The impact of the business-project interface on capital project performance

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2013-08

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Abstract

A capital project represents a significant investment by a firm to create future economic benefits. Since the global economic recession begun in 2008, corporate owners have paid increased attention to business-project interfaces with the aim of improving alignment between business strategy and capital project development. Despite its importance, the business-project interface has not been quantitatively measured and no empirical evidence exists about its effects on performance outcomes. This dissertation intends to identify and quantify the business-project interfaces in the development of a capital project in terms of personnel involvement and task interaction, and to investigate its effects on performance outcomes and the value of best practices. To achieve these objectives, a conceptual framework for assessing the involvement and interaction on business-project interfaces was developed. Based on the conceptual framework, a questionnaire including quantitative measures for the assessment of personnel involvement and task interaction was designed. Supplemental survey responses were received for several industrial capital projects that had initially provided capital project data to the CII Benchmarking & Metrics database. The effects of the business-project interface in terms of cost, schedule, change, and business performance were documented. Data analyses show that project groups with high involvement by business personnel and high interaction between business and project units tend to show remarkably improved project performance. Furthermore, this dissertation presents confirmation that projects with high involvement of business unit personnel and intensive implementation of best practices tend to show superior project performance. The primary contribution of this research is to provide a quantitative assessment tool to assess the business-project interface and to document the interface throughout project life cycle. Another contribution is empirical evidence of the benefits on project performance from implementing best practices that were supported by management.

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