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International Journal of Project Management 28 (2010) 228236

www.elsevier.com/locate/ijproman

Beyond the iron triangle: Stakeholder perception of key

performance indicators (KPIs) for large-scale public sector
development projects
Shamas-ur-Rehman Toor a,*, Stephen O. Ogunlana b,1
a
Faculty of the Built Environment, University of New South Wales, Sydney, NSW 2052, Australia
b
School of the Built Environment, Heriot-Watt University, Edinburgh, EH14 4AS, United Kingdom

Received 9 February 2009; received in revised form 10 May 2009; accepted 14 May 2009

Abstract

Performance measurement criteria vary from project to project. Despite much work on the subject, there is no commonly agreed
framework of performance measurement on mega projects. To bridge this gap, this research targets to investigate the perception of
the key performance indicators (KPIs) in the context of a large construction project in Thailand. The study explores the signicance
of key performance indicators in perspective of various construction stakeholders (client, consultants, and contractors). Findings indicate
that the traditional measures of the iron triangle (on-time, under-budget and according to specications) are no more applicable to mea-
suring performance on large public sector development projects. Other performance indicators such as safety, ecient use of resources,
eectiveness, satisfaction of stakeholders, and reduced conicts and disputes are increasingly becoming important. This implies that the
Thai construction industry is slowly departing from the traditional quantitative performance measurement to a rather mix of both quan-
titative and qualitative performance measurement on large-scale public sector development projects.
2009 Elsevier Ltd and IPMA. All rights reserved.

Keywords: Project performance management; Large construction projects; Key performance indicators (KPIs); Thai construction industry

1. Introduction cess. Cox et al. (2003) note that the perception of project
success may even vary according to managements perspec-
Project success means dierent to dierent stakeholders. tive. They ascertain that there is a substantial dierence
A project that may seem successful to the client may be a between the perception of construction executives and pro-
completely unsuccessful venture for contractors or end ject management about KPIs. It is, therefore, not surpris-
users (Toor and Ogunlana, 2008). Invariably, stakeholders ing that dierent participants think dierently while they
have distinct vested interests in a particular project and analyze the performance of a project (Cox et al., 2003).
therefore the perception of success may also vary across To clarify some ambiguities related to the scale of pro-
various stakeholders (Bryde and Brown, 2005). Particu- ject success, Lim and Mohamed (1999) argue that there
larly, in case of public development projects, where number are two possible viewpoints: macro-level success and
of stakeholders usually large, it is important to assimilate micro-level success. The macro viewpoint takes care of
the viewpoint of all interest groups about the project suc- the question does the original concept tick? Usually the
end users and project beneciaries are the ones looking at
*
project success from the macro viewpoint. The micro view-
Corresponding author. Tel.: +61 2 9385 6377; fax: +61 2 9385 4507.
E-mail addresses: [email protected] (S.R. Toor), S.O.Ogunlana
point concerns the construction parties such as consultants
@hw.ac.uk (S.O. Ogunlana). and contractors. Furthermore, micro success pertains to
1
Tel.: +44 131 451 3161. traditional triangle of whether the project is on time, within

0263-7863/$36.00 2009 Elsevier Ltd and IPMA. All rights reserved.

doi:10.1016/j.ijproman.2009.05.005
 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236 229

budget, and according to specications. Briey, macro suc- level, as the extent to which projects meet a combination
cess is more concerned about the eventual operation/func- of budget, timetable and technical specications. Savindo
tions or long-term gains of the project; whereas micro et al. (1992) relate the success of a project to the expecta-
success pertains to protability or short-term gains. tion of its participants which may be owner, planner, engi-
Cookie-Davies (2002) also oers a distinction between neer, and contractor or operator. According to Munns and
project success which is measured against the overall Bjeirmi (1996), a project can be considered successful when
objectives of the project and project management success it is able to achieve some specic objectives; have denite
which is measured against the widespread and traditional start and end dates; and is completed within a specied
measures of performance against cost, time, and quality. time period and according to a set specication. Nguyen
Cookie-Davies (2002) also highlights the dierence between et al. (2004) also support the traditional perspective that
the success criteria and success factors. Success factors are a construction project is successful when it is completed
those which contribute to achieving success on a project. on time, within budget, in accordance with specications
On the other hand, success criteria are the measures by and to stakeholders satisfaction.
which the success or failure of a project will be judged. Fac- To explain how project performance is associated with
tors constituting the success criteria are commonly referred project process, Toor and Ogunlana (2008) present a con-
to as the key performance indicators or KPIs. Cox et al. ceptual model in which they divide project management
(2003) observe that the KPIs are helpful to compare the into process domain and performance domain. Process
actual and estimated performance in terms of eectiveness, domain deals with project objectives, devising an adequate
eciency and quality of both workmanship and product. project management system, and delivery of product dur-
In short, success factors are the eorts made or strategy ing input, process, and outcome stages, respectively. On
adopted to achieve the success on project. Whereas, KPIs the other hand, performance domain focuses on perfor-
are the compilations of data measures (either by quantita- mance goals, establishment of performance enhancement
tive or qualitative data) used to access the performance of strategy, and performance measurement during input, pro-
the construction operation. cess and outcome stages, respectively. Toor and Ogunlana
Despite extensive research, there is no general agreement (2009) note that performance measurement can be carried
on a set of KPIs for construction projects to-date (Chan out by establishing KPIs which oer objective criteria to
et al., 2004). Therefore, there is need for identifying a set measure the success of a project.
of common indicators to be used by construction executive Performance measurement in construction project has
and project managers in measuring construction perfor- been dominated by the conventional measures of time,
mance at the project level (Cox et al., 2003). However, it cost, and quality. Atkinson (1999) termed these three mea-
seems dicult as every project has certain unique features sures together as the iron triangle. Despite the simplistic
and limitations and therefore generalizing the taxonomy nature of performance measurement through the iron tri-
of KPIs for all kinds of projects looks fairly impractical. angle, practice, and research have departed from this
Regardless of these limitations, it is important to compre- approach and new direct and indirect measures are being
hend the perception of KPIs on dierent types of projects employed for project performance measurement. For
carried out in dierent contexts. Such research endeavors example, Low and Chuan (2006) argue that the measure
are helpful in sharing the lessons learnt on dierent projects of project success can no longer be restricted to the tradi-
and to expand the existing taxonomies of KPIs for future tional indicators which include time, cost, and quality.
projects. They advocate the expansion of success measurement
Considering these implications of research on project towards project management success or product success
performance management, the current research attempted or both. This dierentiation of success criteria is also sug-
to achieve the following objectives: gested by various scholars who believe that project success
is dierent from project management success (see: Cookie-
1. to capture the perception of various stakeholders Davies, 2002; Shenhar et al., 1997).
(client, consultants, contractors) about KPIs on mega Other researchers suggest that in addition to the mea-
construction projects, sures of iron triangle, customer satisfaction (Pinto and
2. to investigate if the perception of KPIs diers across: Slevin, 1988) and overall satisfaction of stakeholders
a. various construction stakeholders, (Bryde and Brown, 2005) should also be considered in
b. rms working independently and in joint ventures, performance evaluation criteria. Some have also given the
and notion of project teams ability to manage project risks
c. various levels of professionals overall experience and resolve problems encountered on the project to
and experience as project managers. evaluate the project success (Belout and Gauvreau, 2004).
Study of Freeman and Beale (1992) reveals that ve most
2. Literature review frequently used criteria to measure project success include:
technical performance, eciency of execution, managerial
Phua (2004) is of the view that multi-rm project success and organizational implications, personal growth and
can be dened and measured, at least at the operational manufacturers ability and business performance.
230 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236

In another study of professionals at dierent managerial implications of the project, the SBIA makes a very unique
levels, Cox et al. (2003) dierentiates between quantitative project in Thailand.
and qualitative measures of success. Their quantitative per- Through literature review and preliminary interviews
formance indicators include Unit/MH, $/unit, cost, on with academic researchers and industry experts, a catalog
time, resource management, quality control, % complete, of 9 KPIs was prepared in form of a questionnaire. This
earned man-hour, lost time accounting, and punch list. questionnaire was distributed among project managers,
Most of these measures also appear in the estimating/cost- deputy project managers, and line managers on the project
ing systems utilized by the majority of construction rms. site of the Suvarnabhumi Airport. The survey was con-
Qualitative performance indicators of Cox et al. (2003) ducted during 20042005 while the airport was still in its
include safety, turn-over, absenteeism, and motivation. construction stage. Respondents were asked to rate each
However, Cox et al. (2003) also acknowledge that qualita- KPI based on their professional judgment on a given 5-
tive indicators are not considered as highly reliable perfor- point Likert-type scale (where 1 = not important at all,
mance and productivity evaluation tools due to their 2 = not necessarily important, 3 = important sometimes,
perceived diculty and/or inability to be measured. 4 = important, and 5 = extremely important). A total of
Turner (1993) note the following criteria to measure the 80 questionnaires were personally delivered to the respon-
success of projects: the facility is produced to specication dents, together with a covering letter explaining the pur-
within budget and on time; the project provides a satisfac- pose of the study and assuring them of anonymity.
tory benet to the owner; the project achieves its stated Respondents were also sent an e-mail from the client orga-
business purpose; the project meets pre-stated objectives nization to cooperate with the research team and to
to produce the facility; the project satises the needs of pro- respond to the questionnaire. This endorsement of the cli-
ject team and supporters; the project satises the needs of ent resulted in a high response rate and out of total 80
users; and the project satises the needs of stakeholders. questionnaires, 76 were collected back. This yielded a
In addition to the conventional measures of cost, time, response rate of 95%.
quality, and scope, Westerveld (2003) emphasizes the fol- In addition to the questionnaires, face-to-face interviews
lowing KPIs: clients appreciation; project personnel were also conducted with 35 respondents of questionnaires
appreciation; users appreciation; contracting partners who agreed to spare time for interview. The interviewees
appreciation; and nally stakeholders appreciation. were mostly project managers (12), deputy project manag-
In a study of micro-projects projects having a total ers (8), and senior line managers (15). It is obvious from
cost of less than $15,000 in the developing countries, their designation that interviewees had extensive experience
Sohail and Baldwin (2004) oer 67 performance indicators of project management and the majority of them had pre-
for monitoring of micro-contracts. These indicators are viously worked as project manager on construction pro-
divided into general indicators (such as number of dis- jects. During the interview, various questions regarding
putes or incidences of delay in the supply of materials, KPIs on large-scale development projects were asked.
and tools and plant), time indicators, cost indicators, qual-
ity indicators, indicators for inter-organizational co-opera- 4. Background of respondents
tion and partnership, and nally, indicators related to
socio-economic issues (such as enterprise development, Tables 15 provide demographic details of the subjects
poverty alleviation, and empowerment). who participated in this study. Most of the respondents
Literature review shows that the performance measure- (over 75%) were working in joint ventures of project orga-
ment of construction projects is slowly moving away from nizations. Few were working in consortiums (12%) and
the traditional measures (such as cost, time, and quality) even fewer were working in their parent organizations
towards a rather mix of quantitative and qualitative mea- (11.5%). Almost half of the respondents were project man-
sures. In the current study, an attempt is made to capture agers, deputy project managers, and construction manag-
the perception of construction project leaders about a ers. Others were holding the designation of line managers
mix of dierent quantitative and qualitative KPIs for
large-scale public sector development projects.
Table 1
Respondents experience in project management.
3. Research method
Experience In project management As project manager
In order to achieve the research objectives stated above, <5 years 13 27
an empirical investigation was carried out on the Second 610 Years 18 21
1115 Years 13 11
Bangkok International Airport (SBIA) or Suvarnabhumi
1620 Years 18 8
Airport, a mega construction project in Thai construction 2125 Years 8 7
industry. Due to its volume, budget, complexity, excessive 2630 Years 4 1
delays, diversity of stakeholders, involvement of several 3135 Years 1 1
local and international construction rms, and keen inter- 3640 Years
4145 Years 1
est of the government due to future business and strategic
 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236 231

Table 2 Table 4
Prole of the respondents. Nationality and native languages of respondents.
Group Project Deputy project Project Line Total Country of origin Language of origin No. of respondents
manager manager engineer manager responses
Czech Republic Czech 1
CR 1 1 2 3 7 England English 12
PMC 1 1 8 10 Indonesia Indonesian 1
CSC 7 7 4 20 36 Japan Japanese 5
DC 2 3 5 The Netherlands Dutch 3
CC 3 2 1 10 16 New Zealand English 2
Pakistan Urdu 1
Total 14 11 7 44 76
Thailand Thai 46
Note: CR, Client Representative; PMC, Project Management Consul- USA English 4
tants; CSC, Construction Supervision Consultants; DC, Design Consul- Venezuela English 1
tants; CC, Construction Contractors.
Total 76

(quality control manager, contracts manager, design man-

ager, designer coordinator, and site manager etc.). As all Table 5
the respondents were professionally positioned at manage- Type of organization.
ment level or higher, a certain level of accuracy in the data Type of organization Frequency
collected was assured. Further, respondents had consider- Independent 9
able experience both in the eld of project management Joint venture 57
as well as project manager. Participants in this study were Consortium 10
divided into ve groups: CR (Client/Developer Represen-
tatives), PMC (Project Management Consultants), CSC
(Construction Supervision Consultants), DC (Design Con-  Overall experience in project management.
sultants), and CC (Construction Contractors).  Experience as project manager.
Moreover, more than 80% of the respondents had edu-
cational background of civil engineering. Others held pro- Results of ANOVA in Table 6 show that respondents
fessional degrees in mechanical engineering, electrical have no signicant dierence in their opinion on the rating
engineering, commerce, computer sciences, and social sci- perceptions of KPIs when they are tested for overall expe-
ences. Respondents belonged to over 10 nationalities and rience in project management and experience as project
spoke more than ve dierent native tongues. Majority of manager. However, clear dierence in rating perceptions
the respondents spoke English as their second language. are observed when type of the organization is controlled.
Most of the respondents (over 75%) were working in joint At condence level of 90%, statistically signicant dierence
ventures of project organizations. Few were working in is observed in rating perception for one time (KPI1),
consortiums (12%) and even fewer were working in their under budget (KPI2), and doing the right thing (KPI5).
parent organizations (11.5%). At condence level of 95%, statistically signicant dierence
in rating perception is notable for meets the specications
5. Analysis of variance (ANOVA) (KPI3) as well when type of organization is controlled.
This illustrates that various construction-related stake-
Internal reliability analysis produced a Cronbachs holders (client, consultants, and contractors) have substan-
alpha value of 0.85. This high value conrmed the internal tially dierent perception for traditional KPIs (such as on
reliability of KPI catalog (Santos, 1999). Analysis of vari- time, under budget, and meet the specications). However
ance (ANOVA) was performed to ascertain if various they tend to agree on most qualitative measure of project
respondent groups had a general agreement in opinion or performance (such as safety, minimized disputes, and
not. This comparison of means was carried out by dividing stakeholders expectations).
the respondents into dierent groups based on the follow-
ing categories: 6. t-Test results

 Type of organization (client, consultants, and In order to compare the means between JVs/con-
contractors). sortiums and independent rms, t-test was carried out.

Table 3
Educational background of respondents.
Background Civil Mechanical/electrical Commerce/economics Computer Sciences social sciences
Frequency 61 9 4 1 1
Percent 80.5 11.7 5.2 1.3 1.3
232 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236

Table 6
ANOVA for dierent sub-classications of respondents.
Key performance indicator Type of organization Overall experience Experience as project manager
F Sig. F Sig. F Sig.
On time (KPI1) 3.80 .007** 1.13 .349 .22 .949
Under budget (KPI2) 4.06 .005** 1.27 .286 .38 .855
Meets specications (KPI3) 2.75 .034* 3.26 .010* 1.20 .318
Eciently (use of resources) (KPI4) .46 .762 1.23 .301 1.30 .271
Doing the right thing (eectiveness) (KPI5) 3.80 .007** 1.58 .176 1.16 .334
Safety (KPI6) 2.27 .070 .98 .433 1.21 .314
Free from defects (high quality of workmanship) (KPI7) .22 .923 1.29 .276 1.53 .189
Conforms to stakeholders expectations (KPI8) .75 .558 1.09 .371 1.33 .258
Minimized construction aggravation, disputes, and conicts (KPI9) .67 .611 1.30 .272 1.27 .284
*
p < .05.
**
p < .01.

Table 7
t-Test for professionals working independently and in joint ventures.
Key performance indicator JV/consortium (67)a Independent rms (9) t-Test
Mean SD Rank Mean SD Rank t Sig.
On time 4.67 0.53 1 4.11 0.78 2 2.79 .007*
Under budget 4.46 0.61 2 3.78 0.83 6 3.01 .003*
Safety 4.30 0.72 3 3.89 0.93 5 1.83 .071
Meets specications 4.25 0.61 4 4.44 0.53 1 1.57 .120
Eciently (use of resources) 4.22 0.55 5 3.44 1.01 9 1.14 .257
Doing the right thing (eectiveness) 4.06 0.67 6 3.78 1.30 7 2.42 .018
Free from defects (high quality of workmanship) 4.01 0.81 7 4.11 0.78 3 .38 .737
Conforms to stakeholders expectations 3.99 0.73 8 4.11 0.93 4 .47 .638
Minimized construction aggravation, disputes, and conicts 3.97 0.74 9 3.78 0.67 8 .74 .461
*
p < .01 (dierence is statistically signicant).
a
No. of respondents.

Results of the t-test are shown in Table 7. It can be seen 7. Ranking of the key performance indicators (KPIs)
that respondents belonging to rms working independently
and those working in joint ventures tend to generally agree Ranking of various KPIs was obtained by computing
about their rating perception of KPIs, except for on time the means for the overall sample as well as for separate
(KPI1) and under budget (KPI2), on which they show sta- groups of stakeholders. It is evident that all respondents
tistically signicant dierence. These results imply that are conscious about time (KPI1), budget (KPI2) and e-
there is insucient evidence to conclude that professionals cient use of resources (KPI4) along with safety (KPI6),
working in independent rms perceive KPIs dierently and quality (KPI3). Since the Airport was targeted to be
from those working in JVs/consortiums. opened in September 2005, high ranking of on time is
As for as the dierence of perception is concerned for not unexpected. As the project is a high prole symbol in
on-time (KPI1) and under budget (KPI2), all organiza- the Thai construction industry and is projected to be a
tions working independently were mostly local whereas future aviation hub Asia, perception about high quality
all JVs/consortiums comprised both local and international and budget achievement is also understandable. Overall
participants. There is likelihood that local rms perceive low ranking of minimized construction aggravation, dis-
KPIs dierently from their international counterparts putes, and conicts is rather surprising. However, this
as it is obvious from the ranking of KPIs in Table 8. This may be due to intuitive understanding of the respondents
may be due to a cultural dierence between local and inter- about the Thai culture that is typically inclined towards
national rms. As compared to those working in JVs/con- conict free work onsite.
sortiums, respondents working in independent There are some noticeable dierences between the rank-
organizations may possibly be more concerned about con- ings of KPIs across various stakeholders. For example,
formance to the specications, quality of workmanship, on-time (KPI1) is high on the agenda of all stakeholders.
and conformance to stakeholders expectations, as it can Under budget (KPI2) is generally given a priority by all
also be seen from the ranking of KPIs in Table 8. It should except the client. Eciently (KPI4) is a main concern
be noted that the results of t-test may have limitations due for the client and project management consultants whereas
to unequal sample sizes of respondents from JVs/Con- safety (KPI6) seems to be more important for design con-
sortiums (67) and independent rms (9). sultants and construction contractors. In accord with their
 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236 233

Table 8
Ranking of key performance indicators.
Description Overall (76)a Client (7) PMC (10) CSC (38) DC (5) CC (16)
* **
M R M R M R M R M R M R
On time 4.61 1 4.00 3 4.60 1 4.55 1 5.00 1 4.88 1
Under budget 4.38 2 3.57 7 4.40 2 4.42 2 4.20 4 4.69 2
Eciently (use of resources) 4.25 3 4.43 1 4.30 3 4.24 5 4.00 6 4.25 4
Safety 4.24 4 3.57 6 3.90 6 4.37 4 4.60 2 4.31 3
Meets the specications 4.21 5 3.57 8 4.10 4 4.39 3 4.20 5 4.13 6
Free from defects (high quality of workmanship) 4.03 6 4.00 4 3.90 7 4.05 8 3.80 7 4.13 7
Conforms to stakeholders expectations 4.00 7 4.14 2 3.90 8 4.11 7 3.60 9 3.88 9
Doing the right thing (eectiveness) 3.99 8 3.14 9 3.90 5 4.16 6 4.40 3 3.88 8
Minimized construction aggravation, disputes, and conicts 3.95 9 3.71 5 3.90 9 3.92 9 3.80 8 4.19 5
a
No. of respondents.
*
Mean.
**
Rank.

role, conformance to the specications (KPI3) is on prefer- example, safety (KPI6) cannot be achieved unless eective-
ence for construction supervision consultants. Together, all ness or doing the right thing (KPI5) is not in place. Simi-
stakeholders seem to value the project completion on time, larly, minimized construction aggravation and conicts
under budget, with quality according to specications, and (KPI9) cannot be achieved unless the project conforms to
with a due care for safety. stakeholders expectations (KPI8). In other words, these
KPIs are inseparable and should not be looked at in isola-
8. Correlation between the KPIs tion from each other. Instead, these KPIs should be seen as
various aspects of the same performance measurement
Correlation test was also run to examine how various model.
KPIs associate with each other. Table 9 shows that all KPIs
signicantly and strongly correlate with each other except 9. Discussion of results
in few instances in which KPI1 (on time), KPI2 (under
budget), and KPI3 (according to specications) do no cor- Top ranked KPIs are completion on time (KPI1),
relate with some other KPIs. Apart from these exceptions, under budget (KPI2), eciently (KPI4), safety
all KPIs strongly and signicantly correlate with each (KPI6), and according to specications (KPI3). There-
other, showing that they bear strong relationships. fore, on mega construction projects, especially the case
Strong correlations between various KPIs may imply study project, respondents are conscious about the popular
that they are similar to each other (or overlap each other) iron triangle of construction industry, that is completion
and hence can be reduced by using factor analysis. How- on time, under budget, and according to specications.
ever, it should noted that some of these KPIs are quantita- However, ndings in this study show that there is signi-
tive where as others are qualitative in nature. Combining cant concern about eciency and safety. These results
them through factor analysis would not serve any purpose. show that the construction stakeholders are starting to
However, results in Table 9 do show that most of the KPIs think beyond the traditional measures of project perfor-
are not only interrelated but logically interconnected. For mance. Iron triangle is not an inclusive measure of project

Table 9
Correlations among KPIs.
KPI1 KPI2 KPI3 KPI4 KPI5 KPI6 KPI7 KPI8 KPI9
On time (KPI1) 1
Under budget (KPI2) .451** 1
Meets specications (KPI3) .285* .448** 1
Eciently (use of resources) (KPI4) .311** .355** .482** 1
Doing the right thing (eectiveness) (KPI5) .354** .278* .607** .505** 1
Safety (KPI6) .252* .344** .601** .406** .648** 1
Free from defects (high quality of workmanship) .276* .105 .444** .444** .452** .523** 1
(KPI7)
Conforms to stakeholders expectations (KPI8) .091 .450** .432** .425** .434** .547** .446** 1
Minimized construction aggravation, disputes, and .106 .232* .162 .370** .345** .403** .369** .440** 1
conicts (KPI9)
*
Correlation is signicant at the 0.05 level 2-tailed.
**
Correlation is signicant at the 0.01 level 2-tailed.
234 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236

performance anymore. This research suggests that Fig. 1 the value that the investment on quality attainment can
should be considered as the new measure of performance generate.
on large construction projects. There are three levels at At the last and nal level, issues related to the stakehold-
which KPIs should be looked at. Issues related to time, ers satisfaction, construction conicts and disputes, and
budget, and quality are at the core of project performance reduced defects (high quality of workmanship) must be
evaluation or what is conventionally known as the iron considered in the framework of performance evaluation.
triangle of performance evaluation. It is very common for construction projects to suer from
However, these are not the only issues based on which delays and budget overruns due to disputes among the par-
the success of a project should be evaluated. Issues related ties. Including many other issues, these disputes are often
to safety, eciency, and precision (or doing the right due to dissatisfaction of various stakeholders with certain
thing) are equally important for a project to be on-time, aspects of the project. Similarly, disputes and conicts also
on-budget, and according to specications. For example, arise when there is poor quality of the nished work. Dis-
it is questionable to conceive a project to be successful if putes in construction projects sometime lead to excessive
it does not oer safe working conditions to the workers. litigation, resulting in loss of time, money, and various
Similarly, it is unlikely to achieve the deadlines if the tasks intangible social benets that the construction facility was
are not accomplished with eciency and precision. to oer. Therefore, a conscious eort must be made to
According to specications (KPI3) and doing the right reduce the possibility of any conicts of disputes.
thing (KPI5) largely fall under the discussion on quality. Construction of the Heathrow Terminal 5 is a recent
As far as construction is concerned, the focus on quality example in which a conscious eort was made by the client
management given only the construction stage and on the (BAA in this case) to prevent the conicts as much as pos-
product quality, as Toakley and Marosszeky (2003) rightly sible by recognizing and accepting that it took the ultimate
point out. While it is important to ensure quality during responsibility for risk. This was done by an integrated risk
construction stage and on the product, it is equally signif- management approach which essentially comprised three
icant to achieve quality during early stages of the project main aspects, as noted by Williams (2008) in his speech
(such as analysis, planning, and design). Therefore, it is at the IMIA-2008 conference:
essential that attention is paid to a total the attainment
of total quality during the project life-cycle (Toakley and 1. BAA focused on selecting the best people to work as an
Marosszeky, 2003). integrated team (T5 Team) to work towards the project
On similar lines, Rosenfeld (2009) rearms that invest- goals with a problem solving approach. Involvement of
ing in quality is a worthy strategy and leads to several ben- an HR specialist, support of the top management, and
ets. His recent research shows that the ratio of the direct focus on quality in execution made it possible for the
benets to the investment in terms of savings on internal team to work towards a single goal.
and external failures that might occur in the absence of 2. BAA adopted an innovative procurement strategy in
quality attainment procedures is 2:1 or more. These nd- which suppliers were given a guaranteed margin based
ings are not only very encouraging but also demonstrate on an open-book relationship. A shared incentive
approach was also adopted to reward exceptional per-
formance. In return, BAA asked the suppliers to provide
a standard no less than best practice.
3. BAA owned all the risk and to manage and mitigate the
risks it put in place an innovative framework such as
Safety integrated use of risk registers, continuous involvement
Free from
defects Conforms to and knowledge building of participants through work-
(high quality of stakeholders shops, and involvement of insurers from the outset.
workmanship) expectations
On On
Time Budget In order to avoid conicts arising from logistics and
KPIs interface management, 4-D construction planning was
According to employed on the T5 project. In 4-D planning, time is the
Doing the
specifications fourth dimension with CAD data (2-D or 3-D), creating
Efficiently right thing
(Effectiveness) a real-time graphical simulation of planned works (Toakley
and Marosszeky, 2003). Use of virtual modeling helped
Minimized construction aggravation, disputes and prevent conicts and delays by enhancing the coordination
conflicts across contractors and detecting clashes before they would
actually occur on site.
Results in this study show that the perception of some
KPIs does dier across various construction stakeholders.
This nding is plausible given dierent vested interests of
Fig. 1. Performance measurement criteria for mega projects. various stakeholders involved in the project. However,
 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236 235

professionals do not dier signicantly in their perception (2004) suggest, combining both quantitative as well as
about KPIs across various levels of experience. This nding qualitative information can help establish a benchmarking
is dierent from that of Cox et al. (2003) who ascertained system for which further research should be conducted.
that the perceptions of KPIs was dierent among profes- Therefore, more future research is needed that may focus
sionals based upon their number of years of experience. on establishing a comprehensive benchmarking system to
This dierence of nding is possibly due to dierent context measure performance on large development projects in
and target population used in both studies. However, rank- the public sector. Future research may also focus on inte-
ing of KPIs in this study resonatee with the ndings of the grating KPIs related to operational issues (such as time,
study of Cox et al. (2003), which found that the KPIs con- cost, and quality), life-cycle issues (such as maintainability,
sistently perceived as being highly signicant include qual- energy consumption, and satisfaction of the users etc.),
ity control, on-time completion, cost, and safety. These strategic issues (such as inter-organizational co-operation,
ndings also strengthen the viewpoint presented in earlier organizational learning etc.), and socio-economic issues
works (for example, Savindo et al., 1992; Munns and (such as social and human development in the area).
Bjeirmi, 1996; Turner, 1993) which advocates that the Another direction in which the future research can progress
performance of a project should be measured beyond its is to establish a clear link between critical success factors
on-time and under-budget completion. (CSFs) and KPIs. More work is needed to understand
It can be seen from Fig. 1 that three layers at which the how eective implementation of CSFs translates into the
KPIs have been placed are closely connected to each other. attainment of desired KPIs.
In order to achieve the KPIs at the core (on-time, on-bud- It should also be noted that the case study project
get, and according to specications), there must be an eort employed traditional procurement strategy of design-bid-
put to achieve safety, eciency, and eectiveness/precision. build. However, it can be anticipated that the participants
Similarly, the KPIs at the core cannot be achieved if the will have a dierent perception about performance of a
KPIs at the periphery are not constantly monitored. There- project if a dierent procurement strategy has been
fore, the iron triangle may stand at its position for measur- adopted. Therefore, future works on KPIs may focus on
ing the performance of projects, yet it can only be achieved projects with dierent procurement systems such as Pub-
if due attention is given to other the KPIs in the outer tri- licPrivate-Partnerships (PPP), Build-Operate-Transfer
angle and at the periphery of the circle. (BOT), and Design-Build (DB). More research can be car-
In the recent years, there have been many advances in ried out to establish more objective indices which can
eld of project performance management. Norrie and encompass the issues of quality, workmanship, maintain-
Walker (2004), for example, propose a new perspective of ability, and energy eciency of the built facilities. Issues
project performance management; that is projects should related to sustainable buildings need to be examined in fur-
be completed on-time, on-budget, on-quality, and more ther detail in relation with project performance measure-
importantly, on-strategy. One may argue that sustainabil- ment. Finally, more research should be conducted by
ity should also be at the centre of project performance including the facility users (such as building residents or
management framework. These developments show that oce users) to examine how they perceive the performance
the perception of project performance is changing fast of a facility after it has been built.
and best performing companies are beginning to take a
strategic stance in measuring the performance of their pro- 11. Conclusions
jects. In a world of hyper competition, projects are no
longer seen as tasks or means to survival. Instead, projects Performance measurement is one of the important
are growingly seen as powerful strategic weapons that aspects of project management. As there are dierent needs
organizations use to enhance their competitiveness, win and dierent goals of any given project, performance mea-
the market place, compete in the dynamic and furiously surement should also be tailored for each project. How-
commercial world, and create value for their clients and ever, a general framework can be used as a guide to
other stakeholders (Shenhar, 2004). In other words, the measure the success of a project at macro and micro levels.
mindset of project performance management must trans- Iron triangle (on time, under budget, according to speci-
form from operational/functional nature to more of strat- cations) has been widely accepted criteria during last cou-
egy-focused. ple of decades. However, with shifting functions of
buildings, changing demands of users, evolving environ-
10. Directions for future research mental regulations, the same old-fashioned performance
criteria can no more be the sole determinant of project suc-
Among various KPIs discussed in the current study, it is cess. Success of future projects will be increasingly mea-
possible to measure some KPIs more objectively as they are sured on the criteria of strategy, sustainability, and
easily quantiable such as on-time and on-budget. safety. Future buildings and infrastructure will be evalu-
Whereas KPIs like minimized construction aggravation, ated based on their operational exibility, maintainability,
disputes and conicts is not easily measurable because of energy eciency, sustainability, and contribution to the
its qualitative nature. However, as Sohail and Baldwin overall well-being of their end users. Therefore, future
236 S.R. Toor, S.O. Ogunlana / International Journal of Project Management 28 (2010) 228236

frameworks of project performance measurement need to neering Construction and Architectural Management 11 (6), 404
be more comprehensive and should include not only the 413.
Norrie, J., Walker, H., 2004. A balanced scorecard approach to project
quantitative and objective criteria but also more subjective management leadership. Project Management Journal 35 (4), 4756.
and qualitative criteria. Modern needs, future demands, Phua, F.T.T., 2004. Modeling the determinants of multi-rm project
expectations of the stakeholders, and regulations must also success: a grounded exploration of dierent participant perspectives.
be incorporated into an inclusive index that can explain if Construction Management and Economics 22 (5), 451459.
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life cycle. Project Management Journal 19 (3), 6775.
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