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The Construction Industry Macro Maturity Model (CIM3) Theoretical Underpinnings PDF
The Construction Industry Macro Maturity Model (CIM3) Theoretical Underpinnings PDF
www.emeraldinsight.com/1741-0401.htm
IJPPM
61,4 The construction industry macro
maturity model (CIM3):
theoretical underpinnings
382
Christopher J. Willis
Department of Building, Civil and Environmental Engineering,
Received 28 July 2011
Revised 23 October 2011 Concordia University, Montreal, Canada, and
Accepted 7 November 2011 Jeffrey H. Rankin
Department of Civil and Environmental Engineering,
University of New Brunswick, Fredericton, Canada
Abstract
Purpose – The purpose of this paper is to introduce an alternative approach of measuring
construction industry performance using maturity modeling. The focus is on introducing a newly
developed maturity model referred to as the construction industry macro maturity model (CIM3) and
highlighting its use by assessing the maturity of the construction industry of the Province of New
Brunswick, Canada.
Design/methodology/approach – Current methods of construction industry performance
measurement such as labor productivity and competitiveness are briefly reviewed, highlighting
their weaknesses. The theoretical underpinnings of the CIM3 are discussed and the implementation of
the CIM3 to measure the cost and quality management maturity of the New Brunswick construction
industry is presented.
Findings – An assessment of the construction industry’s maturity using the CIM3 provides a leading
indication of performance. This is based on the industry being structured according to key practices
areas that contain key practices. The industry’s key practices are linked to objectives that lead to the
achievement of performance goals. The maturity of the construction industry with respect to its key
practices is a function of the relative importance of the key practices and the capabilities of the
industry in implementing the key practices. Based on this, the implementation of the CIM3 in New
Brunswick found that the NB construction industry is more mature in cost management than in
quality management.
Originality/value – This paper contributes to the existing body of knowledge on industry
performance measurement, and more particularly, construction industry performance measurement.
The concept of maturity modeling applied here promotes and demonstrates the use of leading
indicators of performance, as recommended in most performance measurement literature.
Keywords CIM3, Construction industry, Leading indicators, Maturity, Performance, Measurement
Paper type Research paper
1. Introduction
Researchers and industry practitioners have long endeavored at finding ways of
International Journal of Productivity measuring and improving performance in construction. Most initiatives have led to the
and Performance Management development and use of performance measurement frameworks and models focusing
Vol. 61 No. 4, 2012
pp. 382-402 on the organizational and project levels. Current performance measurement models
q Emerald Group Publishing Limited used by construction firms include: the Balanced Scorecard, the European Foundation
1741-0401
DOI 10.1108/17410401211212652 for Quality Management (EFQM) Excellence Model and the Malcolm Baldridge
National Quality Award (MBNQA) (Bassioni et al., 2004). In addition, the management Construction
technique benchmarking has been implemented by construction firms as a means of industry macro
measuring and improving their performance (McCabe, 2001). This is pronounced in the
UK where construction firms utilize key performance indicators (KPIs), which maturity model
according to Kagioglou et al. (2001) provide a measure of project performance with
respect to various parameters such as cost, time and quality. At present, there appears
to be an absence of acceptable performance measurement frameworks/models which 383
measure the performance of the construction industry at the “national-industrial” level.
This is highlighted by the continued reliance on economic indicators and productivity
statistics such as percentage contribution of construction GDP to national GDP,
percentage of work force employed in construction work, growth of construction labor
productivity, and competitiveness of the construction industry. The economic
indicators have an inherent weakness in that they do not necessarily provide an
indication of performance but merely inform as to the level of economic activity within
the industry. Labor productivity measures are inaccurate indicators of construction
industry performance as a result of errors in their measurement and calculation
(Harrison, 2007; Rojas and Aramvareekul, 2003). Also, the structure and characteristics
of the construction industry makes the reliance on labor productivity an unreliable
means of assessing performance (see Bernstein, 2003; Crawford and Vogl, 2006). In
terms of competitiveness, Momaya and Selby (1998) modified and implemented the
multi-facet competitiveness model developed by Porter (1980) to measure the
competitiveness of the US, Canadian and Japanese construction industries. In their
study it was acknowledged that the measurement of competitiveness of the
construction industry provides a contradictory assessment of the industry’s
performance, a finding supported by Dorji (2007) in his assessment of the
performance of the Canadian and Bhutanese construction industries.
Considering the weaknesses of the aforementioned approaches, the new approach
suggested in this study is based on the use of project performance metrics in
conjunction with maturity modeling. The project performance metrics provide a
lagging or after-the-fact assessment of performance, while maturity modeling provides
a leading indicator of the industry’s performance, as well as a context in which to
interpret the lagging indicators of performance. This paper reports on the development
and attributes of the maturity model, the construction industry macro maturity model
(CIM3), and its use to measure the maturity of the New Brunswick construction
industry as an illustrative example.
Figure 1.
Five levels of process
maturity
The assessment of the maturity of a process at the organizational level entails Construction
determining the extent to which the process is defined, managed, measured and industry macro
controlled (Dorfman and Thayer, 1997); and is usually achieved by observing the
practices (i.e. the policies, regulations, activities and infrastructure) that are maturity model
institutionalized within the organization and are used in the processes of the
organization. The utility gained from process maturity modeling has been investigated
by various researchers. In the field of software development, it was found that 385
improved process maturity had the net effect of reducing the overall software
development cycle as well as reducing development effort (Harter et al., 2000), whereas
in the field of project management, Ibbs and Kwak (2000) found that higher levels of
project management maturity resulted in improved project performance.
Based on the above, the CIM3 views the construction industry as being structured as
388 shown in Figure 2, being comprised of KPAs that contain key practices. Simply put, a
key practice is an approach or way in which the construction industry seeks to achieve
a specific objective. It is a description of an activity or set of activities, regulations and
infrastructure that are relied upon to achieve various objectives. Each key practice is
assessed to determine the industry’s capability with respect to that key practice which
is transformed into a level of maturity. There are three possible levels of maturity
associated with each key practice and the determination of each level of maturity is
based on the presence of specific outcomes and/or indicators. The outcomes/indicators
are the tangible or intangible results of the industry’s current capability as it concerns
a key practice.
Each KPA has a performance goal and the key practices within a KPA collectively
reflect the way in which the construction industry seeks to achieve the performance
goal of the KPA. Figure 3 shows the underlying logic of the CIM3 concerning a key
practice and the performance of the construction industry. The maturity of the
construction industry with respect to its key practices informs us of how effective the
construction industry is in achieving specific objectives, which in turn influence the
realization of the construction industry’s overall performance goals. In this way, the
maturity of the construction industry with respect to a key practice provides a leading
indicator of the construction industry’s performance.
Figure 2.
General structure of the
CIM3
Figure 3.
Underlying logic as it
concerns a key practice
and the performance of the
construction industry
Associated with each key practice are three capabilities which reflect a progression in Construction
the level of usage of a key practice. Figure 4 highlights this and shows that the industry macro
presence of each capability is determined based on the existence of specific outcomes
and/or indicators. Capability 1 reflects that the industry’s use of a key practice is maturity model
inconsistent, whereas capability 2 reflects that the industry’s use of a key practice is
standard or consistent, i.e. it is used on a majority of projects and by a majority of
organizations. Capability 3 on the other hand reflects that the construction industry’s 389
use of a key practice is made more effective via performance measurement and timely
interventions.
Each industry capability can be viewed as a “usage threshold” which is transformed
into a specific level of maturity. Capability 1 represents “immature” whereas capability
2 represents “transitional mature” and capability 3 represents “mature”. These three
maturity levels are shown in Figure 5 and are in the form of a step emphasizing that
improving maturity is a “step-wise” progression, i.e. for the construction industry to
progress from being immature to mature with respect to its use of a key practice it
must pass through and spend some time at the transitional phase or transitional level
of maturity. Each level of maturity is assigned a numeric score referred to as the
Figure 4.
The construction
industry’s capabilities
with respect to a key
practice
Figure 5.
The three levels of
maturity used in the CIM3
IJPPM capability score where the “immature” level is assigned a capability score of ?, the
61,4 “transitional mature” level is assigned a capability score of ? and the “mature” level is
assigned a capability score of 3/3. The capability score of a key practice informs us of
the location of the key practice within the maturity framework and is an indication of
the potential for the construction industry to grow or improve its capability with
respect to the use of the key practice.
390 The attributes concomitant with each level of maturity are similar to those of the
micro level maturity models. As such, at the immature level the construction industry’s
use of a key practice is ad-hoc or inconsistent, i.e. there is no formal requirement
governing the use of the key practice and the key practice is not used on all projects or
by all organizations. At the transitional mature level, the construction industry’s use of
a key practice is standard or consistent, i.e. there is a formal requirement governing the
use of a key practice and it is used repeatedly and consistently by a majority of
organizations and/or on a majority of projects. Ultimately, at the mature level the
construction industry’s use of a key practice is proactively managed in addition to
being consistently used by a majority of organizations and/or on a majority of projects,
i.e. the key practice is made more effective through performance measurement and
interventions such as the use of technological aids and innovative techniques.
The reader is directed to the Appendix for a complete list of the cost management and
quality management key practices and their associated objectives.
7. Relationship between key practices and performance Construction
The CIM3 assumes that there is a cause and effect relationship between the key practices industry macro
of the construction industry and the performance of construction projects. In this
relationship the maturity of the key practices within the KPAs both directly and indirectly maturity model
affect the performance of construction projects. This is in keeping with the original concept
of process maturity which states that the quality of a product is directly related to the
quality of the process used to develop that product (Paulk et al., 1995). In the case of the key 391
practices of the CIM3 and their effect on the performance of construction projects, it is
theorized that the performance of construction projects according to a specific parameter of
project performance is dependent on the maturity of the construction industry with respect
to its use of the key practices within its KPAs, which address issues that are both directly
and indirectly related to the specific parameter of project performance. This is because, as
mentioned earlier, the key practices seek to achieve objectives which lead to goals that are
in tune with the performance goals of the construction industry. As an example, consider
the key practice “cost indices are used in the development of construction cost estimates”.
This key practice seeks to achieve the objective of developing accurate and reliable
construction cost estimates. In turn, this objective contributes towards the realization of the
construction industry’s cost performance goal of delivering construction projects within
budget. The efficiency and effectiveness with which the construction industry implements
and uses this key practice influences the extent to which the construction industry’s cost
performance goal is achieved.
Figure 6 is a line diagram showing how the KPAs considered by the CIM3 affect the
various parameters of project performance. Of the seven parameters of project
performance, cost performance will be affected by all the KPAs, whereas performance
Figure 6.
Line diagram showing the
direct and indirect
relationships existing
between KPAs and the
various parameters of
project performance
IJPPM with respect to safety, environment and scope will be affected by only the safety,
61,4 environment and planning KPAs respectively. Quality performance will be affected by
both quality and procurement KPAs, while time performance will be directly affected
by the time, quality, cost, procurement and planning KPAs. Performance in
sustainability will be directly affected by the procurement KPA and indirectly by the
planning KPA. In the line diagram, direct or primary relationships are depicted by full
392 lines and indirect or secondary relationships are depicted by broken lines.
It is through the above relationship that the KPAs and their key practices serve as
leading indicators of performance and provide a fitting context in which to interpret
and compare the performance of the construction industry.
Figure 7.
General implementation
framework used to
implement the CIM3 in
New Brunswick
the key practices and KPAs, and the second part established the construction Construction
industry’s capabilities with respect to each of its key practices. The implementation of industry macro
the first part commenced with each member of the expert group carrying out analytic
hierarchy process (AHP) pairwise comparisons (see Saaty, 1980; Saaty and Vargas, maturity model
2001; Saaty and Liem, 2007) of the key practices and KPAs, and concluded with the
aggregation of the resulting AHP pairwise judgments to produce a single set of
weights of importance for each of the key practices and KPAs. The pairwise 393
comparisons were done using a nine-point fundamental scale of values to express
preference of one key practice or KPA over another. The key practices and KPAs were
considered to be decision alternatives and were compared against the criteria: “which
key practice or KPA is more critical/important to the performance of the construction
industry?” The pairwise comparisons were done at two levels, i.e. firstly at the level of
the KPA and then at level of the key practice. This top down approach was favored
because by comparing the individual KPAs with each other before comparing the key
practices within each KPA the members of the expert group were likely to be less
biased in their comparisons. When comparing the KPAs, each expert asked themselves
“which KPA is more important to the overall performance of the construction
industry”. On the other hand, in comparing the key practices each expert asked
themselves “which key practice is more important to the performance goal of the KPA
they are a part of”. The pairwise comparison scores provided by each expert were then
aggregated and the geometric mean was calculated to produce a set of pairwise
comparison scores that represented the consensus of the expert group. These scores
were then transformed into weights of importance via calculations outlined by Saaty
(1980).
The implementation of the second part commenced by administering a
questionnaire survey to each member of the expert group, after which the responses
were aggregated to determine the consensus of the group. The second part ended with
a random verification of the questionnaire responses.
Using the weights of importance and the capability scores derived from the
implementation framework, numeric scores of maturity were derived. The maturity
scores were derived at three hierarchical levels shown in Figure 8. At level three, a
maturity score for each key practice was calculated; at level two, a maturity score for
each KPA was calculated; and at level one a single maturity score was calculated for
the entire construction industry.
The calculation of the maturity scores is summarized in the following expressions:
At level two : MSKPA ¼ S MSKeyPractice X AHPKPA ð2Þ
where:
.
MSKPA is the maturity score of a KPA; MSKeyPractice is the maturity score of a key
practice; MSConstructionIndustry is the total maturity score of the construction
industry.
IJPPM
61,4
394
Figure 8.
Hierarchical structure of
the CIM3 showing the
three levels of maturity
scores
.
AHPKPA is the weight of importance of a KPA derived via the analytic hierarchy
process.
.
AHPKeyPractice is the weight of importance of a “key practice” derived via the analytic
hierarchy process; and CSKeyPractice is the capability score of a “key practice”.
Figure 9.
Bar chart comparing the
maturity scores and
growth potential of cost
management key practices
IJPPM management key practices showing that key practices CM1, CM2, CM3, CM4, CM5,
61,4 CM6 and CM9 have achieved full maturity and therefore have zero potential growth
remaining. On the other hand, key practices CM7 and CM8 have some potential for
further growth with CM8 being immature, therefore having the most potential growth.
From the perspective of the realization of the objectives of the key practices, the
objectives associated with CM1, CM2, CM3, CM4, CM5, CM6, and CM9 have been fully
396 realized whereas the objectives associated with CM7 and CM8 have only been partially
realized. With respect to the level of influence of the key practices on the construction
industry’s cost performance goal, the bar chart shows that key practice CM1 has the
lowest level of influence and key practice CM5 has the greatest level influence.
As leading indicators of cost performance it appears that key practices CM5, CM7, CM9
and CM6 are the four most significant given their level of influence on the cost
management performance goal, whereas CM1, CM3 and CM4 are the least significant.
Based on this, interventions aimed at improving the New Brunswick construction
industry’s cost performance should firstly focus on improving (albeit the continuation of
proactively managing) the maturity of the four former key practices since these are likely
to better sustain and improve the industry’s cost performance. Although it has not been
emphasized in the above discussion, it should be noted that the maturity of the
construction industry with respect to its cost management key practices will also have an
impact on the time performance of the industry. This is because the consistency and
accuracy with which costs are managed on a project will affect the ability to acquire project
resources at the time they are needed, leading to difficulties in meeting planned schedules.
Figure 10 compares the maturity scores of the quality management key practices. For
these key practices QM1, QM4, QM5, QM6 and QM8 have attained full maturity, while
QM2, QM3 and QM7 are immature. From the perspective of the realization of the
Figure 10.
Bar chart showing the
maturity scores and
potential growth of the
quality management key
practices
objectives of these key practices, the objectives associated with the five former key Construction
practices are being fully realized and the latter three are only being partially realized. industry macro
Because of this, the New Brunswick construction industry’s quality performance goal is
not being fully achieved. The quality management key practices with the greatest maturity model
influence on the achievement of the quality performance goal are QM6, QM8, QM7 and
QM4, with QM6 having the greatest level of influence. The key practices with the lowest
levels of influence on the achievement of the construction industry’s quality performance 397
goal are QM3, QM1, QM2 and QM5, with QM3 having the least level of influence.
As leading indicators of construction industry quality performance it appears that
key practices QM6, QM8, QM7 and QM4 are the most significant. Based on this,
interventions aimed at improving the construction industry’s quality performance
should firstly focus on sustaining and improving the maturity of these key practices as
an increase in their maturity is likely to have a more noticeable positive impact on the
industry’s lagging quality performance. As with cost management maturity, quality
management maturity will also have an impact on the time performance of the
construction industry. The extent and consistency with which quality management is
done on a project will influence the amount of rework required, affecting the likelihood
of on-schedule project completion.
Table I presents the maturity scores of New Brunswick’s construction industry at level
two, i.e. MSKPA, which indicates the level of contribution of a KPA to the overall maturity
of the construction industry. In addition, the table shows the maximum possible maturity
score for each of the two KPAs and their potential growth represented as percentages. For
New Brunswick’s construction industry the quality management KPA has the greater
contribution to the overall maturity of the construction industry with a score of 0.56 while
the cost management KPA has a score of 0.29. This implies that based on the perception
of those within New Brunswick’s construction industry, the current overall or general
performance of New Brunswick’s construction industry is affected to a greater extent by
the maturity of its quality management key practices and to a lesser extent by its cost
management key practices. In terms of the potential growth of the maturity of each of the
two KPAs, the quality management KPA has the greater potential growth, this being
approximately 11 percent while the cost management KPA has a potential growth of just
4 percent. These scores imply that of the two KPAs, the operation of New Brunswick’s
construction industry is likely to be slightly more advanced with respect to its cost
management than with respect to its quality management.
Based on the above, it is advised that any attempt to improve the performance of
New Brunswick’s construction industry should firstly focus on the quality
management KPA than on the cost management KPA. This is because the
maximum possible contribution of the quality management KPA to the overall
maturity of the construction industry is approximately twice that of the cost
management KPA, hence an increase in quality management maturity will result in an
increase in performance that is theoretically approximately twofold in comparison to
9. Conclusion
This paper has introduced the construction industry macro maturity model or CIM3
highlighting its theoretical underpinnings. The purpose of the CIM3 is to model the
Figure 11.
Maturity of New
Brunswick’s construction
industry (cost and quality
management KPAs
considered only)
maturity of the construction industry to provide a context in which to interpret and Construction
compare performance over time and between different regions. This is achieved by industry macro
developing numeric scores of maturity that are based on the relative importance of the
construction industry’s key practices to the performance of the construction industry maturity model
and on the capabilities of the construction industry in implementing its key practices.
Also, by linking the construction industry’s key practices with objectives that lead to
the realization of the construction industry’s performance goals, the assessment 399
provided by the CIM3 serves as useful leading indicators of construction industry
performance that can be used to predict the outlook of the construction industry’s
lagging performance indicators.
This paper has reported on the implementation of the CIM3 using the Canadian
Province of New Brunswick as an illustrative example. The CIM3 was implemented in
New Brunswick providing an assessment of its cost management and quality
management maturity. Integral to the implementation of the CIM3 was the use of an
expert group that determined the relative importance of the cost and quality
management key practices to the performance of the construction industry, and the
capabilities of the industry with respect to the implementation of those key practices.
Combining the weights of importance and capability scores associated with the key
practices produced maturity scores. A comparison of the maturity scores revealed that
the New Brunswick construction industry is more mature with respect to cost
management than it is with respect to quality management. This implies that the cost
performance goal of the industry is being achieved to a greater extent than the quality
performance goal. As leading indicators of performance, this means that the New
Brunswick construction industry is likely to have more negative quality related issues
in the execution of construction projects than cost management related issues.
Although it was beyond the scope of this study, it should be noted that the cost and
quality management maturity of the New Brunswick construction industry will affect
the time performance of the industry given the interrelationships between the project
objectives of cost, time and quality. Since the New Brunswick construction industry is
in transitional maturity with a propensity to being fully mature with respect to cost
and quality management, we can speculate that the construction industry’s time
performance will be fair to good.
The major implication of this study is that researchers and policy makers are now
provided with an alternative to labor productivity and competitiveness as a means of
assessing the current state of the construction industry. Future work associated with
this research includes demonstrating a relationship between the maturity of the
construction industry and its after-the-fact performance. This will be done by
considering the after-the-fact performance of a statistical sample of construction
projects using a set of project performance metrics.
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Appendix
CM1: The earnings of Control and limit the salaries of Deliver construction projects
construction workers adhere to project employees within budget
an industry wide salary scale
CM2: Cost indices are used in the Develop accurate and reliable Deliver construction projects
development of construction cost construction cost estimates within budget
estimates
CM3: Consultancies charge To be adequately reimbursed Deliver construction projects
hourly rates for various design for services rendered and to within budget
and supervision services control and limit the cost of
various consultancy services
CM4: Equipment and labor rates To be adequately reimbursed Deliver construction projects
are charged by contractors for for construction services and to within budget
various types of construction control and limit the cost of
work various construction services
CM5: Construction costs are Inform project stakeholders of Deliver construction projects
monitored and reported during actual project costs during within budget
the execution of projects project execution
CM6: Contractors submit Recover project expenditures in Deliver construction projects
progress payment claims during a timely manner so as to pay for within budget
project execution future project activities
CM7: The client issues Compensate the contractor for Deliver construction projects
intermediate payments to work completed in a timely within budget
contractors within a specified manner so as to aid in the
timeframe contractor having a good cash
flow
CM8: Construction organizations Ensure business operations are Deliver construction projects
use organizational performance within budget and within budget
measures as a means of organizational cash flow is
monitoring and controlling their positive
business operations
CM9: Contractors develop formal Forecast project expenditure Deliver construction projects
cash flow schedules at the and income so as to determine within budget Table AI.
commencement of construction the availability of adequate Cost management key
projects as a means of managing financial resources practices and their
project costs associated objectives
IJPPM Quality management key
61,4 practices Objectives Performance goal
Corresponding author
Christopher J. Willis can be contacted at: c.willis@unb.ca