Setting industry standards10 August 1998
A benchmarking programme allows construction companies to find out how they compare with the industry’s best. For owners, the programme provides a yardstick against which the performance of contractors can be measured, Janet Wood reports
Institute members who join the benchmarking programme nominate one member of staff to collate the information to be submitted and act as a point of contact. Members may submit information on any number of projects; for each, the contact person completes a questionnaire and sends the information to the Construction Industry Institute (CII) or European Construction Institute (ECI). One concern is to ensure that the information is in a form suitable for incorporation. To reduce the possibility for error the contact employee receives training from the relevant Institute on methodology and on how to submit information. Inconsistencies and subjectivity are also eliminated by limiting answers on the questionnaire to yes or no.
Completing the questionnaire does, of course, involve an investment in time for the member — estimated at around 2-3 hours for each form, plus the time required to gather the data. Using a single employee to complete the forms therefore also allows the time investment to be minimised. The form covers around 41 areas of questioning, with around 200 sub-sections. At present the form is focused around benchmarking, in terms of cost, schedule, safety and customer satisfaction, and incorporates the following good practices:
•Project change management.
•Scope definition and control.
•Design and information technology.
The information is submitted to ECI or CII and undergoes a pre-analysis to remove inconsistent data.
Confidentiality is also a concern: few companies would wish the detailed information submitted to the Institute to be available in its raw form to competitors. Entries are therefore coded at the Institute to ensure they cannot be identified; when the ECI information is passed to the CII database it is coded again.
Using the data
Companies participating in the benchmarking programme receive:
•An annual benchmarkng report containing detailed aggregated results of the entire analysis.
•A summary of the overall findings.
•A confidential company report for each project which allows the company to relate project performance to the norms, and identify areas with opportunity for improvement.
The reports take several forms. In one form the industry norms and trends are identified, and the company’s position relative to those norms is identified. In a second form, project performance is measured with regard to cost, schedule and safety. The performance of the company in these areas is related to its use of the various best practices. For each, results are split into four quartiles to give a more detailed reading of the data. Using a key, each company can compare its own performance at specific projects with industry norms.
The detailed nature of the information supplied to the database means that up to 10,000 correlations of this type could potentially be addressed, according to Ivor Williams, who is operations director of the ECI and executive director of its benchmark programme steering committee. In the future these correlations will be able to supply a still-larger range of feedback options, he says. However, at present, the database is not large enough to provide data in all the correlations that has the required depth of statistical support.
The benchmarking programme provides a useful tool to companies wishing to improve their performance, Williams said, but he agreed that such a powerful tool would offer other benefits in future. In one important aspect of its use it would be able to meet some of the needs of owners.
Using the benchmarking programme, owners who wish to embark on a large-scale construction project such as a dam would be able to obtain information about industry norms in a number of benchmarking categories. This would give owners a useful guideline on what to expect when employing contractors. Such guidelines, for example, might help owners and contractors quickly to agree on target dates and costs for a project. Williams noted that the CII had already made generalised data and targets publicly available.
There will also be opportunities to extend the database and make it more useful for users, Williams noted. The CII and ECI are already considering extending the eight benchmarking practices currently under examination to 13, he said.
To extend the reach of the database they aim to include projects from outside their regions. Some projects from Japan and from South America are already represented on the database: projects from Australia are due to be added in 1998, and the addition of Asian projects is currently under discussion.
Williams identified an exciting opportunity in ‘process benchmarking’. At present the database records data on closed out (ie completed) projects. Williams would like to see the initiative extended so that companies can provide data on projects that are still under way. When feedback is received from the database it can be used immediately to improve planning and execution of the project.
|Construction institutes in the UK and US|
|The Construction Industry Institute was founded in 1983 and is based at the University of Texas in Austin, US. It has around 80 members, comprising owner and contractor organisations (fairly even numbers of each) based in the US. Contact: CII, 3208 Red River Street, Suite 300, Austin, TX78705-2650, US. Tel: +1 512 471 4319, fax: +1 512 499 8101. The European Construction Institute was founded in 1990 and is based at Loughborough University in the UK. It currently has 60 members who are Europe-based owner and contractor organisations. Contact: Jo Badge, ECI, Arnold Hall Building, Loughborough, Leicestershire LE11 3TU, UK. Tel: +44 1509 222620, fax: +44 1509 260118. Organisations operating in both regions may join both institutes.|