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This paper presents a method to quantify the time and cost impacts on Engineer, Procure, and Construct (EPC) projects resulting from information management driven process changes to the design process. Many engineering and construction companies have implemented information technologies and other changes, fully expecting to save time and cost, gain competitive advantage, improve productivity, better align project objectives, and improve product quality. Previous efforts to quantify benefits have been function or technology specific. The method described herein illustrates the value of evaluating process improvement strategies at the project level to avoid misleading conclusions regarding the actual benefit of investments. The research results strongly suggest that information management strategies applied to the design process may substantially improve total project performance.

In large part, success in engineering and construction is measured by how firms effectively manage change. New systems, often created in response to competitive pressures in the marketplace, create change, often with unpredictable, or even undesirable results. Managing change, and predicting the ultimate impacts on work processes, is as important as managing any other aspect of the business enterprise. Today's leading edge organizations will only remain leaders in the future if they proactively, and continuously, improve their work processes to meet the advancing capabilities of competitors, and the changing expectations of their customers. It is therefore critical for the engineering industry to have the ability to evaluate potential work process changes to ensure that they produce desired results, improving the effectiveness and/or efficiency of corporate operations. Companies within the engineering and construction industry have begun efforts to implement many forms of strategic change, including strategies for partnering, standardization, and electronic exchange of information. Unfortunately, justification for making these changes has primarily been qualitative. As a result, the likely impact to such quantitative measures as project cost and schedule is frequently unknown until after the process changes are already in place. In some cases, the resulting project impacts may not be known until after projects are fully executed. It is undesirable for the implementation of a work process modification, or any form of strategic change, to result in surprise consequences to the organization. Process changes are intended to improve, not hinder, the organization's ability to perform. To date, a satisfactory method to quantify, and predict, the project level impacts of proposed process change has not been developed. This is undoubtedly due, at least in part, to the difficulty in capturing the performance variability inherent in executing construction engineering projects. By their nature, engineering, procurement, and construction (EPC) projects are typically complex, multidisciplinary and costly, constituting a major capital investment by owner companies. Such projects vary in scope, design, and execution strategy. As a result, the individual activities that comprise the design and construction work processes are themselves highly variable from project to project. The ability to predict, and quantify, the time and cost impact of any proposed work process change improves the likelihood of meeting, or exceeding, project performance criteria. Without such an ability, work process modifications may have unknown, or possibly even adverse, project impacts. To correctly evaluate the time and cost impacts of proposed work process changes, the EPC process must be examined holistically. Failure to look at the entire EPC process, despite the multiorganizational complexity, can only result in suboptimization, as firms institute a piecemeal, discipline specific, approach to process improvement. Organizations must be alert to the potential for reaching misleading conclusions regarding time and cost savings that accrue from process improvement strategies when the analysis has failed to extend beyond a subprocess level of the project. In response to these needs, this paper presents a method to quantify the time and cost impacts that are likely to result from proposed work process modifications. Such modifications may be driven by technological or organizational change. As a case study example, this paper summarizes a research project that evaluated the potential time and cost impacts that may result from strategically implementing information management strategies in the design phase of an EPC project.

As the histogram and related statistics indicate (see Fig. 8 and Table 6, respectively), the improvement from present to path forward for the project is substantially less than the improvement of any one of the individual activities from present to path forward. The calculated reductions are shown in Table 7.Many of the individual tasks that were modified were estimated to improve by over 90%. Yet, at the individual activity level, the average improvement was only 25, 29, and 14% for the mean elapsed time, activity time, and activity cost, respectively. At the broader project level, the improvements were again substantially lower than those observed at an activity level, with no performance measure indicating a reduction greater than 5%. This strongly demonstrates the value of quantifying changes at the project level rather than performing an analysis strictly at the subprocess level. Although Fig. 3 indicates that the design activities consume a greater percentage of project cost than project time, Table 7 indicates that the impacts of design changes were more significant in terms of project time than cost. This is in spite of the fact that similar changes were made to the time and cost data values for each task that was modified. These results may at first appear to be counter-intuitive. However, when one recalls that the values in Table 7 were influenced not only by time and cost data but also by activity dependencies, the results are entirely logical. This further emphasizes the need to quantify the impact of change in a project level model that incorporates the inter-relationships at the activity level. Evaluating work process improvements at the functional or discipline level of the EPC process may yield misleading conclusions. These results demonstrate the ability to predict and quantify the impact of design process changes on total project cost and time. This study also helps to explain the reason why many companies claim they are not realizing project level benefits when improvements to a given subprocess are so readily apparent and easily identified. As this case study has illustrated, analyzing the design portion of the project, without considering its interaction with and dependencies on other phases, may lead to inaccurate and overly optimistic expectations for project savings. Expectations can be improved, and managed, by investigating the project execution process holistically, even if changes are only contemplated for a few key activities.