School of Business and Law

Wednesday, 26 June 2024

New research from ECU School of Business and Law shows that following clear success criteria greatly increases the likelihood of success for medium and large-scale construction projects.

Inspired by this research, Lecturer Dr. Neda Kiani Mavi created a machine learning-based decision support system to predict the success of construction projects using key success factors and criteria.

“There is a need to clearly define and determine success factors and success criteria for construction projects to make project success measurement possible,” said Dr Kiani Mavi.

Dr Kiani Mavi’s research outlines 19 success criteria in five groups: project efficiency, business success, impacts on end-users, impacts on stakeholders, and impacts on the project team. She emphasised the importance of project efficiency, especially effective risk management, which helps organisations handle risks through strategies like resource reallocation.

The study revealed that large construction projects over $200 million often go over budget by over 30%. About 77% of these projects also get delayed by over 40% because of poor risk management. But, if managed well, construction companies can still make good profits in margins of 20% to 30%.

The construction industry is a cornerstone of the global economy. In Australia, it makes up about 20% of the country's GDP, which is over $2.85 trillion.

The Australian Construction Industry Forum (ACIF) predicts a 5% growth in the building and construction sector for 2023-24, bringing the value of ongoing projects to $298 billion. This is a positive outlook, but the industry still faces big challenges like high inflation, high-interest rates, and changing work rules.

“Despite its vital role in the economy, the construction industry faces numerous challenges that significantly impact its success. The inherent complexity and uncertainty of construction projects make them difficult to manage, even for experienced project managers,” Dr Kiani Mavi noted.

Australia’s construction sector struggles with stagnant productivity growth and increasing risk management pressures. Over the past 30 years, this has led to about $47 billion in lost opportunities.

The 2023 KPMG Global Construction Survey showed that 87% of project managers have trouble with project performance, often facing delays and cost overruns. Only 50% of project owners finish on time, mainly due to good risk management strategies.

Dr Kiani Mavi’s decision support system analyses the interrelationships among critical success factors and criteria of construction projects to predict project success. Using this system early can help prevent delays, cost overruns, and other issues.

“When stakeholders understand whether a project is more or less successful than previous similar projects, they can address weaknesses and enhance strengths to improve project outcomes in terms of schedule, budget, scope, quality, and stakeholder satisfaction,” Dr Kiani Mavi added.

“Successful projects lead to satisfied clients, enhanced reputations for companies, and increased profitability. Conversely, project failures can result in financial losses, legal issues, and damage to a company’s reputation. Understanding and achieving project success is crucial for sponsors who aim to control both current and future projects. Thus, forecasting project success is not just beneficial but essential for the industry.”

With better tools and smarter strategies, the construction industry is poised to overcome the challenges it faces. Innovative solutions like Dr Mavi’s system will help lead to more successful projects, benefiting everyone involved and driving economic growth.