ITcon Vol. 13, pg. 343-361, http://www.itcon.org/2008/23

An evaluation model for ICT investments in construction projects

submitted:September 2007
revised:February 2008
published:June 2008
editor(s):Lee G, Eastman C
authors:Stefan Dehlin, Ph.D.
eBygg – Center for Information Technology in Construction, Department of Civil & Environmental
Engineering, Luleå University of Technology, and NCC Construction Sverige AB, SE
email: Stefan.Woksepp@ncc.se, http://construction.project.ltu.se/~ebygg

Thomas Olofsson, Professor
eBygg – Center for Information Technology in Construction, Department of Civil & Environmental
Engineering, Luleå University of Technology, SE
email: Thomas.Olofsson@ltu.se, http://construction.project.ltu.se/~ebygg
summary:Even though Information and Communication Technology (ICT) investments in construction projects generally represent minor commitments of project resources by comparison to the full project cost, the value or impact on the profitability of the project are generally not considered. Also, many of the investment decisions are poorly thought through or examined. Investments decision taken during the procurement phase often merely based on intuition and rough estimations of the future costs and risks. Also, many of the traditionally used appraisal approaches have been shown inadequate in anticipating the consequences of such an investment. As a result, the investment is too often assumed to be negative since the benefits are not proper evaluated, included and weighted against the costs and risks the investment is expected to generate. Poor decision-basis does not only affect the actual decision-making in a particular project but also, in the long run, the motivation to innovate and to introduce new ICT tools and working methods into the construction industry. In view of this, a new project-oriented evaluation model is developed for the purpose to provide for a structure and a work routine to be used by a multidisciplinary project team to evaluate the implications of realizing ICT investments in construction projects. Although primarily aimed at establishing future benefits and costs the model may very well be used for follow-ups. The models’ application is illustrated using a case study of a construction project using 3D and VR for coordination and evaluation. The results based on interviews and rough estimates on the “safe side” show that benefit of the ICT investment for the case study project was much higher compared with the cost for the project. The shift in focus from costs/benefits for the individual stakeholders to costs/benefits for the project gives a momentum to optimize the use of a new ICT tools in construction. This will surely affect the processes and the contractual environment in the project, since it has to support sharing of information and achieved benefits and the costs of the investment in the project.
keywords:Benefits, Construction project, Costs, Evaluation, ICT, Investment, Virtual Reality
full text: (PDF file, 0.814 MB)
citation:Dehlin S, Olofsson T (2008). An evaluation model for ICT investments in construction projects, ITcon Vol. 13, Special issue Case studies of BIM use, pg. 343-361, http://www.itcon.org/2008/23