A STRATEGIC PERSPECTIVE OF ICT SUPPORTED COST MANAGEMENT FOR GREEN BUILDINGS IN THE QUANTITY SURVEYING PRACTICE

Wilfred M. Matipa [BSc, MSc, PhD, PGCertTT, MCIOB, MAACE]

Department of Built Environment, Faculty of Technology & Environment, Liverpool John Moores University, Liverpool, Merseyside, UK

For the Republic of Ireland to meet the European Parliament directive 2002/91/EC which places a duty on building developers to design, build and operate structures that meet the sustainability criteria set in the directive - the architecture, engineering, construction and facilities management (AEC/FM) industry must take up and practice green building systems that promote total integration of the construction process. Green building is the process of producing a constructed facility that encompasses ultimate energy efficiency, forward-thinking resources management, and general sustainable construction. Achieving green building, however, requires an integrated team; combining a wide range of different specialists through in-depth collaboration so that the complexity of trade-offs between architectural features, building services and other factors can be reached. The aim of the research has been: (i) to highlight the availability and use of software systems in the Irish construction cost consultancy; and (ii) to gather views from practicing professionals on how the available systems could ease the implementation of total cost management of green buildings. The research concludes that the industry is well poised to move into the next generation of surveyors that would fully participate in the envisaged green construction industry; and that development in the ICT complement the traditional competencies of Quantity Surveying. KEYWORDS: cost management, information Technology, sustainable construction, traditional quantity surveying

INTRODUCTION
The Irish construction industry operates in a similar pattern to most international industries in the developed world. From design to construction, various professionals use complex tools and techniques to optimise client requirements. The most recent key requirement for most clients has been to meet the European Parliament directive 2002/91/EC [which places a duty on building developers to design, build and operate structures that meet the sustainability criteria set in the directive (Morrissey, ODonnell, Keane, and Bazjanac, 2004)]. Meaning, construction professionals must take up and practice green building systems that promote total integration of the construction process. By definition, green building or sustainable building is the process of producing a constructed facility that encompass ultimate energy efficiency, forwardthinking resources management, and general sustainable construction (Rajgor, 2004). Achieving green building, however, requires an integrated team; combining a wide range of different specialists through in-depth collaboration so that the complexity of trade-offs between architectural features, value and cost, building services and other factors can be reached (Sorrell, 2003). This research is part of a strategic approach to implementing green building practices, by promoting an early convergence of professional work in the building product delivery process. It demonstrates that while there is a thesis that new developments in ICT systems are virtually damping the traditional competencies of quantity surveying, the picture in Quantity Surveying Practice is opposite: in that more traditional competencies of quantity surveying are sought so as to increase the speed, accuracy and reliability of the manipulation and analysis of data created using ICT systems.

CHALLENGES OF OPTIMISING VALUE FOR CONSTRUCTED FACILITIES

Naturally, an optimal value of a constructed facility can only be achieved if the right balance between performance, cost, delivery time (Ashworth, 2004; Dundas, 2005) and the market value is achieved. In the case of green buildings, getting such a balance requires a great deal of simulations from the project team so that all decisions prove not only environmental friendly, but also valuable, workable, and cost effective. As a result, the ability to collaborate in early phases within the project team, with a view to providing expertise on life-cycle analysis of all decisions cannot be over-emphasised (Hipkiss, 2005). Integration, however, cannot easily be achieved because of the diverse professional disciplines on each project (Sorrell, 2003). Divergence in professional specialisation and interests, and the sequential nature of construction stages have naturally caused industry-wide operational islands; leading to fragmented building performance assessments (Morrissey, ODonnell, Keane, and Bazjanac, 2004), as shown in Figure 1. Because of industrial fragmentation, cultural issues as well as business issues tend to have stronger sentiments each time the issue of operational integration is considered for the construction industry. A buildings life spans its planning; its design, construction and operation; and its ultimate reuse or demolition (Osso et al, 1996). Often, the entity responsible for design, construction, and initial financing of the building is different from those operating the building, meeting its operational expenses, and paying employees salaries and benefits (Osso, et al, 1996). However, the decisions made at the first phase of building design and construction can significantly affect the costs and

efficiencies of later phases; that is why its crucial to include a Quantity Surveyor at design stage (Ibid). Life-cycle cost analysis an increasingly accepted analytical method that calculates costs over the useful or anticipated life of an asset reveals that low up-front expenditures, though easier to finance at building inception, can result in much higher costs over the life of a building or system (Ashworth and Hogg, 2002). There are generally two complementary ways to achieving integration in the project team, so as to implement green building practices: (i) by business relationships between firms; and (ii) by identifying, and using the right technological tools and techniques that can facilitate the smooth running of the integrated team. The latter is the focus of this research.

THE IMPORTANCE OF TRADITIONAL COST MODELLING SYSTEMS

Despite the increase in the demand for more sustainable practices, traditional systems continue to play a crucial role in the modelling of construction cost data (Ferry et al, 2003).

Desired Built Environment Product, e.g. Office Block

Client, City Council, Others

Operational Islands created when professional specialisation is superimposed on product development systems of the built environment

Quantity Surveyor

Project Manager

Construction Manager

Architect, Engineers, Stake Holders

Contractor, Sub-Contractors,

Facilities Mgmt

Design Stage

Construction Stage

Operation Stage

Figure 1: Operational Islands Created by Superimposing Operational Specialisation on Industrial Segmentation [Adapted: Kerzner, 2003]

Figure 1 abstracts the type of traditional cost models mapped against the generic design stages, and examples of how cost models are used at various stages. Using Figure 1 it can be observed that the cost modeller requires not only design data but also historical cost information about the product. However, practical implementation of the examination of the economic benefits and environmental ramifications of green buildings, with life-cycle assessments is extremely harder when using traditional project appraisal systems that are endemic in most construction industries (Erlandsson and Borg, 2003; Osso et al, 1996). Quantity surveyors realise that actual calculations of the buildings total economic and environmental impact and performance from material

extraction and product manufacture to product transportation building design and construction, and operations and maintenance, and building reuse or disposal (Sorrell 2003) can be taxing. For instance, the general cost management of projects that are highly mechanical and electrical [M & E] in nature is assigned to M & E firms; mainly by way of provisional and or prime cost sums because of the specialised nature of the mechanical and electrical profession, making it extremely difficult and risky for the Quantity Surveyors to manage such costs. The more complex project become, the higher the demand for better cost modelling tools for the quantity surveyor (Sorrell, 2003). This development, among other factors, has led to the changing role of the cost consultant the world over. There are complex LCA systems used as powerful decision making support tools (Erlandsson and Borg, 2003), such as the BREs Envest; which is a system based on the top down approach, because it has been developed for use in the design phase of a building project. Most programs, however, are still user unfriendly due to the shear amount of data required to appraise a design. However, it is envisaged that emerging software would boost project appraisal and analysis, from the aspects of time, cost, performance and market value; and enhance the work of a quantity surveyor.

If integrated, cost modelling systems can be important to the business of Quantity Surveying because they help professionals achieve total cost management of a constructed facility a concept which supports green building (Figure 2). As a result computing power [information and communication technology (ICT)] is inevitable in the cost consultancy sector of any construction industry because it increases the speed to capture, analyse and share data to facilitate decision making.

Generic Design Stages

Traditional Model Type

Data User

Example
Cost/Bed; Cost/Student

Level of Reliance on Historical Cost Data

80-100%

Brief Stage

Sketch Design

Unit

Space
Element
Detailed Design

Quantity Surveyor

Cost/m2 of Gross Floor Area Cost/m2 of Functional Space Cost/m3 of Building Volume

80-100%

Cost of Functional Element/m2 of Gross Floor Area

60-80%

Features
Standard Methods of Measurements Items (CESMM or SMM7, or Standard WBS)

Cost of Grouped SMM items

40-60%

Bill of Quantities
20-40%

Working Drawings

Operations
Contractor

Cost per Network Operation

Resources

Cost of Labour, Plant, materials, Supervision

Figure 2: Type of Cost Models Mapped against Generic Design Stages [Adapted: Ferry et al, 2003]

THE WANING TRADITIONAL COMPETENCIES OF QUANTITY SURVEYING AND GREEN BUILDING

There has been a suppressed demand for the essentially traditional and technical skills of surveyors, due to increasingly sophisticated ICT solutions, which, as in many other jobs, are beginning to automate some of the roles associated with surveying (RICS, 2002). Unless the profession adapts to the rapidly changing demands of its services, it is in danger of losing its leading role in providing services to its key markets: land, property and construction. The following research questions are addressed

Figure 3: Abstraction of nD Model used for What if Cost analysis (Source: Tanyer and Aouad, 2005)

Unlike 3D and 4D models that represent building information contained within several document formats (Figure 3), nD models tend to be databases constructed with intelligent objects which represent building elements (Lee and Sexton, 2007). From this central database, different views of the information can be generated automatically (ibid). nD modelling builds upon the concept of 4D modelling, and aims to integrate an nth number of design dimensions to a holistic model, which would enable users to construct and visualise the building over its complete lifecycle (ibid). Using a survey, Lee and Sexton (2007) found out that the nD modelling technology was considered as potentially useful, but not sufficiently proven to risk disrupting current ways of working, and existing technology infrastructure (ibid). Potential pitfalls associated with the deployment of an inappropriate or ineffective ICT system is one of the key factors contributing to the low levels of investment

in ICT within the construction industry (White, 2007); as is the case with Lee and Sextons (2007) survey. However, it is envisaged that ICT systems will take the form of fully integrated and intelligent enterprise systems that could profoundly change the shape of the industry (Figure 4); more so with the intelligence being imposed upon many of the industrys unintelligent processes in the form of the building product models and other interoperable, digitally formatted building standards (White, 2007). Therefore, it was important to collect primary data pertaining to the Quantity Surveying business in Ireland.

% O F T O T A L
100 100% of the costs are committed 80

80% of the costs are committed by design decisions, when only a limited % of engineering is complete Spending Curve

C O S T
0 Process Design Detailed Engineering

Equipment Manufacturing

Construction

Figure 4: Project Expenditure Commitment Curve v Project Spending Curve [Source: Kinney and Soubiran, 2004]

RESEARCH DESIGN AND DATA COLLECTION

In order to extract a sound understanding of the established body of knowledge on integrated cost management of sustainable construction, the following research questions were formulated: I. What kind of software is the industry using for the design, construction and running of constructed facilities? II. Could the available software promote information sharing; hence facilitate integrated and collaborative approach to business? III. Could the developments in the ICT systems reduce the over dependency on traditional quantity surveying competencies? A questionnaire was the main instrument for data collection because: (1) The type of population literate; (2) Most of the population could not find time for an interview; (3) The increasingly expensive nature of alternative means of data collection.

Sampling Design
By definition, simple random sampling is a form of sampling design in which n distinct units selected from N units in the population in such a way that every possible combination of n units is equally likely to be the sample selected (Everitt, 1998). Stratified random sampling therefore is the random sampling from each strata of a population after stratification (Ibid). The population for this research was naturally stratified, by the Society for the Chartered Surveyors of Ireland (2004) according to the county where a firm operated from. (i) Cork; (ii) Dublin; (iii) Waterford; (iv) Limerick; and (v) Galway. However, companies that had outlets in more than a single country were only represented by their headquarters. Stratified sampling was used because it ensures that different groups of a population are adequately represented in the sample so that the level of accuracy in estimating parameters is increased (Nachimias and Nachimias, 1992). The aim was to achieve a total population (N) of fifty (50) respondents so as to increase the chances of a high response rate. Twenty three (23) responded, or a 46% response rate. Even though a higher response rate could have been desired, data collection proved extremely sluggish despite all four methods of questionnaire distribution namely: (i) Postal mail; (ii) Electronic mail; (iii) Web-link hosted by a private consultant; and (iv) personal delivery. The presentation and eventual analysis of the results from the survey follow the sequence of questions set in the questionnaire so that the clarity of the research is enhanced.

Key Details of Respondents to the Research Questionnaire

The breakdown of respondents, according to their respective positions within firms would bolster the validity and reliability of primary research data (Figure 5) Fifty seven percent (57%) of respondents had managing director portfolios at the time of the survey; seconded by seventeen percent (17%) senior Quantity Surveying portfolios. Though unexpected at the time of questionnaire distribution, this development adds a strategic dimension to the research mainly because respondents would have a proportionally high number of years of Quantity Surveying experience coupled with visionary duties of steering the firm to a prospective future. Experience in the Quantity Surveying business, as earlier alluded to, can impact the quality and reliability of research information. Sixty seven percent (67%) of respondents had more than fifteen (15) years of experience while twenty two percent has experience ranging from six (6) to ten (10) years. There was virtually no responded with less than 5 years of experience in Quantity Surveying. This dimension is crucial for this research because information is obtained from people that have experienced cyclical movements of the construction market; and the eventual changing role of the quantity surveyor. Naturally, consultancies tend to have a relatively small number of personnel. The research results showed that 52% of firms had Quantity Surveying personnel ranging from 5 10. However, this was to be expected, because most consultants can manage many projects with a small number of professionals. The firms that tended to have more personnel were big players on the market, with many offices across the country.

Breakdown of Respondents
60% 57%

50%

40%

Responce

30%

20% 13% 10%

17% 13%

0% Quantity Surveyor SNR Quantity Surveyor Managing Director Others Official Position in the Firm

Figure 5: Breakdown of the Respondents According to their Official Positions

Project Specialisation
Within the industry, certain firms specialise in building related works, while others specialise in refurbishments and/or repair works. Because of the complexity, and in most cases, the specialised nature of Mechanical and Electrical [M&E] projects, some Quantity Surveying companies tend to apportion the overall cost management of such projects to the M&E specialists; using lump-sums or prime cost sums. Other Quantity Surveying firms have dedicated professionals specialised in M&E works. A fair amount companies that offer M&E cost management. Some of the M&E installations include HVAC systems for buildings. Because such installations have a huge impact on the initial as well as overall financial investment, it becomes essential that prudent economic simulations are carried out so as to assess the likely return on investment prior to committing finances. It is therefore important for any Quantity Surveying firm, with or without M&E specialists, to carefully analyse and appraise the financial and economic prudence of design decisions on M&E systems. Most Quantity Surveying firms can handle assorted projects type ranging from civil to refurbishment. This could be attributed to the generic nature of the profession, which most cases, allows consultants to manage the costs of projects irrespective of their size, type and complexity, using the same principles of total cost management. It is could therefore be argued that the industry is well poised to manage any sort of project, as is evidenced from the respondents view.

Project Teams and Documentation

The perception of importance of Quantity Surveying at generic phases of the project provides the starting point of the overall assessment of role of cost management within a project team. For instance, if respondents felt quantity surveyors were not important at the preliminary stage, it could have been concluded that they were still operating with relatively conservative approach which promotes the production of bills of quantities

from drawings: also referred to as costing a design. However, respondents were of the view that Quantity Surveying is highly essential at all stages of the project life cycle. The preliminary stage as well as the design and construction stage had the highest scores. Kinney and Soubiran (2004) argued that 80% of the cost of the project is committed at about 20% stage of the project life cycle. This phenomenon shows that it is crucial to analyse design options, not only from the aesthetic point of view, but also from the financial, economic, and build-ability points of view; and the overall anticipated impact [positive or otherwise] of the proposed development, at an early stage.

Information Technology Packages in Use and Level of Information Sharing

The available software systems for cost consultancy business typify any world-class construction industry. Build-soft and Microsoft Excel are the most widely used systems for the preparation of quantities, estimating and cost planning, cost monitoring, and final accounts management. Similarly, project planning systems such as Microsoft Project Planner, Power Project, and Primavera Project planner are predominantly used for project planning purposes; while AutoCAD and Voloview are used for accessing visual design data. Research question 1: asked for the kind of software is the industry for the design, construction and running of constructed facilities? Results paint a good picture of useful software systems available to cost consultants; and that they could utilise the systems to uphold green building. Optimum application of available software systems for appraisal and analysis of projects does not however rely on the software alone, but the user. For one to model the financial, economic, and sustainable performance of a constructed product from design to completion, more systems would be desirable; especially systems that offer integrated data so as to allow effective cost modelling. Despite the availability of software systems, information sharing amongst professionals is predominantly a hybrid [a combination of paper and electronic systems] at 61% while paper systems are used by 39% of respondents. There are legal risks associated with the electronic data transfer systems. Construction cost management goes hand in hand with contract administration, settlement of claims, and valuation for accounts, to mention but a few. Therefore, respondents argued that even though electronic systems supersede paper ones, it still remains essential that a paper back-up system is set up in preparation for dispute resolutions. Respondents were confident with the efficiency of the current data sharing systems in place because 30% rated the system as very efficient, 48% said the system was efficient, and 22% indicated the system was quiet efficient.

Stage in the Project Life cycle when Available Software is cruciallyImportant

Even though respondents were of the view that available software systems were crucial at all stages of the product life-cycle, it is important to note that design and documentation scored very high, as shown in Figure 6.

10

Project Stage at which available Software is Crucialy Important

None (Project Stage)

All Stages

Operarion

Construction

Design & Documentation

Preliminary 0 2 4 6 Response (Number) 8 10 12

Figure 6: Rating the Project Stage at which Available Software is Crucially Important

Thirty nine (39%) percent felt the systems totally encouraged information sharing, while twenty two (22%) felt the systems encouraged information sharing to a large extent. However, 26% felt that information sharing, though encouraged, was to a less extent; and 13% felt the software did not encourage information sharing. In terms of the extent they used the software for information sharing in the project team: 39% used the software at a high rate; 39% on an average rate; 17% on a low rate, and 4% never used the software. To test respondents consistency, they were asked to rate the extent to which available software discouraged information sharing. Fifty seven percent (57%) were of the view that the software did not discourage information sharing, while 43% felt the software discouraged information sharing; to a less extent. Because information sharing is pertinent to this research, it was important to establish correlations between selected sets of observations. According to Witte and Witte (1997) a positive relationship among pairs of observations tend to occupy similar relative positions in their respective distributions, while negative relationships tend to occupy dissimilar and opposite positions in their respective distributions. If however there is no regularity among the pairs of observations, it could be interpreted that there could be no significant relationships (Ibid). Even though a correlation coefficient, regardless of size, never provides information about whether an observed relationship reflects simple cause-effect relationship or some complex state of affairs, it is a prudent way to engage predictive measures of the trends using current body of knowledge. To describe correlation between quantitative data and qualitative data with two categories, assign arbitrary numerical codes, such as 0, 1, 2, 3, to the two qualitative categories then use the Pearson r formula, also known as a point bi-serial correlation coefficient. Alternatively, to describe the relationship between two qualitative variables, again assign arbitrary numerical codes to the categories of both qualitative variables and solve the formula in Equation 1, also designated as Crammers phi coefficient (Witte and Witte, 1997).

11

x y 2

Equation 1: Pearsons Correlation Coefficient Computation Formulae [Source: Witte and Witte, 1997; Microsoft Excel Functions, 2003]

The Pearson correlation coefficient was used to determine the consistency of respondents on information sharing resulted in: (a) Compare rating for the extent to which the software systems encourage information sharing with the usage of the software for actual information sharing at 0.70; Though positive, the correlation coefficient shows that even though respondents felt the software encouraged information sharing, they did not fully implement information sharing using the software. Because the observation data sets are relatively small, a higher positive correlation would have dispelled the inconsistency. (b) Compare the rating for the extent to which the software systems discourage information sharing with the usage of the software for actual information sharing at -0.99; The negative correlation coefficient reflects a more realistic picture of the perceptions because respondents felt the software did not discourage the use, hence perceptions and actual implementation of information sharing create a negative correlation, as is the case. The second research question assessed available software promotes information sharing; hence facilitate integrated and collaborative approach to business. There was a slight positive correlation between the usage of MS Excel and Buildsoft, calculated at 0.51 using the Pearsons coefficient. From the results, it could be deduced that the integration of software packages a key to cost management has not taken off on a big scale within the cost consultancy sector. As a result, encouraging software interoperability would even be more challenging. There were leading questions embedded in the survey where respondents were asked to comment: they include:

(i) The Extent to which Software Discourages Project Information Sharing

Respondents perception of the extent to which software is a contributory factor to the poor implementation of information sharing is as follows: (1) When different software is used, or data is imported into a different file format;(2) Poor communication amongst professionals, especially on the location of information;(3) Poor linkage between precontract and post contract activities, mainly because data standards are not compatible;(4) Computers do not improve the work (i.e. the way professionals design), but has huge effect on communication, though accessibility to drawings can be universal; (5) Because old systems still work and have proven reliable, especially when systems fail, professionals do not tend to experiment on newer technologies;(6) The generic procurement system is still Design-Bid-Construct, therefore team participation follows that pattern;(7)Some traditional aspects of Quantity Surveying must remain unautomated e.g. taking off quantities;(8) Incompatible software between different disciplines of the design team.

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(ii) Aspects of Cost Consultancy Business worth Automating

Respondents argued that: (1) No part of the business should be automated because allowing software to dictate the modus-operendi could be detrimental to the profession; (2) Collection, analysis and use of cost data and of historical cost information need to be automated;(3) Measurement and generation of quantities, and billing, interim and final accounts aught to be automated;(4) Even though it is difficult to automate most of the QS work (soft nature) but software for costs in use would be useful (cost Planning), economics or cost in use; (5) Proper business records in cases of disputes, litigation, etc. Modern software needs to improve in its recording of data, e.g., records of emails sent;

(iii) Anticipated Threats to Traditional Cost Consultancy Business

Assessing the threats to ones business is crucial for survival in a competitive environment. The following are some of the threats perceived by quantity surveyors: (1) Fees: too low which leads to poor service, unsatisfied client, lack of work; (2) Software: too reliant on software, hence weakening the technical strength of new surveyors;(3) Skills: Too many consultants go for the 'FAT' budget, its easy to come under-budget, and client looses out; (4) Non audit-ability of artificial information in terms of statistical data on future life cycle costing; (5) Demand for sustainable construction will put pressure on cost consultancy, because clients would not only demand historical data, but also futuristic data; (6) Engineers and architects are trying to carryout the job of the quantity surveyors, thereby increasing their fees; (7) An amalgam of various computer packages in lieu of a more streamlined approach. Because clients wish to get value for money, and they are not going to be paying for something that can easily be done automatically Research Question iii: Could the developments in the ICT systems reduce the over dependency on traditional quantity surveying competencies? Over 75% of the respondents felt the need for traditional competencies has never waned; in fact there is more demand for such competencies even with the availability of ICT.

CONCLUSION AND DISCUSSION

For quantity surveyors to fully implement total cost management during the product life cycle, it is important to integrate cost management systems. Software interoperability offers a good prospect for total cost management, though there has been a lack of market data from the industry which, if available, would be crucial for the marketing of the software solutions emanating from research institutions. The nature of Quantity Surveying is such that it uses a relatively high volume of assorted information from a myriad of sources; as a result a suitable package from the quantity surveyors point of view, is one that can capture as many of the operational dimension they are involved in day today running of the business, without disrupting the body of knowledge built over the years; systems aught to complement existing cost algorithms such as standard methods of measurement. Additionally, collaborative working would result in the implementation of total cost management, hence contributing to sustainable construction. It becomes absolutely crucial that surveyors take up newer integrated systems if they are to compete adequately on the market.

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