i

AN APPRAISAL OF INFORMATION AND COMMUNICATION TECHNOLOGY (ICT) APPLICATION

IN NIGERIAN CONSTRUCTION INDUSTRY

BY

UGWUANYI DONALD CHIDIEBERE PG/M. ENGR/09/51317

A DISSERTATION SUBMITED TO THE SCHOOL OF

POSTGRADUATE STUDIES IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE AWARD OF

MASTER OF ENGINEERING

DEPARTMENT OF CIVIL ENGINEERING

FACULTY OF ENGINEERING

UNIVERSITY OF NIGERIA, NSUKKA

MARCH, 2012

ii

CERTIFICATION

This is to certify that Ugwuanyi Donald Chidiebere, a postgraduate student in the

Department of Civil Engineering with registration number PG/M.ENGR/09/51317,

has successfully satisfied the requirements for the research work for the award of

Master of Engineering Degree (M.ENG) in Material and Construction. The work is

original and has not been submitted in part or full for the award in any institution.

--------------------------------------- -----------------------------

Prof. O. O. Ugwu Date

(Project supervisor)

---------------------------- ----------------------------

Prof. J. C. Agunwamba Date

(Project Supervisor)

-------------------------------- ------------------------

Engr. J. C. Ezeokonkwo. Date (Head Civil Engineering Department, UNN)

------------------------------------------ ------------------------

Engr. Prof. J. C. Agunwamba Date (Dean, Faculty of Engineering, UNN)

--------------------------------------- -------------------------

(Dean, Postgraduate School) Date

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DEDICATION

Dedicated to God Almighty for given me the grace and courage to execute this

research work. And to all those who love the progress of mankind.

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ACKNOWLEDGEMENT

I acknowledge with gratitude my supervisors Engr Prof. O. O. Ugwu and Engr

Prof. J. C. Agunwamba.

I appreciate my father Mr. Joseph M. Ugwuanyi, my mother Mrs Roseline N.

Ugwuanyi and my sister Blessing Ugwuanyi.

I remain indepted to my elder brother, Pharm Francis. O. Ugwuanyi for being a

good brother.

My profound gratitude goes to my friends Bro Michael, Engr.Christian Onu,

Engr Bartholomew Mba, Engr. Mrs Evan Ekoh and Others for their contribution

towards the realization of this research work.

May God bless you all.

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ABSTRACT

This study is aimed at investigating the level of Information Communication

Technology (ICT) applications in the Nigerian Construction Industry; determine the

prospects with respect to benefits, costs, risks and research and development needs

and to make recommendations on possible interventions. Relevant literature on studies

done in other counties and in Nigeria as well was reviewed. A comprehensive

questionnaire was designed and administered to the respondents (construction industry

professional) for data collection and analysis. A total of 63 respondents to a

questionnaire survey most of which were construction companies provided empirical

data for the analysis. Preliminary findings indicate that Nigerian Construction Industry

has not fully appreciated the value of ICT and the impact of its use on the productivity

value chain management. This delay in ICT uptake in Nigerian construction industry

is limiting advances in construction quality, cost efficiencies and competitiveness of

local firms. However, there are indications that the construction companies in Nigeria

are beginning to realize that they would record substantial financial benefits as a result

of ICT implementation and are flexible in the case of adapting to new technology. The

survey through the questionnaire had limitations as it relates to industry best practice

in the international Arena because of varying applications of construction techniques

and methodologies. Furthermore, the survey was relatively small compare to the

target group of over 2000 industry players. This was mainly due to lack of funding

for the research. However, the study establishes a baseline for future construction

sector ICT studies and further registered the sectoral ICT competitiveness of the

Nigeria construction industry.

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TABLE OF CONTENTS

Title page ---------------------------------------------------------------------------------- i

Certification------------------------------------------------------------------------------ ii

Dedication ----------------------------------------------------------------------------------- iii

Acknowledgement ------------------------------------------------------------------------- iv

Abstract -------------------------------------------------------------------------------------- v

Table of content --------------------------------------------------------------------------- vi

List of tables------------------------------------------------------------------------------- viii

List of figures------------------------------------------------------------------------------ ix

1.0 INTRODUCTION --------------------------------------------------------------- 1

1.1 Background of the study---------------------------------------------------------- 1

1.2 Significance of the study---------------------------------------------------------- 2

1.3 Aims and objectives -------------------------------------------------------------- 4

1.4 Scope of the study-------------------------------------------------------------------4

1.5 Statement of problem--------------------------------------------------------------- 5

1.6 Research questions ------------------------------------------------------------ 5

2.0 LITERATURE REVIEW -------------------------------------------------------- 6

2.1 ICT applications in the global construction industry--------------------------- 6

2.2 The development of information communication technology (ICT) in

construction --------------------------------------------------------------------------------- 7

2.3 Current information technologies for the construction sector-------------- 9

2.3.1 Computer Aided Design and Visualization------------------------------------- 10

2.3.2 Building Engineering Applications --------------------------------------- 11

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2.3.3 Computer Aided Cost Estimation------------------------------------------ 12

2.3.4 Planning, Scheduling and Site Management----------------------------- 13

2.3.5 Computer Aided Facilities Management---------------------------------- 13

2.3.6 Integration---------------------------------------------------------------------- 14

2.3.7 Business and information Management----------------------------------- 14

2.4 Current communication technologies for the construction sector----- 15

2.5 Review of related work --------------------------------------------------------- 19

3.0 RESEARCH METHODOLOGY ----------------------------------------- 24

3.1 Research method -------------------------------------------------------------- 24

3.2 Area of study-------------------------------------------------------------------- 24

3.3 Sources of data----------------------------------------------------------------- 24

3.4 The questionnaire--------------------------------------------------------------- 25

3.5 Data analyses technique------------------------------------------------------ 26

3.6 Analysis of data----------------------------------------------------------------- 28

4.0 RESULT AND DISCUSSION -------------------------------------------- 30

4.1 Data presentation-------------------------------------------------------------- 30

4.2 Discussion of findings -------------------------------------------------- 50

5.0 SUMMARY, CONCLUSION AND RECOMMENDATION ------- 54

5.1 Summary-------------------------------------------------------------------------- 54

5.2 Conclusion ------------------------------------------------------------------------ 57

5.3 Recommendation ----------------------------------------------------------------- 58

References ---------------------------------------------------------------------------------- 61

Appendix---------------------------------------------------------------------------------- 66

viii

LIST OF TABLES

Table 2.1: Benchmark metrics for key Enablers & Barriers to IT implementation

Table 3.1: Geographical distribution of questionnaire

Table 3.2: Extent of delivery of IT benefits

Table 4.1: Number of employees

Table 4.2: Specific IT department

Table 4.3: Persons responsible for IT planning and expenditure

Table 4.4: Percentage turnover invested on IT

Table 4.5: Organization‟s annual turnover

Table 4.6: Organization type

Table 4.7: Persons responsible for implementing IT projects

Table 4.8: Persons responsible for IT project justification

Table 4.9: Benchmark metrics for IT application areas

Table 4.10: Benchmark metrics for justification factors

Table 4.11: Benchmark metrics for motivation factors

Table 4.12: Benchmark metrics for strategic benefits

Table 4.13: Benchmark metrics for tactical benefits

Table 4.14: Benchmark metrics for operational benefits

Table 4.15: Benchmark for direct cost

Table 4.16: Benchmark for indirect cost

Table 4.17: Benchmark for risk factors

Table 4.18: IT evaluation techniques

Table 4.19: Benchmark metrics for evaluation process

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LIST OF FIGURES

Figure 2.1: Construction process and IT application

Figure 2.2: Evolution of internet related communication technologies

Figure 2.3: Research framework – ICT applications, success factors, barriers,

benefits and risks.

Figure 4.1: Response on number of employees

Figure 4.2: Reponses on specific IT department

Figure 4.3: Response on person responsible for IT planning and expenditure

Figure 4.4: Response on percentage of turnover invested on IT

Figure 4.5: Response on originations annual turnover

Figure 4.6: Response on persons responsible for implementing IT projects

Figure 4.7: Response on persons responsible for IT project justification

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CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Information and Communication Technology (ICT), also known as information

technology (IT) has radically transformed the way we live, learn, work and play

(Capron 2000). Many companies in the construction industry do not generally appear

to have appreciated the positive changes and advantages that the new technology was

providing to companies in other sectors of the economy. A major construction

process demands heavy exchange of data and information between project participants

on a daily basis (Masqsood et al., 2004). This makes the construction industry one of

the most information-intensive industries, and requires close coordination among a

large number of specialized but interdependent organizations and individuals to

achieve the cost, time, quality and sustainability goals of construction project (Ugwu

et al., 2005). ICT has been shown to be a vital tool in assisting the construction

industry to cope with the increasing complexity of its product and services as well as

the increasing demands of clients and regulators (Betts,1999), and to enhance

construction productivity (Liston et al., 2000). To asses the impact of ICT on

construction in this regard, surveys on the use of ICT in the construction industries of

various countries in different parts of the world have been carried out in recent times.

They include surveys conducted in Canada in 1999 (Rivard, 2000), South Africa in

2000 (Arif & Karam, 2001), Sweden in 2000, Denmark in 2001(Samuelson, 2002),

Malaysia in 2001 (Lim et al, 2002). Turkey in 2001 (Sarshar & Isikdag, 2004) and

Singapore in 2003, (Goh, 2005).

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While most of these surveys have been carried out in highly developed

European countries and Asian economics, only the South African survey by Arif &

Karam (2001) represent an emerging economy in Africa. Oladapo (2007) has also

carried out a survey into the use of ICT in the Nigeria construction industry. However,

his survey apart from it being limited to South West Nigeria, focused more on the

level of computer literacy of construction industry professionals and mode of

acquisition. Oyediran (2005) studied the awareness and adoption of information and

communication technology (ICT) by Architectural, Engineering and Construction

industry educators in Nigeria. Adejimi and Iyagba (2007) compared E-construction

technology for integrating building processes between Nigeria, Canada and the Nordic

countries. Their study however revealed that the digital divide between Nigeria and

the developed world is closing up as more and more computer facilities are becoming

accessible. However, they also indicated that modern and advanced information

technology facilities such as internet, intra/extranet, virtual reality tools, tele/video

conferencing, construction robots etc are grossly inadequate.

The intent of this research work is to ascertain the level of use of ICT in the

Nigeria construction industry and also to determine the prospects with respect to the

benefits, cost, risks and research and development needs.

1.2 SIGNIFICANCE OF THE STUDY

The construction sector contributes significantly to the GDP of a nation. In

developed countries such as Japan and Korea, construction contributes up to 12 to 14

percent of GDP (Gann, 2000). In the developing countries (according to Dharwadker,

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1979) investments in construction projects could be as high as 50 to 60 percent of

national budgets.

In Nigeria, the construction industry was the dominant contributor to the

nation‟s GDP in the 1980s, accounting for about 70 percent of the GDP (Planning

committee on the National Construction Policy, 1989). This made the industry very

strategic to Nigeria‟s development efforts. Unfortunately, however, the industry has

been bedeviled by a combination of low demand and consistent low productivity and

poor performance over the years (Manshued et al 1994; Olomolaiye, 1987; Aniekwu,

1995; Okuwoga, 1998; Adeyemi et al, 2005). This has reduced its contribution to the

national economy to a mere 1 percent of the GDP in 2002 (AFDB/OECD, 2004).

The industry is made up of an organized formal sector and an unorganized

informal sector. The formal sector comprises small, medium and large scale according

to their level of capitalization and annual turnover. The few large firms (mostly

foreign), which constitute just about 5 percent of the total number of contractors in the

formal sector, control about 95% of the construction market, giving the small firms

just about 5 percent share of the market. The results of this study will impact the

Nigerian construction industry in the following ways;

Delineate the ICT application areas and the level of adoption.

Highlight the benefits of ICT application in construction at the strategic,

tactical and operational levels.

Serve as a guide to construction organizations in the area of the cost of ICT

adoption (both direct and indirect cost); and the risks involved.

Research and development.

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1.3 AIMS AND OBJECTIVES

Oladapo (2006) had reported that the construction industry in Nigeria has

during the past few years increased its use of ICT. However, very little is known about

the impacts of the technology on the industry and the prospects for its widespread

penetration of the industry. This is because very few reports exist of research in ICT in

developing countries, including Nigeria (Pamulu & Bhuta, 2004). Against this

background, the objectives of the study are to:

Assess the impact areas and the level of used of ICT by construction

companies in Nigeria.

Evaluate the benefits (strategic, tactical and operational) of adopting ICT in

construction.

Evaluate the cost implication of adopting ICT in construction.

Assess the risk factors.

It also intends to bring to the fore the current direction of development of ICT and to

determine the prospects for research and development needs in the Nigerian

construction industry.

1.4 SCOPE OF THE STUDY

The research covers a review of ICT adoptions and applications by some

construction companies in Nigeria. The companies under study are both foreign

companies (Julius Berger, Costain, RCC, CCECC, Bulletin, Hitech, PW, Setraco etc)

and indigenous (Ferotex, Master holdings, Maloon, Amec, Jukok, Amumco global,

Horoda Ltd, Richgold, Tetratech etc) operating in Nigeria. Appropriate quantitative

techniques were employed in analyzing the data gathered.

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1.5 STATEMENT OF PROBLEM

Numerous problems are being encountered by the construction companies in Nigeria.

Most of these problems are ICT related. The problems range from low level of ICT adoption

to incompetence in the use of the ICT as follows;

Inefficiency

Low profitability

Low quality production

Poor management of business process

Poor supply chain management

Inability to satisfy client needs

Increased cost of business process

Lack of standardization.

1.6 RESEARCH QUESTIONS

Owing to the numerous problems encountered by construction companies

from non adoption or low adoption of ICT to the problems encountered even when it

is adopted, the following research question were formulated.

What are the ICT application areas and the level of adoption of ICT by

construction companies in Nigeria?

What are the benefits obtained as a result of ICT adoption?

What are the costs implications of ICT adoption?

What are the risk factors of ICT adoption?

Does the benefit derived from ICT implementation justify its investment?

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CHAPTER TWO

LITERATURE REVIEW

2.1 ICT APPLICATIONS IN THE GLOBAL CONSTRUCTION

INDUSTRY

During the 1980s PCs were only used in few construction companies. Throughout

the 1980s, although most building firms were using computer technology for many of

their core functions such as accounting, wages and salaries, very few of them evolved

formal polices or strategies concerning the use of information and communication

technology.

By the latter part of the 1980s, about eight years after the introduction of

reliable PC equipment, some companies had reached a situation in which their staff on

many of their larger projects were experiencing the advantages of the new technology

through the use of planning, drawing, spreadsheet and word-processing software

packages.

Today, a large number of software packages are available to all the disciplines

of the construction team at every stage of the construction process. They provide

support for a broad range of activities such as computer aided design and drafting,

building visualization, design appraisal, project management, information storage and

retrieval, cost estimation, structural analysis, on-site management, facilities

management etc.

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2.2 THE DEVELOPMENT OF INFORMATION AND COMMUNICATION

TECHNOLOGY IN CONSTRUCTION

The use of information and communication technologies (ICTs) in the

construction industry is generating new opportunities for collaboration, coordination

and information exchange among organizations that work on a construction project.

Complex technical systems do not evolve fully formed, but rather as localized

developments. In the development of automated systems for transfer and

transformation of materials, this unbalanced evolution leads to the problem of “Islands

of automation”, where highly automated materials flow is mixed with completely

manual ones. The same problems exist in the development of computerized

information systems. The development of computing technology has meant that tools

for analysis involving data manipulation have tended to develop earliest and in

isolation. These tools show the enormous strengths of computer in the rapid analysis

of complex data sets-analysis which is frequently impossible if manually attempted.

Thus standalone applications dependent on numerical analysis, ranging from finite

element analysis to critical path analysis, had been developed by the 1960s.

Information flows between these types of applications continued to use traditional

information technologies such as the paper-based engineering drawing.

During, the 1970s, a new form of graphical manipulation was developed to aid

the creation of engineering drawings-computer aided design (CAD). Again, the output

from these systems largely relied on traditional technologies for communication

between different applications. The construction industry was at the forefront of these

developments. By the fourteenth century scaled technical drawing, probably the most

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important information technology of the last millennium after the printed book itself

were well established for use on religious and royal building projects.

During the 1970s, large public sector projects-usually relying on extensive

standardization and prefabrication offered the opportunity to develop CAD system.

However, the demise of the large public sector construction programmes which have

been essential to the development of ICT applications in every industrial sector meant

that this initial momentum was lost (Howard 1998).

The 1980s saw the development of the personal computer (PC) which

dramatically reduced the cost of computing power, and enabled a much wider

diffusion of computers within the industry, while the processing power of computers

continued to grow exponentially. Most importantly, site offices could now be

equipped with computers. The development of communication technologies has taken

an independent path. In comparison with computer technologies, developments were

earlier and more profound. The telegraph and, more importantly, the telephone,

greatly improved communication capabilities. The fax and photocopier are more

recent innovations which have had a significant impact. Nonetheless, these

communication technologies did not allow any further manipulation of the received

data. It was not until 1970s that they began to be connected to computers to provide

integrated systems for the direct communication of information between computer

systems. The development of Local and Wide Area Networks (LANs and WANs)

proceeded steadily, but interconnectivity between computers was transformed by the

breathless diffusion of the internet during the 1990s.

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It is this rapid development of the interconnection between communication and

information technologies that has both opened up tremendous new opportunities and

posed new technical challenges.

2.3 CURRENT INFORMATION TECHNOLOGIES FOR THE

CONSTRUCTION SECTOR.

Information technologies or software application are available to support most

aspects of a construction project. These applications can be grouped into the following

categories (Sun & Howard, 2004):

Computer Aided Design and Visualization

Building Engineering Applications

Computer Aided cost Estimation

Planning, Scheduling, site Management

Computer Aided Facilities Management

Integration

Business and Information Management

Figure 2.1 is a roadmap showing where and when these applications are being

used along the construction process. The main purpose of the diagram is to

indicate the main application areas for the existing discrete software package in

the construction supply chain.

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Figure 2.1: Construction Process and IT application (adapted from, Life

Cycle management system for construction. 2000)

2.3.1 Computer Aided Design and Visualization

Computer Aided Design (CAD) software is widely used by design professionals

and AutoCAD has the largest share of the CAD market (Howard 1998). Other popular

CAD software includes Microstation, ArchiCAD, MiniCAD, FastCAD, Autodesk

Revit etc. These CAD programs have largely replaced the traditional drawing board at

the production information stage. The basic function of CAD tools is allowing the user

to build up drawings by manipulating lines, circles, rectangles and texts interactively

on the screen. The clear advantage of CAD software is the ability to allow „editing‟,

which means delete, move, copy, rotate, scale, mirror etc. Furthermore, since the

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drawing can be saved at any stage, the designers are able to keep various versions of

the building layout for later study. Once the geometrical information of the building

design is stored in a CAD package, different views of the building can easily be

produced. Visualization and animation systems, like 3D studio, can produce photo-

realistic, static and moving images, so that the clients can view the final appearance of

the building at the design stage. Virtual reality technology even allows the user to

interact with the design model and experience the building in simulated reality

settings, including simulated construction sequence.

2.3.2 Building Engineering Applications

Nowadays, construction industry clients have ever higher expectations. They

want their buildings to look good, to be safe, to provide comfortable living

environment for their occupants, to consume less energy in operations, etc. The ever

more complex demands on the building design process have given rise to the need for

a new approach to building engineering design based on computer software. Once a

building is constructed, it is very costly to correct any design defects. It is, therefore,

important to simulate accurately the building performance at the design stage so that

problems can be identified and solved. Over the years, a variety of methods and

algorithms have been developed to predict building performance in thermal, lighting,

acoustics, and structural aspects. Because of the complex and tedious calculation that

involve these simulations, it was nearly impossible to carry them out before

computers. During the last two decades a range of building engineering applications

have been developed for energy analysis, HVAC design, structural analysis, lighting -

simulation, etc. The benefit of these applications is that they allow designers to

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evaluate alternative design. Examples of this software are: ATEAN from carrier, and

CARGASW from climasoft, that offer comprehensive range of software options for

climatic energy design; CALCULUX from lighting and building services design,

CYPE INGENIEROS S.A. for structural design, cosmos for finite element analysis,

DUCTSIZE from Elite software for electricity and water net design.

2.3.3 Computer Aided Cost Estimation

Controlling cost is one of the most important requirements during a

construction project. To achieve this, contractors and subcontractors must first make

accurate cost estimation. Rigorous project accounting must then be used to control the

spending. Today, there are sophisticated computer software packages, such as Esti-

Mate, Manifest, FBS-Estimator, and Presto from soft, GO from star, ITEC and ARQ

from AM2, which allow project managers to make estimations and to keep track of

project spending. Other software can help to measure, count, compute and tabulate

quantities, lengths, areas, volumes etc, of objects found in plans and specifications.

Furthermore, most cost estimating programs can be integrated with databases of cost

for labour, materials and equipment. The advantage is that cost data do not need to re-

entered, thus improving the clearity in estimating and avoiding errors. Computer

based estimation of costs archives and retrieves large volumes of resource, cost and

productivity information, makes fast and accurate calculations and presents results in

an organized, neat and consistent manner.

2.3.4 Planning, Scheduling and Site Management

Construction works require careful planning and skilful management of human

and physical resources. Computer system can assist on-site managers to plan ahead,

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evaluate different options and adopt and execute the most efficient construction

operation. Besides the widespread use of planning packages such as Microsoft project,

primavera, Power project, etc, to plan and schedule detailed construction activities,

some applications like Job Master, ICON, GEST, and Presto Control, are designed to

log and track internal processes during the construction phase. Site operation

simulation programs can emulate what happens in a real construction site by

representing workers, machines, and materials, and computing the cycle of each step

taking into consideration many uncertain factors (Paulson 1995).

2.3.5 Computer Aided Facilities Management

Facilities management is a discipline that emerged in the early 1980s. It is

based on the operation, maintenance and impact of the building operations on the life

cycle cost. The available software for facilities management is a combination of CAD

and database management system. Special routines enable blocking and stacking

studies to be carried out to explore different layouts or to reflect organizational

changes. Databases are the most important part of facilities management software. It

holds data from people and their services so that when they move, their services can

follow them. ITE (Inspeccion Tecnica de Edificios), for example, is a tool that makes

it possible to create a report of the state of the building.

2.3.6. Integration

From the first software applications many different tools were developed. They

use their own data formats, which are not compatible with each other. As a result, data

cannot be electronically exchanged between them. In recent years, there is an

increasing awareness of the need for integrated construction processes and many are

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investigating related issues. During the last two decades, advances in object oriented

programming, database systems and product data modeling technologies have

provided a solid platform for integration. Data standards are being developed first by

the international standards being developed by the international standards

organizations (STEP), and then by the International Alliance for Interoperability

(IFC). At present, these standards are still evolving. An integrated project database

that cover the whole life cycle of construction projects remains a future prospect.

2.3.7 Business and Information Management

The construction process is an information intensive one during which a huge

amount of information is generated and consumed by all the professional involved.

The common type of information includes site survey, cost analysis, design drawing,

documents, correspondence, fax, computer files or e-mails. Electronic Document

Management System can create an environment in which disparate forms of

information can be linked together, within the context of a project or organization, to

achieve easy access and control. All the previous tools and software for cost

estimating, planning, scheduling, etc, are generated in a specific stage of the project.

Sometimes this information is updated, modified, consulted, etc, at any moment of the

project. Consequently, Document Management Systems are tools that comprise

whatever information throughout the life cycle of the project, from the conception of

the need to the maintenance. Electronic Document Management Systems are

applications that can be linked to Web Based Project Management Systems to

improve communication among partners and between them and the management of

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the project. In addition, Web Based Project Management Systems have other

functionalities like project coordination, scheduling, etc.

2.4 CURRENT COMMUNICATION TECHNOLOGIES FOR THE

CONSTRUCTION SECTOR

Communication technologies are the technologies dealing with the

transmission of information. They support the process by which information is

exchanged. Figure 2.2 shows the evolution of some information technologies (main

communication technologies) in construction. They are positioned according to their

complexity (Vertical axis) and construction specifics (horizontal axis). It is noted that

the most specific services tend to use or rely upon the generic ones, and that the most

complex service tends to integrate simpler ones.

The first services were generic and included networked file archives, e-mail

communications and text-based group conferencing. The web provided a much

friendlier navigation and presentation of the files on remote machines. It was at the

time when first construction related content appeared. Out of the first 100 websites

only two were related to construction. The first construction specific services used the

web to publish information such as scientific papers, building codes, product

specifications, etc. the next generation services were starting to use the internet as a

collaboration platform for the companies involved in a construction project (Turk &

Cerovsek, 2008).

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Figure 2.2: Evolution of Internet Related Communication Technologies

(Adapted from, Life Cycle management system for construction. 2000)

Since 1998, however, construction has been following trends of general service

supplied on the internet. A business model of the providers of various kind of internet

related software (e.g. For managing mailing lists, discussion forums, help desk, photo

albums, etc) has evolved from the sale of software for the users to install on their

servers, to the offering of a service on their website, that offers the same functionality

to the end user. In the construction context there are now dozens of companies

providing collaboration tools such as document managing tools, project coordination

and scheduling.

E-Business/Commerce: This is modern business methodology that addresses

the needs of organization to cut cost while improving the quality of products and

services and increasing the speed of service delivery. It can be viewed from multiple

17

dimensions including communications and business processes. From communication

perspective, E-commerce is the electronic delivery of services and information. From

a business process perspectives, it is the automation of business transactions and

process.

The main E-commerce application areas include

Company/product promotion

E-procurement through search engines and Web directories

Project management/online project collaboration.

Future trends in E-commerce include

M-Commerce: Technology has now matured and makes it possible to connect,

mobile devices such as mobile phones, and Personal Digital- Assistants

(PDAs). Thus current researches are investigating the opportunities in mobile

electronic commerce or M-commerce in infrastructure delivery and mega

project management.

Wireless Communication (Bluetooth Technology): Bluetooth is a form of

wireless technology that removes the need for cables connecting computer

equipments. This should enable remote connectivity and distributed

collaborative working.

Agent–Based Procurement of Goods and Services: Agent and Multi-Agent

Systems (MAS) have been deployed in collaborative working to automate

some tasks. In this situation, artificial agents representing their owners,

execute delegated functions on their owner‟s behalf. Several potential

application areas in construction include: Collaborative design,(Ugwu et al

1999; 2003; 2005;) negotiation, claims management, e-procurement, ( Ren et

18

al 2005) information searching and retrieval, supply chain coordination, and

standards processing (Udeaja et al 2005). Such state- of-the art applications

mark fundamental shift from software-as-tool to software-as-assistant.

Anumba et al (2005) discussed details of applications of intelligent agents and

multi-agent systems in construction.

WWW & Web Portals: This is the major trend in collaborative working with

several applications in several sectors. It is now part of routine daily lives for

business process improvement especially in developed economies that can

provide the supporting infrastructure. This has also resulted in a bipolar digital

divide (BDD) between rich and poor nations with significant impacts on ICT

applications in the construction sector in different countries.

Peer-to-peer (P2P) computing: Peer-to-peer is a communication model in which

each party has the same capabilities and either party can initiate a communication

session. In some cases, peer-to-peer communication is implemented by giving each

communication node both sever and client capabilities. In recent usage, peer-to-

peer has come to describe applications in which users can use the internet to

exchange files with each other directly or through a mediating server [URL2P2P].

One potential advantage of P2P is that it could be used by corporations to enable

their employees to share files through the internet network, without the expense

involved in maintaining a centralized server. This means that employees (or more

specifically their machines) are able to exchange business information with each

other directly on a peer-to-peer basis. The technology has potential huge

applications in integrating seamlessly, the construction supply chain, starting from

19

product order receipt and configuration to manufacture and delivery (Ugwu

2005b).

Service-Oriented Architectures (SOA) & Web services: Service-oriented

Architecture (SOA) takes the WWW and Enterprise Integration Application (EIA)

solutions to the next level. At the basic level, it involves mapping business

processes to objects that are wrapped in software systems and not visible to the

users. The objects are dedicated to solving specific business process problems e.g.

retrieve document, upload document, send message, search for information,

compute sustainability index, etc. These functions are called services because they

enable each application to call up other‟s services. The application‟s services are

made available through the web interface, and are broadcast on WWW as web

services. Consequently, any application can call up the services as long as the

applications all adhere to defined protocols for service request and delivery. SOA

applications rely on eXtensible Mark-up language (XML) to address

interoperability problems. Additional information on the application of SOA

concepts to sustainability appraisal and knowledge management can be found in

(Ugwu 2005b).

2.5 REVIEW OF RELATED WORK

Studies have been carried out to determine the critical success factors, the

barriers and enablers to ICT application in construction projects to harness the

technology and streamline business process in emerging economies. The general

problem addressed is what are the critical success factors, (CSFs), and barriers that

impact the implementation, adoption, usage and diffusion of ICT in the construction

20

industry? Such a framework should enable identification of at-risk IT projects during

the early stages of project evaluation and facilitate formulation of appropriate risk

mitigation measures. Ugwu et al (2006) discuss further details on the research.

There is an abundance of documented literature that describes various projects in

construction, which focus on IT-driven construction process innovation. However,

while the majority of the research focuses on developing improved products, process

and computational models, there is a noticeable dearth of research that focuses on

issues and factors that impinge on the uptake of IT systems in construction, including

stakeholders‟ perceived benefits cost and risks of IT systems in practice Ugwu et al

(2006). An adequate understanding of perceived and expected benefits would

facilitate an unambiguous understanding of user requirements and subsequent

translation into system functional specification during development. IT

implementation in construction results in significant changes and potential

improvements in design and management processes within the organization. It is

therefore necessary to investigate critical success factors as well as inhibiting factors.

Some research in mainstream computing and software development have investigated

the socio-technical aspects of systems development and application in organization

(Barrow, 1999), Bingi et al (1999), Holland and light (1999), Bourque et al (1999),

Hondeshel and Watson (1990), Watson et al (1991), Watson and Frolic (1993). Other

researches reported in literature have focused on investigating the various basic and

niche application areas of IT in construction. Such studies have been conducted in

Singapore (Hua, 2005), Norway (Samuelsom, 2002) Scandinavia (Howard et al 1998),

New Zealand (Doherty 1997), UK (Egbu & Botterill (2002)), (Ugwu et al 1999). The

21

proliferation of research on IT barometers in construction on national and cross

national basis indicates increasing interest to investigate socio-technical aspects of

software development and use in the Architectural, Engineering and Construction

(AEC) sector.

The research model was designed to investigate various related questions

outlined. The research instrument includes a combination of structured open-ended

interviews, questionnaires and evidence based research used for further validation.

Several research methods were adopted in the multistage research. The first stage used

a combination of pilot questionnaire survey, structured interviews with senior

personnel of leading construction organizations, and deductive analysis techniques for

interview protocol analysis (Ugwu et al, 2003a). The second stage used a

questionnaire-based survey and case-study/evidence-based research techniques.

Figure 2.3: Research framework – ICT applications, success factors, barriers,

benefits and risks. (Source: Ugwu et al 2007)

22

Fig.2.3 shows the research model used to investigate the various related questions.

The research framework was broad and covered different dimensions of information

and communication technology (ICT) in architecture, engineering and construction

(AEC) sector. These include; current applications of IT in construction, success and

inhibiting factors, perceptions of IT application areas in solving construction

problems, and organization strategic directions in IT application.

Ugwu et al (2006, 2007), discussed detailed analysis of the results of research

and case study projects that identified the key enablers and barriers to ICT application

in construction projects in Hong Kong, and then posited several lessons for emerging

economies of which the Nigerian construction industry is one of them. Table 4.23

shows the rankings using the computed IT- benchmark indices. From the table, the top

ten ranks in descending order are: Cost of development, Top management support

(leadership), Appropriate hardware technology, Appropriate software (off the shelf),

Ease of use, Development team knowledge and understanding of construction

processes &business environment, Clear definition & understanding of user

requirement, Clear communication of IT objectives to management, End-user

involvement, and IT competence of in-house team. Further analysis of the responses

reveals that contractors ranked “Ease of use” and “Change management at

organizational level” as the first and second most significant success factors

respectively, while the whole group of respondents collectively rank these as 5 and 6

respectively. Ease of use is a major issue that system developers must address in any

ICT project to minimize training requirements and the associated operational cost.

Change management is a wider issue to address by the management to ensure that

adequate measures are taken to cushion the impact on the work force, often

engendered by change in business process that result from introducing ICT systems.

Table 4.23 summarizes their Hong Kong construction industry studies.

23

Table 2.1: Benchmark metrics of key Enablers & Barriers to IT implementation

(Source: Ugwu et al 2006, 2007)

24

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 RESEARCH METHOD

A research method in the form of questionnaire was adopted for the purpose of

generating data. The work reviewed and analyzed the various aspects of ICT-

applications in construction. The themes and issues covered in the research include:

ICT application areas, strategic, tactical and operational benefits, ICT implementation

costs (both direct and indirect costs) and ICT implementation risks. Data analyzed

were both descriptive and quantitative. The result was used to establish rankings of the

benchmark indices among various issues.

3.2 AREA OF STUDY

The research work studied ICT applications in construction companies in

Nigeria. To this effect, effort was made for the study to cover construction companies

domiciled in each of the six geo-political zones in the country. This is to make the

work as representative as possible.

3.3 SOURCES OF DATA

To realize the objectives of this study, the following two main types of data

were employed; primary and secondary data.

a. Primary Data: Primary data were derived from questionnaire, which were

distributed to engineers and managers of different construction companies. This

was designed to gather valid and reliable information through the response of

the interviewee to a planned sequence of questions. The structured interview

was to gather valid and reliable response while the unstructured interview was

used in desiring more precise generalization.

25

b. Secondary Data: Secondary data were collected mainly from review of

published and unpublished materials including relevant textbooks journals and

magazines.

3.4 THE QUESTIONNAIRE

A comprehensive questionnaire was designed and administered to the

respondents for data collection and analysis. The questionnaire used a five-point

Likert-type scale to measure a range of issues from “Not at all” to “Very large extent”

as the case may be. The questions posed in the questionnaire were structured to limit a

range of responses and still be sufficient. For authenticity and data integrity, the

questionnaire was administered directly to the engineers and managers of the different

construction companies.

The questionnaire was delivered to the respondent by hand in August, through

the researcher himself. It was collected from the respondents after a time interval,

(November) by the researcher. This is to enable the respondents have a sufficient time

for a better appreciation of the questionnaire.

26

Table 3.1: Geographical distribution of questionnaire

Geo-Political Zone States Visited No Distributed No Returned

South West Lagos 50 15

South South Akwa Ibom, Rivers

And Cross Rives

35 10

South East Enugu 59 17

North West Kaduna Kano 23 6

North East Adamawa 15 3

North Central Abuja 44 12

TOTAL 226 63

Source: primary data

3.5 DATA ANALYSES TECHNIQUE

3.5.1: Descriptive Statistics and t-test

In analyzing the data collected, basic statistics such as simple percentages,

charts and tables were used. The analyses also used a simple statistical analysis in

which the rankings of the benchmark indices of various issues were compared. This

benchmark statistic took the view of all respondents into consideration with further

sub-group analysis. The data generated were analyzed using mean item scores to

generate ranking of the variables of interest.

27

In calculating the IT benchmark index ( ,biIT ), all the numerical scores for the

constructs where transformed to indices to assess their relative rankings (Love and

Irani 2004). The ,biIT was calculated using the following formula:

biIT 10,

biITAN

w (1)

Where

biIT IT benchmark index.

w = weighting given to each factor by the respondent, which in this ranged from 1

to 5 where 1 is “not at all” and 5 is “a very large extent”.

A = the highest weighting, which is 5, and

N = the total number of respondents.

A statistical test of difference of means called the t-test was also used in testing

the hypotheses. The t-test is a parametric statistical tool used to determine whether

two means are significantly different at a chosen level of significance. The significant

agreement or otherwise with the notion being tested was determined by adopting the

mid-point value of the index (that is 3) as the hypothesized mean (Coakes and Steed,

2001). This implies that any value significantly different from this unsure value was

assumed to be either positive or negative to the notion being tested (Pullin and Haidar,

2003). The t-test statistic for a one-sample t-test is given by;

ns

xt o

/

(2)

Where;

o = specified mean value

x = sample mean

28

S = sample standard deviation

n = sample size.

All tests were carried out at 0.05 level of significance and (n-1) degrees of freedom.

The decision rule criterion stipulates that if the calculated t-test value is grater than the

tabulated t-test value (see appendix B) the null hypothesis is rejected, and the

alternative hypothesis is accepted. On the other hand, if the calculated t-test value is

less than the tabulated t-test value, null hypothesis is accepted and the alternative

hypothesis is rejected at the chosen level of significance.

3.6 ANALYSIS OF DATA

TEST OF HYPOTHESIS

Table 3.2: Extent of Delivery of IT Benefits

Response Very large extent Moderate extent Not at all

Weight 5 4 3 2 1

Frequency 19 20 21 2 1

Source: primary data

OH o : [The benefit derived from adopting IT does not justify its investment]

OH :1 [The benefits derived from adopting IT justify its investment]

We test this hypothesis by using the response from table 3.2.

Mean 857.3x

29

Standard deviation = 94.0

Sample size 63

Specified mean 3o

Substituting in t-test formula,

202.763948.0

3857.3

ns

xt o

202.7calt

From the t-test table in appendix C at 0.05 level of significance and n – 1 degree of

freedom, we have the value of 1.999

tablet = 1.999

Decision Rule:-

Since the calculated t-test value of 7.202 is greater than the tabulated t-test value of

1.999, the null hypothesis is rejected and the alternative accepted.

Conclusion:-

It can, therefore, be concluded that the benefits derived from adopting IT for enhanced

business process justifies its investment.

30

CHAPTER FOUR

RESULT AND DISCUSSION

4.1 RESULT PRESENTATION

From the 226 questionnaires that were distributed to construction

companies, a total of 63 completed questionnaires were returned after follow-up

communications with the organizations and professionals the questionnaires were

given to. This gave a response rate of 27%. The response is very low as, according to

Ellhag and Boussabaine (1999) and Idrus and Newman (2002) a response rate of 30%

is good enough in construction studies. This is attributed to lack of adequate funding

for the research and restrictions to fieldwork in the northern part of Nigeria due to

current crisis. The results of the geographical distribution of questionnaire are

presented in, Table 3.1.

4.1.1 Number of Employees in Respondents Office.

As indicated in question 1 of the questionnaire, the responses on the number of

people currently employed in the respondent‟s offices are shown figure 4.1.

31

The result shows that 13% of the respondents have less than 10 people employed in

their offices, 40% employed from 11 to 30, 23% employed from 31 to 50, 10%

employed from 51 to 100 and 14% employ from 101 to 250. This indicates that the

respondents include small, medium, and large-sized organizations.

Table 4.1: Number of Employees

Item < 10 11 – 30 31 – 50 51 - 100 101 - 250

Number 8 25 15 6 9

Percentage 13 40 23 10 14

Source: primary data

4.1.2 Job Title

The questionnaire indicated that the respondents are professionals in the

construction industry with job titles; project manager, project Engineer; Civil

Engineer, Site Engineer, Construction Manager, Consulting Engineer, QA/QC

Engineer, Structural Engineer, Batch plant Engineer, Project Supervisor, Contract

Engineer, Geotechnical Engineer, Draftsman, and Quantity Surveyor.

32

4.13 IT Department

Figure 4.2 above elicited response on whether organization has specific IT

Department. 80% admitted that they have a specific IT department, 20% had no

specific IT department and 0% for no response. Most of the organizations surveyed

make use of computers as a tool for enhanced business process which is in line with

Oldaapo (2006) which indicated that the construction industry in Nigeria has during

the past few years increased it‟s use of ICT. The response also agreed with Oladapo

(2007), which indicated that most of the respondents were optimistic about the future

of ICT applications in the Nigerian construction industry. However, this high rate of

positive response to specific IT department is attributed to organization sampling. This

is because most of the respondents‟ organizations are foreign firms. A more reliable

result may be achieved by eliciting response from a larger sample with more local

firms.

33

Table 4.2 Response to Specific IT Department

Specific IT Department Yes No No Response

Number 50 13 0

Percentage 80 20 0

Source: primary data

4.1.4 Person Responsible for IT planning and Expenditure

Figure 4.3 above elicited response of the interviewees on persons responsible for IT

planning and expenditure. 65% of the respondents indicated that an IT specialist is

responsible for IT planning and expenditure in their organization, 15% indicated that

persons other than IT specialist are responsible for IT planning and expenditure and

20% of the respondents had nobody responsible. This implies that most of the

respondents‟ organizations understand the potential benefits of ICT applications as a

tool for improved business process in the construction sector and hence employ

34

experts for IT planning and expenditure. However, a reasonable number of the

respondents have applied ICT in their business process.

Table. 4.3: Person Responsible for IT Planning and Expenditure

Item IT Specialist Others None

Response 40 10 13

Percentage 65 15 20

Source: primary data

4.1.5 Percentage of Turnover Invested on IT

From figure 4.4 and table 4.4, 31% of the respondents invest between 1-5% and 6-

10% of turnover on IT, 27% invest 11-20% of turnover, 10% invest more than 20% of

turnover and non of the respondents invest less than 1% of turnover on IT. About 60%

does not invest more than 10% of turnover on IT, this represents a low rate of

investment on IT.

35

Table 4.4: Percentage of Turnover Invested in IT

Item < 1% 1 – 5% 6 – 10% 11 – 20% >20%

Response 0 20 20 17 6

% Response 0 31 31 27 10

Source: primary data

4.1. 6 Organization Annual Turnover

From figure 4.5 and Table 4.5, 39% of the organization has an annual turnover of

more than N250M, 31% has annual turnover of N101-250M, 17% has annual turnover

of N51-100M, 6% has annual turnover of N11-50M, 5% has annual turnover of N1-

10M and non of the organizations has an annual turnover of less than N1M. About

70% of the respondents‟ organizations record an annual turnover of up to N250M.

This indicates that most of the organizations are medium to large-scale organizations.

36

Table 4.5: Organization Annual Turnover

Item <N1M N1–10M N11-50M N51-100M N101-250M >250M

Response 0 5 4 11 20

23

Percent 0 7 6 17 31 39

Source: primary data

4.1.7 Organization Type

The respondent‟s organization types were mostly contractor representing about 96%

of response.

Table 4.6: Organization Type

Organization Type Contractor Others

Response 61 2

% Response 96 4

Source: primary data

4.1.8 Person responsible for implementing IT projects

37

From fig 4.6 above and table 4.7, 84% of the respondents admitted that an IT

specialist is responsible for implementing IT projects in their organizations, 10% of

the respondents for a Non IT Business Manager, 4% of the respondents admitted that

both are responsible and no response for others. Most of the organizations had an IT

Specialist responsible for implementing IT projects. This indicates that a majority of

the organizations appreciates the role of ICT in the construction value chain by

employing IT experts to be in charge of implementing IT projects.

Table 4.7: Person Responsible for implementing IT Projects

Response IT Specialist Non-IT Bus. Manager Both Others

Number 53 6 4 0

Percentage 84 10 6 0

Source: primary data

4.1.9 Person responsible for IT Project Justification

38

From fig 4.7 above and table 4.8, 68% of the respondents admitted that IT Department

management is responsible for IT project justification, 32% of the respondents for

Business Management and none for others. This is also a confirmation of the previous

finding that the respondent‟s organizations agree that ICT has the potential to improve

construction quality, cost efficiency and competitiveness of their organizations.

Table 4.8: Person Responsible for IT Project Justification

Response IT Dept. Management Bus. Management Others

Number 43 20 0

Percentage 68 32 0

Source: primary data

4.1.10 Issues Concerning Organization’s Approach to Implementing IT

Question 22 of the questionnaire elicited response on the most serious issues

concerning organization‟s approach to implementing IT. The most prominent issues

are cost issues such as “cost of software and hardware”, “maintenance cost”, “training

cost”, “operating cost”, and “issued regarding training and retraining of IT staff”.

“Others are issues of budgetary allocation on IT”, “consultancy and frequent policies

on updating”. This agrees with Oladapo (2007) which stressed that among the major

constraints to the use of ICT are “insufficient/irregular power supply” and “high cost

of ICT software and hardware”.

39

4.1.11 IT Application Areas

Table 4.9: Benchmark Metrics for IT Application Areas

Application Areas ITabi Rank

Engineering design 0.946 1

Communication (e.g. e-mail) 0.942 2

Construction project program 0.882 3

Cost and supply management 0.844 4

Information exchange (e.g. Drawings) 0.761 5

Web based project management (e.g. Extranet, Intranet ) 0.526 6

3D design visualization 0.473 7

E - tendering 0.469 8

Geographical information system (GIS) 0.425 9

ITabi – application benchmark index Source: primary data

Table 4.9 shows that Engineering design, Communication (e.g. e-mail) and

construction project program, are among the most common application areas and thus

are ranked 1, 2, and 3 respectively. However, advanced ICT applications (web based

project management system, 3D design visualization, e – tendering and Geographical

information systems) are not common in the local construction industry. This is in line

the findings of Oladapo (2007), which stated that the main uses of ICT in the industry

are word processing, internet communications, costing and work scheduling.

40

4.1.12 Organization Justification Process for implementing IT.

Table 4.10: Benchmark metrics for justification factors

Justification Process ITjbi Rank

Limited managerial and technical knowledge 0.758 1

A multiplicity of justification and implementation paths 0.755 2

Unable to identify and manage the scope of IT\IT related costs 0.736 3

Limited company resources and resistance to technology

related changes

0.733

4

The need to show quick financial returns with little risk 0,723 5

Lack of strategic vision in long term 0.720 6

Inability to account for the “full” business benefits 0.714 7

Inability to select an appropriate IT appraisal technique 0.711 8

Unable to identify financial benefits 0.704 9

Reluctance of employees to adapt to new technology 0.641 10

ITjbi – justification benchmark index Source: primary data

Table 4.10 shows the extent of the problems encountered during the justification

process for IT implementation. “Limited managerial and technical knowledge,” “A

multiplicity of justification and implementation paths” and “Unable to identify and

manage the scope of IT/IT related costs” were among the most common problems and

thus were ranked 1, 2, and 3 respectively. However the least rank problems namely;

“Unable to identify financial benefits” and “Reluctance of employees to adapt to new

technology” which ranked 9 and 10 respectively indicate that most of the

organizations agreed that they would record substantial financial benefits as a result of

41

IT implementation for enhanced business process and are flexible in the case of

emergence of new technology.

4.1.13 Organization Motivation for Implement IT

Table 4.11: Benchmark metrics for motivation to implement IT.

Motivation Factors ITmbi Rank

Improve service quality 0.815 1

Improve the performance (ie. effectiveness) of business processes 0.787 2

Improve profitability 0.787 2

Improve the organization competitive advantage 0.780 4

Improve productivity (ie cost efficiency) of business process 0.777 5

Pressure from rivals who are implementing IT 0.746 6

Support the strategic direction of the organization 0.723 7

Improve market share 0.695 8

Seemed like the thing to do at the time 0.679 9

ITmbi – motivation benchmark index Source: primary data

Table 4.11 shows the ranking of the benchmark metrics of motivation factors to IT

implementation for an enhanced business process. “Improved service quality,”

“improved the performance (ie effectiveness) of business process” and “improved

profitability” are the major motivators and thus ranked 1, 2, and 3 respectively.

“Improved service quality” which ranked highest indicates that the respondents

indentified it as a major motivation for adopting ICT for enhanced business process in

construction organizations. Also, the least ranked items; “Improve market share” and

42

“Seemed like the thing to do at the time” shows that the construction organizations are

genuinely motivated to adopt ICT and not just because they think that it is in vogue.

4.1.14 Organization strategic benefits of IT implementation.

Table 4.12: Benchmark metrics for strategic benefits

Strategic Benefits ITsbi Rank

Enhanced competitive advantage 0.752 1

Improved customer/ supplier satisfaction 0.746 2

Improved organizational and process flexibility 0.717 3

Improved growth and success 0.704 4

Reduced marketing costs 0.692 5

Leader in new technology 0.692 6

Improve customer/ supplier relations 0.660 7

Market leadership 0.657 8

Improved market share 0.609 9

ITsbi – strategic benchmark index Source: primary data

Table 4.12 itemizes the strategic benefits of IT implementation and their

corresponding ranks. “Enhanced competitive advantage,” “improved customer/

supplier satisfaction” and “improved organization and process flexibility” were the

major strategic benefits for the respondents‟ organization and thus were ranked 1, 2

and 3 respectively. “Enhanced competitive advantage” which ranked highest shows

that most of the organizations realized that organization that implement ICT exhibits

some level of competitive edge over those that are yet to implement ICT. “Improved

customer/supplier satisfaction” which ranked a close second indicates that

organizations that implements ICT are more able to satisfy the ever increasing needs

43

of clients. However the least ranked items; “Market leadership” and “Improved

market share” indicate that organizations that adopt ICT do not automatically become

market leaders, skills are still required to harness the benefits of ICT.

4.1.15 Organization Tactical Benefits of IT Implementation.

Table 4.13: Benchmark Metrics for Tactical Benefits.

Tactical Benefits ITtbi Rank

Improved service quality 0.803 1

Improved contract administration 0.796 2

Improve teamwork 0.780 3

Improved response to changes 0.765 4

Improved integration with other business functions

(e.g. Estimating and on-site operations)

0.733

5

Reduced time to prepare cost plans 0.714 6

Reduced time to compile tenders 0.695 7

Promotes pro-active culture 0.688 8

Increased planning times 0.644 9

ITtbi – tactical benchmark index Source: primary data

Table 4.13 itemizes the tactical benefits of IT implementation and their corresponding

ranks. “Improved service quality,” “Improved contract administration” and

“Improved teamwork” were the major tactical benefits for the respondent‟s

organization and thus ranked 1, 2 and 3 respectively. This is an indication that most

organizations record marked increase in construction quality as a result of ICT

adoption. However the least ranked item “Increased planning times” was well placed

because organizations should record a reduction in planning times as a result of ICT

adoption.

44

4.1.16 Organization Operational Benefit of IT Implementation

Table 4.14: Benchmark Metrics for Operational Benefits

Operational Benefits ITobi Rank

Improved data management 0.831 1

Improved communication 0.819 2

Improved ability to exchange data 0.787 3

Improved decision making 0.746 4

Improved quality of output 0.742 5

Reduced paperwork 0.704 6

Improved control of cash-flow 0.647 7

Reduced lead times to financial reporting 0.641 8

Improved forecasting and control 0.638 9

Improved response time to queries (e.g. Request for

information)

0.609

10

Reduced rework 0.587 11

Reduced labour cost 0.587 11

ITobi – Operational benchmark index Source: primary data

In table 4.14 above, items such “improved data management,” “improved

communication” and “improved ability to exchange data” are the major operational

benefits of IT implementation for the respondents organizations which ranked 1, 2 and

3 respectively. This is an indication that the top ranked operational benefits are

essentially communication-centric support service that does not require much tacit

knowledge in business processing. This agreed with the views of Ugwu (2010). The

result generally shows that there is increased flexibility in management and transfer of

information as a result of ICT implementation.

45

4.1.17 Direct Cost of IT Implementation

Table 4.15: Benchmark for Direct Cost

Direct Costs ITdci Rank

Hardware accessories 0.749 1

Overheads (e. g. Running costs and consumables) 0.749 1

Increase in processing power 0.739 3

Maintenance cost 0.733 4

Consultancy support 0.707 5

Installation Engineers 0.701 6

Training cost 0.688 7

Networking security (e.g. firewalls) 0.666 8

Networking hardware and software 0.657 9

ITdci – Direct cost index Source: primary data

Table 4.15 itemizes the direct cost of IT implementation and their corresponding ranks

“Hardware accessories,” “Overheads,” “Increase in processing cost” and

“Maintenance cost” were the major direct cost items and thus, ranked 1, 2, 3 and 4

respectively. “Hardware accessories” which ranked highest indicates the high cost of

ICT infrastructure support system. Also, “Overheads” which ranked a close second

indicate a high operating cost which is one of the major hindrances to ICT

implementation due to such problems as lack of power supply which is a serious issue

in Nigeria.

46

4.1.18 Indirect Cost of IT Implementation

Table 4.16: Benchmark for Indirect Cost

Indirect Cost ITidi Rank

Employee training 0.739 1

Management time 0.730 2

Cost of ownership (e.g. system support, troubleshooting

cost)

0.720

3

Management and staff resources (e.g. Integrating

computerize administration and control into work

practices)

0.707

4

Management effort and dedication to exploring the

potential of the system

0.701

5

Employee motivation (eg. Maintaining employees interest

in computer aided tasks)

0.692

6

Employee time in detailing, amending and approving the

computerization

0.682

7

Changes in salaries as a result of improved employee

flexibility.

0.657 8

Strains on resources 0.644 9

Organizational restructuring 0.634 10

Staff turnover (e.g. Increases in interview costs and

training costs)

0.631

11

Productivity losses 0.596 12

ITidi – Indirect cost index Source: primary data

Table 4.16 itemizes the indirect cost of IT implementation and their corresponding

ranks. “Employee training,” “management time” and “cost of ownership” were the

major indirect cost items with ranks 1, 2, and 3 respectively. “Employee training”

which ranked highest is a confirmation of the organizations response to most serious

issues concerning organization‟s approach to implementing IT of which issues

regarding training and retraining of IT staff is one of them. However, issues of “staff

turnover” and “productivity losses” ranked the least among the indirect cost issues

with 11 and 12 respectively.

47

4.1.19 Risks Associated With IT Implementation

Table 4.17: Benchmark for Risk Factors

Risk Factors ITrbi Rank

Capital outlay with no guarantee of likely returns. 0.698 1

Uncertainty about how to measure potential benefits 0.695 2

Lack of information systems infrastructure support for

the IT investment

0.592

3

Maintenance cost 0.673 4

Uncertainty about how to measure the costs involved 0.669 5

Minimal IT expertise 0.660 6

Security issues 0.660 7

Theft of software and hardware 0.647 8

Reluctance of employees to adapt to change 0.09 9

Training expenses on staff that leave the organization 0.606 10

Technical uncertainty and lack of knowledge 0.593 11

ITrbi – Risk benchmark index Source: primary data

Table 4.17 Shows that “capital outlay with no guarantee of likely returns,”

“uncertainty about how to measure potential benefits” and “lack of information

system infrastructure support for the IT investment” were the major risk factors

associated with IT use and implementation. Among the least ranked risk factors for

the organizations is “Theft of software and hardware” which shows that theft of ICT

infrastructure is mild. “Reluctance of employees to adapt to change” which ranked 9th

, shows that the employees are not really reluctant to change but are rather optimistic

to the changes brought about by ICT implementation. “Training expenses on staff that

48

leave the organization” which ranked 10th

, shows that staff are not in the habit of

leaving their organizations after receiving training from them. This should help to

internalize the acquired knowledge.

4.1.20 Organization IT investment Evaluation Techniques.

Table 4.18: IT Evaluation Techniques

Evaluation Techniques ITetbi Rank

Return on investment (RO1) 0.904 1

Net present value (NPV) 0.847 2

Discounted cash flow and internal rate of return 0.844 3

Payback period 0.758 4

Profitability index 0.679 5

Present worth 0.666 6

Employee training 0.638 7

ITetbi – Evaluation benchmark index

Table 4.18 itemizes the IT evaluation techniques employed by the respondent‟s

organization with their corresponding ranks. “Return on investment (ROI),” “Net

present value (NPV)” and “Discounted cash flow and internal rate of return” were the

major evaluation techniques and thus ranked 1, 2 and 3 respectively. Employee

training which ranked 7th

was not a preferred evaluation technique for the most of the

construction organizations.

49

4.1.21 Organization IT Evaluation Process

Table 4.19: Benchmark Metrics for Evaluation Process.

Evaluation Process ITepbi Rank

Prepare a benefits delivery plan before approval 0.752 1

Plan organizational changes associated with the implementation

of IT during system design

0.730

2

Prepare a benefit delivery plan during the Implementation of IT 0.726 3

Prepare a benefits delivery plan during system design 0.711 4

Plan organizational changes associated with the implementation

of IT before approval.

0.701

5

Conduct reviews during the implementation of IT 0.688 6

Use it to develop future process 0.685 7

Plan organizational changes associated with the implementation

of IT during implementation

0.685

8

Plan organizational changes associated with the implementation

of IT once the technology is implemented

0.676

9

Prepare a benefits delivery plan once the technology is

implemented

0.676

10

Conduct post – implementation reviews 0.673 11

Uncertainty about how to measure the costs involved 0.644 12

ITepbi – Evaluation process benchmark index.

Table 4.19 shows that the following evaluation process items, “Prepare a benefit

delivery plan before approval,” “Plan organization changes associated with the

implementation of IT during system design,” and “Prepare a benefits delivery plan

during the implementation of IT” were among the most common with ranks, 1, 2 and

3 respectively

50

4.2 DISCUSSION OF FINDINGS

Compared with the conventional usage of IT such as design and programming

software, the application of advanced IT tools such as “web based project

management,” “3D design visualization,” “E-tendering” and “Geographical

information system (GIS)” have not yet had a good penetration into the

Nigerian construction industry. This finding is in line with the contribution of

Oyediran (2005) which stressed that the construction industry has been

sluggish in adoption of ICT despite the amenability of its process to IT

operation. Also, Oladapo (2007) stated that in Nigeria, the use of computers is

still at the rudimentary stage where a basic application like word processing is

the most prominent, while the other countries have advanced to the stage of

application to more technical business functions.

The foremost problems encountered during the justification process for IT

implementation are “limited managerial and technical knowledge” and “ A

multiplicity of justification and implementation paths”. However the

organizations indicated that they would record substantial financial benefits as

a result of IT implementation and are flexible in the case of adapting to new

technology.

The major motivations for the implementation of IT by the construction

organizations are “improve services quality,” “improve the performance of

business process” and improve profitability.” This is an indication that the

construction organizations are genuinely motivated to ICT and not just because

they think it is in vogue.

51

The core strategic benefits of IT implementation are “Enhanced competitive

advantage,” “improved customer/supplier satisfaction” and “improved

organizational and process flexibility.” The respondent‟s organizations

affirmed that organizations that implement ICT are more competitive than

those that are yet to implement ICT. There is also the tendency to satisfy client

needs as a result of ICT implementation. However, organizations that adopt

ICT do not automatically become the market leader as skills are still required to

harness the full benefits of ICT.

The core tactical benefits of IT implementation as indicated by the

respondent‟s organization are “improved service quality,” “improved contract

administration,” and “improved teamwork.” Most of the organizations record

marked increase in construction quality as a result of ICT adoption. Also,

organizations should record a reduction in planning times as a result of ICT

implementation.

The core operational benefits of IT implementation as indicated by the

respondent‟s organization are “improved data management,” “improved

communication” and “improve ability to exchange data.” The top ranked

operational benefits are essentially communication-centric support service that

does not require much tacit knowledge in business processing. This is in line

with Ugwu (2010)

The major direct cost implications of IT implementation are “hardware

accessories,” “overhead” and “increase in processing power.” High cost of ICT

infrastructure support system is a major issue as regards direct cost implication

52

of ICT adoption. Operating cost such as cost of power supply is one of the

major hindrances to ICT adoption in Nigerian construction industry.

The major indirect cost implications of IT implementation are “Employee

training,” “management time” and “cost of ownership.” Cost training and

retraining of IT staff is among the most serious issues concerning

organization‟s approach to implementing IT.

The major risks factors associated with IT implementation as indicated by the

respondent organizations are “capital outlay with no guarantee of likely

returns,” “uncertainty about how to measure potential benefits” and “lack of

information system infrastructure support for the IT investment.” However,

theft of ICT infrastructure is mild and employees are not really reluctant to

adapt to changes brought about as a result of ICT implementation. Also

employees are not in the habit of leaving their organizations after receiving

quality training from them. This encourages continuity and internalization of

acquired knowledge.

The most common IT investment evaluation techniques as indicated by the

respondent organizations are “Return on investment (ROI),” “Net present value

(NPV)”, “Discounted cash flow and internal rate of return.” However,

“Employee training” was not a preferred evaluation technique for most of the

construction organization.

The major organization‟s IT evaluation process are “prepare a benefits delivery

plan before approval,” “plan organizational changes associated with the

implementation of IT during system design” and “prepare a benefits delivery

plan during the implementation of IT.”

53

The benefits derived from implementing IT for enhanced business process

justifies its investment.

The adoption and implementation of ICT by the Nigerian construction industry is

being hindered by high cost of ICT infrastructure support system and high operating

cost mainly due to lack of power supply which is a serious issue in Nigeria This is in

line with (AFDB/OECD, 2004) which stressed that inadequate and erratic power

supply is way ahead of the list of obstacles as electricity supply in Nigeria has been

unreliable, leading to high production cost for companies, which are forced to procure

and run their own power generating facilities.

The study also indicated that organization record marked increase in

construction quality and a reduction in planning times as a result of ICT adoption.

These perceived benefits arguably translates into greater efficiency and seem to

support Toole‟s (2003) view that ICT is one of the most powerful process innovation

for increasing operational efficiency. However, this does not automatically mean that

these benefits have been very well achieved, but it highlights the need for the

necessary ICT infrastructure that would facilitate achieving such benefits in

construction organizations. Cases of theft of hardware and software are mild in the

Nigerian construction industry and employees are not reluctant to change but are

rather optimistic to changes brought about as a result of ICT implementation. Also

from Table 4.18, the findings show that employees are not in the habit of leaving their

organizations after receiving quality ICT training from them, which will encourage

continuity and also internalize the knowledge acquired.

54

CHAPTER FIVE

SUMMARY, CONCLUSIONS AND RECOMMENDATIONS

5.1 SUMMARY

This research work studied the level of use and adoption of ICT in the Nigerian

construction industry and also determined the prospects with respect to the benefits,

costs, and risks in the areas of research and development. It covered a review of ICT

adoptions and applications by some construction companies in Nigeria.

A comprehensive questionnaire was designed and administered to the

respondents for data collection and analysis. The questionnaire instrument was already

validated and used for other related international studies in Hong Kong and Auatralia

(Ugwu et al 2006,2007). In analyzing the data collected, distinctive statistical tools

such as simple percentages, charts and tables were used. The analysis also used a

simple statistical analysis in which the rankings of the benchmark indices of various

issues were compared. A statistical test of difference of means called the t-test was

also used in testing the hypothesis at a chosen level of significance.

The study shows that Information Communication Technology (ICT) has not

yet had a good penetration in the Nigerian construction industry. Compared with the

conventional IT usage such as design and programming software, the advanced ICT

applications such as “web based project management,” “3D design visualization,” “e-

tendering and “Geographical information systems” are not common in the local

construction industry.

The interviewees attributed this to several factors such as the fact that benefits

they bring to a company are difficult to quantify, cost of hardware and software,

55

operating cost, issues regarding training and retraining etc. The responses elicited

were also used to generate ranking of various items on issues of benefits, cost, risks

and others. However, the interviewees indicated that the benefits derived as a result of

IT adoption is sufficient to justify its investment.

Among the organization‟s justification process for implementing ICT, “limited

managerial and technical knowledge” and “A multiplicity of justification paths” were

ranked highest by the respondents. As a result, the organizations were optimistic that

they would record substantial benefits from implementing ICT.

A key motivator for implementing ICT was “improved service quality” and

was ranked first by the respondents. “improved performance ( i.e effectiveness) of

business process” was ranked second by the respondents.

Among the most common strategic benefits of implementing ICT is “enhanced

competitive advantage” which was ranked first by the organizations. “improved

customer/supplier satisfaction” was ranked a close second by the respondents. At the

tactical level, the most common benefits was “improved service quality” which ranked

first, “improved contract administration” and “improved teamwork” were ranked

second and third respectively. At the operational level, the study shows that the

organizations considered “improved data management” as a significant benefit they

have achieved to a large extent and thus, ranked it first. “improved communication”

and “improved ability to exchange data” were ranked second and third respectively.

The comparison of benchmark metrics for the direct cost of implementing ICT

show that “hardware accessories” and “overheads” were considered by the

respondents to be the most significant issues to a large extent and were both ranked

56

first by the respondents. “increase in processing power” was ranked a close second.

The rankings of the various issues of indirect cost implications of ICT adoption shows

that “employee training” was ranked first by the respondents. “management time” and

“cost of ownership” were ranked second and third respectively.

A comparison of risk factors associated with ICT implementation show that

“capital outlay with no guarantee of likely returns” was the most significant risk and

was ranked first by the organizations. “uncertainty about how to measure the potential

benefits” was ranked a close second, “lack of information system infrastructure

support for the IT investment” was ranked third.

The ICT evaluation technique mostly employed by the respondent

organizations to a large extent was “return on investment (ROI)” which was ranked

first. “net present value (NPV)” and “discounted cash flow and internal rate of return”

were ranked second and third respectively.

Among various issues regarding organizations‟ ICT evaluation process,

“prepare a benefits delivery plan before approval” was the most significant from the

study and was ranked first by the respondents. “plan organizational changes associated

with the implementation of IT during system design” and “prepare a benefit delivery

plan during the implementation of IT” were ranked second and third respectively.

The result of the t-test carried out on the null hypothesis that “the benefits

derived from adopting IT does not justify its investment” favoured the opposite. It can

therefore, be stated that the benefits derived from implementing ICT for enhanced

construction quality, cost efficiency and competitiveness justifies it‟s investment

decision.

57

The research based on a case study project discussed a wide range of

enablers and barriers to ICT application in the construction sector. Analyses of recent

applications provide basic experimental foundations and theoretical underpinning to

understand challenges that face ICT development and diffusion in emerging

economies. Like most other sectors, successful, uptake and diffusion of ICT systems

is predicated on a set of critical factors. Some of these factors may depend on specific

organization attributes (e.g. size). The study identified some fundamental critical

success factors that would act as enabler for successful implementation of ICT

projects in construction.

5.2 CONCLUSION

This study concludes that the Nigerian construction industry players have not

appreciated the uptake and utilization of ICT to global competitive thresholds. This

delay in uptake is limiting advances in construction quality, cost efficiencies and

competitiveness of local construction firms. The industry must become more flexible

in its business conduct and encourage ICT uptake and utilization. However most of

the organizations were optimistic that they would record significant benefits from

implementing ICT. The future prospects of ICT implementation by the Nigerian

construction industry is encouraging as most construction organizations are genuinely

motivated to adopt ICT.

According to the survey, the organization affirmed that implementing ICT

gives a competitive edge over those that are yet to implement it. Organizations will be

58

more able to satisfy client needs as a result of ICT adoption, however, skills are

needed to harness the full benefit of ICT.

The adoption and implementation of ICT by the Nigerian construction industry

is being hindered by high cost of ICT infrastructure support system and high operating

cost mainly due to lack of power supply which is a serious issue in Nigeria.There is

also the issue of cost of training and retraining of IT staff which is one of the most

serious issues concerning organization approach to implementing ICT.

It is expected that these results will guide policy makers in Nigeria to identify

where to concentrate their efforts to promote increased use of ICT, especially in the

construction industry. Also, for the construction in a developing country such as

Nigeria to maximize the returns on investment in ICT, it must go beyond basic

application like design and programming software to more technical business

allocations like, e-business, electronic data management, e-tendering, web base

project management, and other advanced ICT applications.

It is also hoped that this study will be repeated in the next few years to measure

any quantitative and qualitative improvements in ICT diffusion in the Nigerian

construction industry.

5.3 RECOMMENDATIONS

In a quest to increase uptake and utilization of ICTs in the Nigerian

construction sector, this study is proposing the following interventions:

Introduce rigorous sectoral ICT skills training, networking and advocacy for

involvement of industry stakeholders.

59

Engage in more regional collaboration for information exchange on

competitive bidding processes and sustainable local contractor development

programs.

Lobby for increase in Government funding for training due to the absence of

legal framework for skills development fund and perceived donor fatigue in

capacity building support.

Improve industry – schools links (e.g. construction clubs).

Increase opportunities for more private trainers to participate in ICT training

and credentialing.

Improving the attractiveness of the industry through rigorous advocacy for

construction sector Research and Development (R & Ds).

It is expected that Research and Development (R & D) will continue to drive progress

in several aspects. Examples of areas that R & D should address in the short and

medium terms are:

1. Education (teaching and learning)

2. Interoperability and systems integration

3. User requirement capture

4. Application of complexity and chaos theories as an underpinning framework to

investigate the socio-technical dimension of ICT implementation

5. Adoption and diffusion in construction organizations

6. Standardization e.g. using eXtensible Markup Language (XML) solutions.

As a general recommendation, there is need for further research on this subject to

elicit more evidence from a larger sample.

60

Finally, in line with attaining the national vision of becoming one of the twenty

largest economics in the world by the year 2020, a viable construction sector which

utilizes ICTs to global competitive threshold is an imperative. If the construction

companies in Nigeria must hold to theirs as regards construction and also be

competitive in bidding for international construction contracts, the ICT paradigm is

inevitable.

61

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66

APPENDIX A

STUDENT’S T-TEST TABLE

Degrees of Freedom Probability, P

0.1 0.05 0.01 0.001

1 6.31 12.71 63.66 636.62

2 2.92 4.30 9.93 31.60

3 2.35 3.18 5.84 12.92

4 2.13 2.78 4.60 8.61

5 2.02 2.57 4.03 6.87

6 1.94 2.45 3.71 5.96

7 1.89 2,37 3.50 5.41

8 1.86 2.31 3.36 5.04

9 1.83 2.26 3.25 4.78

10 1.81 2.23 3.17 4.59

11 1.80 2.20 3.11 4.44

12 1.78 2.18 3.06 4.32

13 1.77 2.16 3.01 4.22

14 1.76 2.14 2.98 4.14

15 1.75 2.13 2.95 4.07

16 1.75 2.12 2.92 4.02

17 1.74 2.11 2.90 3.97

18 1.73 2.10 2.88 3.92

19 1.73 2.09 2.86 3.88

20 1.72 2.09 2.85 3.85

21 1.72 2.08 2.83 3.82

22 1.72 2.07 2.82 3.79

23 1.71 2.07 2.82 3.77

24 1.71 2.06 2.80 3.75

25 1.71 2.06 2.79 3.73

26 1.71 2.06 2.78 3.71

27 1.70 2.05 2.77 3.69

28 1.70 2.05 2.76 3.67

29 1.70 2.05 2.76 3.66

30 1.70 2.04 2.75 3.65

40 1.68 2.02 2.70 3.55

60 1.67 2.00 2.66 3.46

120 1.66 1.98 2.62 3.37

Infinity 1.65 1.96 2.58 3.29

Source: http:wikipedia.org/wiki/student‟s_t-test