largeprojects. Moreover, separate bids from numerous foreignconstruction firms are not unusual. In this environmentof heightened competition, good project managementand improved productivity are more and more important.A study of success factors in Industrial Plants Projects canhelp Spanish and foreign companies interested in gettinginto the Spanish industrial construction market to plantheir strategies and achieve their objectives.

The various contractual arrangements reflectfundamental differences in the allocation of responsibilityand in the success of the project. An owner may have in-house capacities to handle the management in every stageof the entire process (lump sum construction), or mayseek professional advice and services for the work insome stages (contract construction).

The owner can also select designers andcontractors on the basis of competitive bidding, negotiation,or some combination of the two. A large proportion ofthe construction in Spain is done by contractors whoobtain their work through competitive bidding. Competitivebidding of public projects is normally required by law.At times, it can be advantageous for an owner to negotiatea contract for its project with a pre-qualified contractoror small group of contractors. It is common practice foran owner to forgo the competitive bidding process andto handpick a contractor on the basis of its reputationand overall qualifications to do the job. This type ofcontract normally is limited to privately financed work.

Under any contractual arrangement, althoughthe parties perceive project success or failure differently,the success of a project is defined as achieving the initialobjectives. Every decision-making problem is orientedtowards the selection of the correct strategies for achievingobjectives, and depends on the assumptions associatedwith different scenarios. Therefore, the definition of thecritical success factors and the analysis of risks arenecessary to analyze the achievement of project objectives(Özdogan I. and Birgönül, M.T., 2000).

Revista Ingeniería de Construcción Vol. 23 No2, Agosto de 2008 www.ing.puc.cl/ric

Nuria Forcada, Miquel Casals, Marta Gangolells, Xavier Roca, Alba Fuertes

84

that the analysis of traditional success factors (time, costand quality) are not enough for the project success. Thesefactors should be complemented with more intangiblefactors such as client satisfaction, performance,management, etc.

4. Basis for the development of asuccess and failure evaluationsystem

4.1 Success factorsFrom the previous analysis, a number of variables

influencing the success of project implementation wereidentified. A careful study of previous literature suggeststhat the most accurate and extensive model to define allthe Critical Success Factors in whatever constructionproject is the one described by Chan et al., (2004).Therefore, this study will be based in this model and willtry to validate this model theoretical model in real industrialplants projects.

From this model, the main structure of CriticalSuccess Factors is: Project management factors, Projectrelated factors, External factors, Tendering method, andHuman-related factors (See Figure 1). Nevertheless, allof them based on the most important goal: clientsatisfaction.

3. Factors affecting project success

Success and failure factors were first introducedby Rubin and Seeling (1967) and followed by Avots (1969)who investigated the impact of a project manager’sexperience on the project’s success or failure.Baker, Murphy and Fisher (1983) suggested that insteadof using time, cost and performance as measures forproject success, perceived performance should be themeasure, while Maloney (1990) stated that the successof the project was based on client satisfaction and it mustbe evaluated through the project performance in termsof cost, schedule and quality.

On the other hand, Freeman and Beale (1992)and Riggs et al., (1992) suggested that less tangible projectsuccess factors should also be recognized.In terms of classification methods, Schultz, Slevin andPinto (1987) classified critical factors as strategic ortactical. In their follow-up work, Pinto and Slevin (1989)and Pinto and Prescott (1990), Belassi and Tukel (1996),Shenhar et al., (1997), Chan et al., (2004) and othersidentified the relative importance of success factors foreach stage of the project.

Lim and Mohamed (1999) further classifiedproject success into two categories: the macro and microviewpoints. However, Brown and Adams (2000) andNewcombe (2000) reported that time, cost and qualitywere still the prime project objectives.

From the literature review, it can be concluded


Figure 1. Framework for critical success factors and variables


85

The success factors related to ‘projectmanagement’ include the communication system, controlmechanism, feedback capabilities, planning effort,organizational structure, safety program, quality assuranceprogram, monitoring the work of subcontractors andoverall managerial actions (Belout, 1998; Chua et al.,1999; Walker and Vines, 2000; Chan’s et al., 2004; Gannand Whyte, 2003).

Walker (1995), Songer and Molenaar (1997),Belout (1998), Chua et al., (1999), Dissanayaka andKumaraswamy (1999) and Kumaraswamy and Chan (1999)postulated project characteristics as a factor affecting thesuccess of a construction project. Therefore, the variablesused in this research to measure ‘project related factors’are the type, nature, complexity and size of the project.

Various researchers support ‘environment’ as afactor affecting the project success (Kaming et al., 1997,Songer and Molenaar 1997, Chua et al., 1999; Walkerand Vines, 2000). ‘Environment’ is defined as all externalinfluences on the construction process, including social,political and technical systems. The variables used in thissystem to measure this factor are the economic, social,political, physical and industrial relations environmentand the level of technological advancement.

A number of researchers identified theimportance of ‘tendering methods’ (Pocock et al. 1997a,1997b; Walker 1997; Kumaraswamy and Chan 1999;Walker and Vines 2000). Therefore, the procedures adoptedfor the selection of the project team and in particular themain contractor are used to measure this factor.

Chua et al., (1999) defined project participantssuch as the client, the designer, the contractor and theproject manager (human-related factors) as the key players.Walker (1995), Chan and Kumaraswamy (1997), Songerand Molenaar (1997) and Dissanayaka and Kumaraswamy(1999) considered the influence of the client as a significantfactor on construction time performance and defined theclient-related factors such as client type and experience,knowledge of construction project organization, projectfinancing, client confidence in the construction team,etc. Chan and Kumaraswamy (1997) and Gann and Whyte(2003) considered that designers play a vital role as theyare involved from inception to completion of a projectso quality design is a key issue for the success of a project.Contractor’s experience is also a key success factor onthe construction stage of a project (Chan andKumaraswamy 1997; Dissanayaka and Kumaraswamy1999). Finally, the project manager is another keystakeholder in a construction project and his competence

is a critical factor affecting project planning, scheduling,and communication (Belassi and Tukel 1996).

The variables used in this research to measurehuman-related factors are client’s experience, nature andsize, client’s expectations, abilities and contributions,project team leader’s experience, technical andmanagement skills commitment to meet cost, time andquality and adaptability to changes in the project plan.

4.2 Success factors and project stagesThe construction stage is where all the project

goals of the contractual parties like time, cost, performance,quality, safety and so on are established and put to test.The degree of effectiveness of the project managementfunctions and the degree of success of the project goalswill determine the degree to which the individual partywill perceive the project as being successful from its ownviewpoint (Lim and Mohamed 1999). It is interesting tonote that the construction stage has been the focus ofmany studies. It is during the construction stage that thedemands for time, cost and quality requirements becomemost acute. In practice there are plenty of examples inwhich a project takes a long time to be decided, planned,designed, tendered, awarded and signed. Finally, whenit comes to the construction stage, all the past inadequaciesof every preceding stage appear and everything must bedone within the schedule and budget given. We musttherefore be aware that there may be important issuesthat are not properly addressed in the preceding stage.

Therefore, the critical success factors definedabove can come up as the project progresses from theconceptual stage to the finalization stage. Figure 2 depictsthe complete project stages as a project progresses.

Based on the previous classification of CriticalSuccess Factors and the stages of a project a set ofparameters (P)/questions (Q) to evaluate all critical successfactors from the conception until the finalization stage ofa project were formulated. These questions were definedin cooperation with an expert group of project managerswho were asked to formulate representative questions tostablish the different critical success factors. However,many factors were identified in different stages but thequestions defined to consider them where different.Consecuently, evaluation questions were organisedaccording tho the different stages of the project.

Table 1 show the relationship between theparameters / questions for each stage of the constructionprocess and the different factors / variables describedabove.



86Revista Ingeniería de Construcción Vol. 23 No2, Agosto de 2008 www.ing.puc.cl/ric

Table 1. Relation between success / failure factors and parameters in the conceptual stage

Figure 2. Project life cycle

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

Parameters / questions

Are you sure of what business units or strategic functions

support the proposal and whether they fit in the strategy?

Is the proposal attractive in size, saving, contribution, etc.?

Is the proposal attractive for the client or user?

If there are competitors with similar capacity, be sure that

the proposal can offer a competitive advantage

Is the proposal revised and accepted?

Have you got a sponsor?

Have you got a project director?

Have you got enough resources for the execution of the

conceptual stage?

Is it possible to carry out the project with current technology?



Is the proposal attractive?

Is the previous stage completed?

Is the general investment acceptable?

Is there a detailed planning of resources and a plan of

costs for the planning stage?


costs for the whole project?

Have you got a sponsor for the project?

Have you got a project director?

Have you got enough resources for the execution of the

definition stage?

Is the organization prepared to support the development

of the technology? If not, Is it possible to carry out the

project with current knowledge?

Is the project revised and accepted?



Have you analysed and tested the experience on purchase,

construction, etc, for this project?

Is the project plans defined and completed?


costs for the design stage?



Is the project designed to avoid the known risks?

Have you got the necessary funding to carry out the design

stage?

Is there is a formal agreement with the parties?

Is it possible to carry out the project with available

technology?

Has the organization the operational capacity to carry out

the project?

Project

Management

factors

1.5

1.2, 1.7

1.5

1.5

1.5

1.4

1.4

1.5

1.5

1.2

1.5

1.2

1.4

1.4

1.4

1.2, 1.4

1.1, 1.5

1.5

Project-

related

factors

2.4

2.3

2.2

2.3

1.5

External

environmental

factors

3

3.1

3.6

3

3.1

3.1

3.1, 3.6

3

3.6

Tendering

method

4

4

4

Human-

related

factors

5.4

5.3, 5.4

5.3, 5.4

5.1, 5.3,

5.4

5.1, 5.3,

5.5, 5.7


87

spreadsheets for each stage. The parameters are affirmativequestions and are located on the left hand side of thespreadsheet. There are as many rows as factors to beevaluated. Three main columns show the results of theevaluation. The first column shows whether the parameteris taken into account or not. Then, a five point scale isused to evaluate the significance of the parameter in theproject. The higher the qualification, the more importantthe parameter is in the project. The last column is just tomake comments if they are necessary.

The same evaluation/checklist should be usedfor each stage of the project together with a generalassessment.

To analyze the information of the SFES of eachcase study, the results are presented on a filing card shownin Figure 3.

5. Description of the system

To analyze the critical success factors in aconstruction project a SFES is defined. This system shouldbe based on the critical success factors and the parameters/questions described above for all the stages of a project.

Actually, success factor should haverepercussions in different project stages. For example,Management skill of project team leaders (variable 5.9)to evaluate the human-related factors affects from thetender stage to the finalization stage of the project anddifferent parameters/questions such as the analysis of risksin different stages (P 39 and 51), the revision of the projectin the construction stage (P 52) and the analysis of time,budget and quality in the finalization stage (P 57) analyzethis success factor.

Therefore, the System is organized using different


31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54

55

56

57

58

Parameters / questions

Are the objectives clearly defined and completed?

Do you know how the project success will be tested?

Is the organization prepared to support the development

of the project?


Is the project still an attractive and viable business proposal?


costs for the tender stage?



Are resources available for carrying out the construction

stage?

Are the important risks eliminated?

Are all the tests done and their results accepted?

Is test plan prepared?

Are the checklists for the users prepared?

Is the acceptation criteria for the tender stage defined?


Is the project still an attractive and viable business proposal?

Is the design process accepted by the company and all

the tests are approved?

Are all the expected costs and benefits reviewed according

to the business plan?

Is the project plan updated and completed?


costs for the construction stage?

Are resources available for carrying out the finalisation

stage?

Are the important risks eliminated?


Is the business forecast updated to obtain the emerging

benefits account of the project?

Is there anybody in charge of monitoring the financial part

and the benefits of the project?

Are the evaluation methods for measuring the benefits

defined?

Is the budgetary part of the project closed?

Are all the time, budget and quality analysis defined?

Is the project economically examined?

Project

Management

factors

1.4

1.2, 1.7

1.2

1.4

1.4

1.2, 1.3

1.2, 1.7, 1.8

1.4, 1.7, 1.8

1.4, 1.7, 1.8

1.2

1.2

1.2

1.2, 1.3, 1.4

1.2, 1.3

1.4

1.2, 1.3

1.2, 1.7, 1.8

1.3

1.5

1.2

1.9

1.2

1.3

Project-

related

factors

2.2

2.2

External

environmental

factors

3

3

3.1

3

3

3.1

Tendering

method

Human-

related

factors

5

5.10

5.3, 5.4

5.7, 5.9, 5.11

5.7, 5.8, 5.9

5.8

5.10

5.7, 5.8

5.9, 5.11

5.9

5.7, 5.9, 5.11

5.7, 5.8, 5.9

5.7, 5.9

5

5.9, 5.10


Table 1. Relation between success / failure factors and parameters in the conceptual stage (continued)


Figure 3. Filing card to evaluate the success of a project

6. Data collection and analysis

17 industrial construction projects from a varietyof contractual arrangements were raldomly selected tobe deeply monitored and analyzed from the initial stageuntil the end of the project using the SFES presentedabove. The general characteristics of these projects aredefined in Table 2 while Table 3 shows the agrupation ofthese projects by their type: tender projects, projectswithout thenders, internal projects and external projects.

Each project was analyzed in depth in order toobtain general rules of success and failure, the workingmethodologies and behaviors for different industrialconstruction projects in Spain.

The results of this analysis are only an orientationof the industrial construction projects tendency due tothe reduced number of case studies. The conclusions arebased on comparative and qualitative analyses due to thelack of homogeneity in the sample. Nevertheless, thegeneral idea of the sector behavior is achieved.

Table 2. Informaton from the case study projects

Characteristics of the evolution of the project

The initial client objectives were totally obtained but there were improvement

opportunities in the conceptual stage of the project that would avoid uncertainties

in the finalization stage. During the conceptual stage the timing and start up of

the project weren’t defined. This caused problems in the finalization stage.


opportunities that would have avoided unnecessary risks. In the conceptual

stage the control test for the start up weren’t defined. The planning was not

defined and the objectives of the project were unclear so the client could not

evaluate the project until some months after.

The initial client objectives were totally obtained.




The initial client objectives were obtained but there were improvement opportunities

in the tender and construction phases that would have avoided unnecessary

risks.



Although the setting up of the installations was not completely defined, the initial

client objectives were totally obtained.



The client’s evaluation of the obtained objectives was positive but if some

organisational aspects of the definition stage were taken into account, the client

would have been more satisfied.


opportunities in the design stage of the project that would avoid uncertainties

in the construction stage.




Project

Construction of a waste water treatment facility for a dyeing plant

Construction of a waste water treatment facility for a lamp factory

Construction of a waste water treatment facility for a meat packing plant

Construction of a wastewater treatment facility for a packing plant

Construction of a wastewater treatment facility for a chemical plant

Construction of a mineral water bottling and packing plant

Construction of a main sewer, preliminary treatment facility and underwater outlet

Construction of a diamond saws plant

Construction of an automating bottling plant

Construction of an Industrial Treatment Centre

Construction of a maintenance process of aluminium at high temperatures for energy saving

Construction of an automating bottling plant

Construction of a thermal treatment of aluminium sections plant

Construction of a transport, storage and treatment of aluminium plant

Construction of an aluminium plant

Construction of an industrial channel

Construction of an industrial estate water treatment

Budget

0,5 M€

0,2 M€

0,2 M€

0,5 M€

1,5 M€

2,5 M€

1 M€

0,2 M€

0,5 M€

1,5 M€

0,2 M€

0,1 M€

0,5 M€

1 M€

0,2 M€

9,5 M€

0,2 M€

Duration

36 months

6 months

6 months

6 months

10 months

8 months

12 months

6 months

10 months

11 months

12 months

4 months

11 months

12 months

12 months

18 months

4 months

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17


89

Figure 4 and Figure 5 show the summary of theresults of evaluating the success of different projectsaccording to their contractual arrangements (lump sumcontract vs. contract construction and bidding vs.negotiation contractual arrangement). The results of theevaluation are arranged in columns. For each projectthere are 58 parameters to be evaluated, which aremonitored during each stage of the project and shown in58 rows. The colored boxes (N) are the parameters ofthese projects that were not considered during the project.The other boxes (Y) are those parameters of the projects


that were considered during the project. The reasons forconsidering or not these parameters in the different projectsare not shown in this table due to the huge amount ofinformation, but the conclusions also refer to thisinformation. For each parameter and depending on thecontractual arrangement, a percentage of projects thatconsidered the mentioned parameter (%Y) and apercentage of projects that didn’t consider the mentionedparameter (%N) are shown. The objective is to obtain thetendency for each parameter in the different contractualarrangements.

Table 3. Classification of projects

Type of project

Tender projects

Projects without tenders

Internal projects

External projects

Project code

1, 2, 3, 4, 5, 7, 9, 13, 19, 20, 21 and 22

6, 10, 11, 12, 14, 15, 16, 17 and 18

3, 6, 7, 8, 10, 11, 12, 13, 14, 15, 16, 17, 18, 21 and 22

1, 2, 4, 5, 9, 19, 20

Figure 4. Comparison between projects with a tender process and without a tender process



Figure 5. Comparison between internal and external projects


tests and results.- In general, the competitive advantages and the

monitoring of the project are given little importance.Only 14% of the contract construction projectsanalyzed the competitive advantage of the proposalin relation to the competitors with similar capacities(P 4). However, contract construction projects considerproject planning (P 24) to be more important (100%of the analysed projects) than lump sum projects(70% of the analysed projects). This is because incontract construction projects problems can appeardue to client dissatisfaction. If planning is notundertaken during the design stage the client cannotmonitor and control the activities. But, surprisingly,many projects don’t plan their resources and costsand at the end, their clients are satisfied with theoverall project.

- On the other hand, the control mechanism such asthe evaluation methods is defined as very importantbut lump sum projects give greater importance tomonitoring the benefits (90% of the analysed projects)than contract construction projects. In contractconstruction projects the competitive advantages andproject control are not taken into excessiveconsideration because most of these projects involvetendering.

- In whatever contractual arrangement, the factors suchas the definition of the objectives (P 31) the methodsto evaluate results (P 32), the capacity of theorganisation to support the project (P 33) and therevision of the project (P 34) are deeply considered.

- Few of the studied projects developed a detailedplanning of resources and a plan of cost for the tenderstage (P 36) but when talking about the planning ofresources and a plan of cost for the whole project (P37) the percentage increases a lot. This means thatmost of the companies make plans of resources andcost for the projects but not for detailed stages of theproject. If considered separately, in lump sum projectsonly 70% of the companies plan resources and costswhereas in contract construction projects, allcompanies do. Therefore, it is possible to infer thatcompanies are more convinced of their internalmanagement and functioning than to subcontractthe work in which they try to control it by definingthe plan of resources and costs of the project.

Referring to the Project related factors:- The definition of the project is considered very

important in whatever contractual arrangement along

91

7. Results and discussion

Despite evaluating few case studies, each projectwas analyzed and compared with the other results inorder to obtain general behavior of the IndustrialConstruction sector and rules of success and failure fordifferent contractual arrangements. Therefore, theconclusions are based on comparative and qualitativeanalysis due to the lack of homogeneity in the sample.

Basically, between lump sum and contractconstruction and between bidding and negotiationscontracts there are general differences.

In the lump sum contractual arrangement, theclient has a direct contractual relationship with most ofthe participants and the owner retains the maximumamount of control and monitoring the benefits.

On the other hand, in contract constructionprojects the owner delegates all the responsibilities ofdesign and construction to outside consultants. In orderfor a contract construction to succeed, the owner mustbe able to provide a set of unambiguous performancespecifications to the contractor and must have completeconfidence in the capability of the contractor to carry outthe mission. In this kind of projects the contractor isresponsible of the project and should develop a detailedplanning of time, costs and resources to achieve theowner’s objectives.

The owner may also select a general contractoreither through competitive bidding or through negotiation.Public agencies are required to use the competitive biddingmode, while private organizations may choose eithermode of operation. In using competitive bidding, theowner is forced to use the designer-constructor sequencesince detailed plans and specifications must be readybefore inviting bidders to submit their bids.

Overall, it was observed that during the designand construction stages, almost all success factors weretaken into account. This means that for whatevercontractual arrangement not only the construction stagebut also the first stages are very important and relevantto achieve the core objectives of the project.

In relation to the Project Management factors:- The areas related to the business necessities and

support to the proposal are always taken intoconsideration, from the beginning of the conceptualstage until the finalization of the project. Rigor in theanalysis of the conception stage can lead to greatsavings in the construction and finalization stages.However, in bidding projects the conceptual studies(P 4, 5, and 6) and the finalization stage (P 54, 55and 56) are less strict and there is a lack of rigor in



92

all the stages of the project (P 1 and 2 from theconceptual stage, P 10 and 11 from the planningstage, P 21 and 22 from the design stage, P 35 fromthe tender stage and P 45 from the construction stage).

- Generally, the existing risks are not detected andstudied in the first stages of the project (P 26).Normally, the risks should be analyzed in the initialstages, but from the studied projects it is deducedthat they are not analyzed until the project is at anadvanced stage.

- Lump sum contract projects give more importance tothe project characteristics such as the nature,complexity, type and size than contract constructionprojects.

From the External environment factors:- All parameters related to the financial and technical

parts of the design stage (P 27, 28, 29 and 30) areconsidered important in all kind of contractualarrangements.

- For the finalization stage, the economical and budgetaryanalysis (P 56 and 58) is very important. All analyzedprojects have the budgetary part of the project closedand are economically examined.

- Bidding projects consider the current resources andtechnology (P 9) with greater rigor (100% of theanalyzed projects) while in negotiated projects, thetechnological capacity of the team in the conceptionstage can be overestimated due to a lack of definition.

In relation to the tendering method factors:- In all projects, once the main contractor is selected

the other parts of the tendering process are drawnaside.

Concerning the Human related factors:- Client satisfaction is considered very important but in

most of the analyzed projects the checklists for clientsand users, although they can help to obtain objectiveevaluations about the work done, are not taken intoaccount. Sometimes, the lack of definition of theclient satisfaction might be due to the fact that insome projects the user is still unknown or it is difficultto evaluate the client satisfaction.

- In whatever contractual arrangement the capacity ofthe organization to support the project and theacceptance of the project is defined as very important.

- The monitoring of the benefits of the project and howto measure them (factors 54 and 55) are consideredin nearly all lump sum projects (90%). In contract


construction projects, they are not emphasizedbecause there is no team involvement (none of theexternal analyzed projects assigned a person tomonitor the financial part of the project). Thefinalization stage of contract construction projectscan be prolonged in time while in lump sum projectsthe closing of the project is established previously.

Generally, the results of this SFES obtained aboveagree with the impressions obtained from personal contactswith the people in charge of these projects.

8. Conclusions

This paper has analyzed different classificationschemas to classify critical success factors with the aimto develop a methodology to evaluate projects and extractconclusions from the characteristics in IndustrialConstruction projects using different contractualarrangements.

An existing theoretical model (Chan et al., 2004)was used as a basis for the evaluation. Therefore, one ofthe objectives was to validate this theoretical model intoIndustrial Construction Projects.

From this analysis, we observed that such ageneric model was suitable for Industrial ConstructionProjects with different contractual characteristics.

We also observed that in Industrial Constructionprojects, not only the construction stage is where thesuccess of the project is achieved. Therefore, althoughthe construction stage has been the focus of many studies,the first stages are decisive for the success on the wholeproject. It is during the construction stage that the demandsfor time, cost and quality requirements become mostacute. In practice when a project comes to the constructionstage, all the past inadequacies of every preceding stageappear and everything must be done within the scheduleand budget given. We must therefore be aware that thereare important issues that must be properly addressed inthe preceding stage.

Furthermore, it can be observed from theanalyzed experiences that the degree of effectiveness ofthe project management functions and the degree ofsuccess of the human related factors in IndustrialConstruction projects in Spain are very relevant for thesuccess of the project. Therefore, research and developmentshould focus on systems aimed to improve projectmanagement such as communication, planning ormonitoring systems.


Gann D. and Whyte J. (2003), Design quality, itsmeasurement and management in the built environment.Building Research & Information, 31:5 (314-317)

Kumaraswamy M. and Chan D. (1999), Factors facilitatingfaster construction. J. Constr. Procure., 5: 2, 88–98.

Lim C. and Mohamed M. (1999), Criteria of projectsuccess: An exploratory re-examination. Int. J. Proj.Manage., 17: 4, 243–248.

Maloney W. F. (1990), Framework for analysis ofperformance. J. Constr. Eng. Manage., 116: 3, 399–415.

Newcombe R. (2000), The anatomy of two projects: Acomparative analysis approach. Int. J. Proj. Manage.,18: 3, 189–199.

Özdogan I. and Birgönül M.T. (2000), A decision supportframework for project sponsors in the planning stageof Build-Operate-Transfer (BOT) Projects. ConstructionManagement and Economics, 18, p.343-353.

Pinto J. and Prescott J. (1990), Planning and tacticalfactors in the project implementation process. J.Management Studies, 305 –325.

Pinto J. and Slevin D. (1989), Critical success factors inR&D projects. Res. Technol. Management, pp. 31–35.

Pocock J., Liu L. and Tang W. (1997a), Prediction ofproject performance based on degree of interaction. J.Manage. Eng., 13: 2, 63–76.

Pocock J., Liu L. and Kim M. (1997b), Impact ofmanagement approach on project interaction andperformance. J. Constr. Eng. Manage., 123: 4, 411–418.

Riggs J., Goodman M., Finley R. and Miller T. (1992), Adecision support system for predicting project success.Proj. Manage. J., 22: 3, 37–43.

Rubin I. and Seeling W. (1967), Experience as a factor inthe selection and performance of project managers.IEEE Trans. Eng. Management, 14 (3) 131–134.

SEOPAN (2007), La construcción en 2006. Resultadosdel sector de la construcción 2006. Observatorio delsector de la construcción.

Schultz R., Slevin D. and Pinto J. (1987), Strategy andtactics in a process model of project implementation.O Interfaces, 17(3) 34–46.

Songer A. and Molenaar K. (1997), Project characteristicsfor successful public-sector design-build. J. Constr. Eng.Manage., 123: 1, 34–40.

Shenhar A., Levy O. and Dvir D. (1997), Mapping thedimensions of project success. Proj. Manage. J., 28: 2,5–13.

Walker D. (1995), An investigation into construction timeperformance. Constr. Manage. Econom., 13: 3, 263–274.

Walker D. and Vines M. (2000), Australian multi-unitresidential project construction time performance factors.Eng., Constr. Archit. Manage., 7: 3, 278–284.

93

Moreover, the project manager experience and theknowledge of the different stakeholders are also criticalfor the success of Industrial Construction projects.Academics should work to provide the necessaryknowledge and basically project management techniquesto the future professionals of the construction sector.

It is expected that this analysis will serve as abasis for improving current practices in IndustrialConstruction projects and for informing those companies,who are interested in getting into the Spanish market, ofthe characteristics and current situation of such specialisedsector.

9. References

Avots I. (1969), Why does project management fail?California Management Review, 77–82.

Baker. B, Murphy D. and Fisher D. (1983), Factors affectingproject success. Project Management Handbook, VanNostrand Reinhold Co., New York

Belassi W. and Tukel O. (1996), A new framework fordetermining critical success/failure factors in projects.Int. J. Proj. Manage., Vol. 14, No. 3, pp. 141–151.

Belout A. (1998), Effects of human resource managementon project effectiveness and success: toward a newconceptual framework. Int. J. Proj. Manage., 16: 1,21–26.

Brown A. and Adams J. (2000), Measuring the effect ofproject management on construction outputs: a newapproach. Int. J. Proj. Manage., 18: 5, 327–335.

Chan A. (1996), Determinants of project success in theconstruction industry of Hong Kong. PhD thesis, Univ.of South Australia.

Chan D. and Kumaraswamy M. (1997), A comparativestudy of causes of time overruns in Hong Kongconstruction projects. Int. J. Proj. Manage., 15: 1, 55–63.

Chan A. P. C., Scott D. and Chan A. P. L. (2004), Factorsaffecting the success of a Construction Project. J. Constr.Engrg. and Mgmt., 130: 1, 153-155.

Chua D., Kog Y. and Loh K. (1999), Critical success factorsfor different project objectives. J. Constr. Eng. Manage.,125: 3, 142–150.

Clough R. H., Sears G. A. and Sears S. K. (2000),Construction Project Management. 4th edition, JohnWiley and Sons..

Dissanayaka S. and Kumaraswamy M. (1999), Evaluationof factors affecting time and cost performance in HongKong building projects. Eng., Constr. Archit. Manage.,6: 3, 287–298.

Freeman M. and Beale P. (1992), Measuring projectsuccess. Proj. Manage. J., 23: 1, 8–17.



experiences of success in industrial plants projects ... · getting feedback to improve project...

Documents