Sustainable Project Management: Reducing the Risk of Cost Inaccuracy Using a PLS-SEM Approach

Ali Foroutan Mirhosseini,James Odeck,Morten Welde,Kelly Pitera

doi:10.3390/su14020960

Abstract

Determining the factors leading to cost inaccuracy in infrastructure projects relates to sustainability by improving the cost performance of the projects (economic sustainability) and reducing the waste of available resources (environmental sustainability). This study investigates the effects of various factors affecting the cost performance of large-scale road projects in Norway in both the planning and construction phases. To this aim, a quantitative approach using a questionnaire survey was employed to understand the attitude of practitioners towards various factors causing cost increases. An advanced multivariate statistical approach of Partial Least Square Structural Equation Modeling (PLS-SEM) and Relative Importance Index (RII) was utilized to analyze the questionnaire responses. The results of the RII analysis show that local wishes, defective estimations, and long processing times had the most impact on the cost increase during the planning phase. At the same time, scope changes, market conditions, and unforeseen ground conditions were the most influential parameters in the construction phase. Moreover, the results obtained from PLS-SEM reveal that external related factors had the most influence among the other grouped factors (i.e., pre-construction, project management and contractual relationship, contractor’s site management, and external) on cost overrun during the construction phase. Increasing the knowledge of these factors will allow for developing relevant project management approaches targeted at improving economic and environmental sustainability within both the planning and construction phases.

Highlights

Transportation infrastructure is a key element in the development of countries, and the demand for such infrastructure is increasing, while the economic and material resources available are diminishing
To relate sustainability to project management, one should consider aspects that can be addressed by sustainability considerations, including human resources management, procurement, communications, and risk management [1]
The results show that the parameter local wishes without cost responsibility was ranked as the most important cost increase factor, with the Relative Importance Index (RII) value of 0.818

Summary

Introduction

Transportation infrastructure is a key element in the development of countries, and the demand for such infrastructure is increasing, while the economic and material resources available are diminishing. Increased attention has been paid to needs analysis, planning procedures, budget allocation, and the performance of projects to make sure that the right projects are selected for implementation, and that the projects are delivered in a sustainable and efficient way. Sustainability continues to attract considerable attention in many domains, including project management. Sustainability stands on the three pillars (i.e., social, environmental, economic) of the well-known “three P” concept (People, Planet, Profit), which are interrelated and affect each other [1]. To relate sustainability to project management, one should consider aspects that can be addressed by sustainability considerations, including human resources management, procurement, communications, and risk management [1]

Methods

Discussion

Conclusion