Determining the Impact of Information Management on Project Schedule and Cost

It is standard practice within the construction engineering industry to identify specific project activities which are critical to achieving project performance objectives. Many such activities undoubtedly require exchange of information. This information exchange may be an internal/departmental process, or it may be external to the organization. It is often impractical to document activity logic at such a “micro” level that “information exchange” elements would be identified and tracked. However, each time information is exchanged, project time is expended and project resources are consumed.

To date, a methodology has not been developed for the construction industry to examine the potential contribution of information management technologies in efforts to reduce overall project schedule and cost. The inability to quantify the process improvements resulting from information management technologies is a key barrier to their full implementation. An additional problem is that studies completed to date have typically focused on only one portion of the project delivery process or are technology specific. Without examining the process holistically, it is impossible to determine the impact that process changes have had on final project performance, i.e., from a “macro” level perspective.

Determining the extent to which information management and data exchange activities actually affect overall project schedule and cost is in itself a “breakthrough” deliverable. This research provides a methodology to quantify the potential savings that may accrue at critical information exchange points within the engineer/procure/construct (EPC) process. Project cost and schedule reductions result from improving internal processes, improving information exchanges external to the organization, or both. Improvements to information management also enhances project quality.

The Information Management Research Team (RT-125) was originally formed to measure the potential impact of information intensive tasks on the ability to meet or exceed project performance criteria for schedule and cost. The goal was to examine the design and construction process comprehensively. Improving only a subset of activities within the EPC process may have unknown effects on the overall process. Predicting the time and cost impacts likely to result from proposed improvement strategies is a major undertaking because of the complex interactions. Providing appropriate implementation tools to the construction industry to accomplish this task was the ultimate purpose of this research.

The research objectives are briefly summarized as follows:

• Identify the principal activities that commonly occur in EPC projects in an hierarchical structured format.
• Document the duration (time) and resource (cost) requirements for each activity.
• Present a network logic of how these activities are commonly related.
• Present an interactive computer simulation model that enables quantification of time and cost performance.
• Provide a methodology for predicting the impact of proposed process changes on project schedule and cost using a flow diagramming and simulation modeling approach.
• Provide generic logic diagrams (with associated time and cost data) that illustrate the decomposition of many critical activities of the EPC process into a finer level of detail for process improvement analysis.