How to Build A Research Program Out of Nothing University of Botswana Experience

Performance Based Studies Research Group International Council for Research and Innovations in Building and Construction (CIB) www.pbsrg.com www pbsrg com
PBSRG
GLOBAL

March 2009

Major Points
Credentials (Do as I say) University of Botswana experience Career Researchers vs. Academic Researchers Unique Constraints at each University IMT/PIPS/PIRMS/I d t Structure IMT/PIPS/PIRMS/Industry St t How to Implement

Worldwide leader in Best-Value

Procurement, Project Management, Supply Chain Delivery, Organizational Optimization

Testing since 1994, $7.4M Research 175 Publications 636 Procurements of $2 16B services $2.16B 50+ Different clients (public & private) 98% Performance Vendors increase profits by up to 5% Minimized PM/RM/QS functions by up to 90% PMI, NIGP, IFMA, IPMA, ASHE Tests in Botswana/Africa and Netherlands ($1.5BEuros) ASU investments of $100M due to PIPS Licensed technology to ASU (9)
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July/Aug/Oct 08 Editorial Board

W117 Using Performance Information in Construction

New American University Model

Self Funded and Dominant Impact
Privately funded, not dependent on state funds Impact of Technology at ASU and other locations ASU ($100M+)

No N DEWSC seed money d No IAFSE seed money No university seed money KSM (private company started to support PBSRG) 15 years, $7.4M 2008, $1M Staff from 1 to 23 Ensured through commitment of staff on soft funding for one year strategic work and leveraging ($700K)

Research effort

Food services, $32M investment Sports Marketing, increase of $50M over 10 years Network IT: $10M/five years, $20M/ten years Furniture procurement Copy Machine/document control Recreational Center aerobic equipment

Staff includes industry, academics, graduate students, undergraduate students

USAF project delivery US Army Medical Command University of Minnesota State of Oklahoma Facility Management industry PBSRG will be training for professors/PhD students

Staff

(growth from 1 person to 26, 1994-2009)

Industry Board of

Leadership (3)

Directors (6) William Badger, Rick Corea, IFMA Executive Director outgoing president Dean Kashiwagi, Tom Kuhla, PMI Kuhla Director Di t representative Kenneth Sullivan, FMRI Nick Dabula Central Director (tenure and AZ ASHE promotion this year) Curtis Slife, FM William Verdini, Solutions Director, Supply Chain Management General Department, Carey Dynamics/FMRI School of Business Researchers (3) R h

Research Assistants (4)

Neha Malhotra 2 PhD candidates

Internet/Webpage Staff (3)

Jake Smithwick Derrick Brennan Matt Charters

Student Workers (9)

Program Managers (4)

John Savicky Sylvia Romero Jacob Kashiwagi Business Slot

John Michael (PhD) Brad Carey (PhD) Marie Sullivan

Anthony Perrenoud Brian Laspisa Duval Gajjar Julia Cheng Megan Bentley Ryan Mays Ryan Ramos Sid Joshi

PBSRG is headquarters of International CIB W117 Partners and Journal

5 years 15 tests for infrastructure, $1.5B Euros Two major GCs

Tongji University

Fulbright Scholar University of Botswana PIPS tests

RMIT PBSRG platform

Over 90 participants in 23 different countries

6
6

Strategic Plan for PBSRG

Merge efforts with WP Carey School of Business, home of ISM (undergrad concentration) Become a major advisor/component to ASU procurement, and ASU services and departments (line slot provided by Business Services) p ( p y ) Combined with CIB W117 Performance Measurement in Construction and Journal for the Advancement of Performance Information and Value Increase number of sponsored projects and research Publications: 25/year (conference/journals) in best value PIPS/PIRMS technology (coauthor with partners) Worldwide center of excellence which other professors and PhD students come to learn; creator of W117/PBSRG Cell platforms; PhD efforts (inhouse and with partners); annual conference Graduate/undergraduate FM/PM education Integrate with IFMA and PMI (Local facility management and project management industry) Mentor young guns

Research Based Graduate Programs University of Botswana

Dean Kashiwagi PhD PE Fulbright Professor Kashiwagi, PhD, PE,
Director Performance Based Studies Research Group (PBSRG) Del E Webb School of Construction Arizona State University P.O. Box 870204 Tempe, AZ 85287-0204 USA

W117 P f Performance M Measurement in Construction ti C t ti International Council for Research and Innovations in Building and Construction (CIB) Editor CIB Journal for the Advancement of Performance Information and Value April 21, 2009

www.pbsrg.com

MPM 655 Experiment

Transform course to research based course Changes the environment Changes the way they do work Students used to education based course Become smarter by knowing more knowledge Memorize what instructor presents

MPM 655
Two multiple choice exams (160 questions) were given during the semester. Questions were conceptual (deductive logic) in nature with each question having up nature, to 10 potential answers (cannot memorize the answers.) The exact same exams were given as a part of the final exam. An industry questionnaire on industry practices, structure, and logic was given twice, at the beginning of the class twice and at the end. The students are also asked to rate the class (1-10) on some of the features that make the class a research based class.

MPM 655 Results

Did not pass with a 60% mark after the second time of getting the same exam: 9 (33%) Did more poorly the second time on the same exam: 2 (7%) Failed to increase by at least 10% on the second exam: 8 (30%) Did more poorly on the second industry questionnaire: 3 (11%) Total of students in the above four categories: 16 (60%)

Test Results (continued)

The second exam average mark compared to the ASU class mark: UB: 64 ASU: 77 differential: 13 points (20% lower than ASU score) The average increase in percentage compared with the ASU mark: UB: 16% ASU: 15% (1.3% higher differential for UB) The average score on the industry concepts when compared to industry professionals in the US who were exposed to the concepts for a conference presentation: UB: 6 95 US: 6 88 6.95 6.88 The average rating of performance on the class (1-10, 10 being a good mark): 9.08 (4.54 on a 1 -5 rating scale) FS average mark over 15 years: 4.65

Degree of Difficulty in the Class

The class is more difficult than usual: average 5.05, 5 05 standard deviation 3 5 3.5 Difficult to adjust to efficient and effective thinking due to normal methodology of very long and complete answers: average 6.23, standard deviation 3.4 Students in the class took half the class to just get adjusted to the different way of thinking: average 6.55, standard deviation 3.0

The Research Performance of the Course: Very High

The number of students who are attempting to apply the concepts in their organizations: 5 students 19% of students, class, expectation 10% The number of faculty who aligned well to the research based format: 3 out of 5 PM section faculty: 60%, expectation 50% The Th number of research t t 4 (15%) expectation b f h tests: (15%), t ti was 10% The number of students requesting thesis topics on the new technology: 8 (30%), expectation: 10%

Industry Structure
High

III. Negotiated-Bid Owner selects vendor Negotiates with vendor Vendor performs

Performance

IV. Unstable Market

II. Value Based Best Value (Performance and price measurements) p ) Contractor creates baseline plan Contractor justifies and measures deviations Contractor is technical expert I. Price Based Specifications, standards and qualification based Management, direction, control & inspection by clients professional Clients professional is technical expert

Low

Competition

High

Graduate Education Structure

High

III. Research Based/Education Based Combination Faculty and graduate students partner Shared responsibility Combination of research based and education based IV. Unstable Program

Performance

II. Research Based Students are p resource/technical experts Faculty become researchers with research methodology Students hypothesis becomes foundation of education Impact and change of industry I. Education Based Syllabus/textbook based education (existing practices) Faculty are technical experts F lt t h i l t Minimum standards Faculty manage, direct, control, and inspect Studentsare reactive

Low

Competition

High

Priced Based or Educational Based Graduate Program Environment

Do more work Everyone is reactive Everyone h their head down E has th i h d d Everyone is tired Everyone is just trying to survive No one has the vision or the juice to put together a magnificent effort

Reference: Story of the Crashed jetliner in the Florida Everglades

Event

Initial conditions (1)

Final conditions (1) Laws Time

Laws

Education Based Graduate Student Event

Graduate student without degree

Education based courses (reactive, non-integrated)

Work environment

Smarter graduate student with degree

Work environment

Creative Thesis work

Research Based Graduate Student Event

Theoretical models Industry practices Previous Research results Alignment of student and hypothesis h h i

Research based thesis

Graduate student without degree Research based courses (courses support proactive student with a plan) Work environment

Changed graduate student

Improved work environment

Creative Thesis work

10

Course Breakdown
I: Deductive Logic

Information Measurement Theory (IMT) Dominant information Industry Structure Leadership vs. Management Performance Based Information Procurement System (PIPS)
II: Industry practices/existing systems

II
Technology

III
III: Research tests

IV

Surveys Tests
IV: Documentation/publications

Peer reviewed conference papers/journal papers

Impact on Instructors
Instructors preparation reduced by 50% per course If teaching two courses, preparation reduced by 75% Students learn how to do test before research methods course and thesis St d t concentrate on Students t t solving workplace problems Courses are integrated by deductive logic

I Deductive LogicI II Risk Management III II Procurement III

Assessment II Monitoring Evaluation

III

IV

IV

IV

11

Research Based Graduate Student Event Requires Strategic Plan for Program
Theoretical models Industry practices Previous Research results Alignment of student and hypothesis h h i Research based thesis

Graduate student without degree Research based courses (courses support proactive student with a plan) Work environment

Changed graduate student

Improved work environment

Creative Thesis work

Research Based Graduate Program

Theoretical models Industry practices Previous Research results Alignment of student and hypothesis Research based thesis

Graduate student without degree Research based courses (courses support proactive student with a plan) Work environment

Changed graduate student

Improved work environment

Creative Thesis work

Theoretical models Industry practices Previous Research results Alignment of student and hypothesis

Research based thesis

Graduate student without degree Research based courses (courses support proactive student with a plan) Work environment

Changed graduate student

Improved work environment

Creative Thesis work

Theoretical models Industry practices Previous Research results Alignment of student and hypothesis

Research based thesis

Graduate student without degree Research based courses (courses support proactive student with a plan) Work environment

Changed graduate student

Improved work environment

Graduate Program has strategic plan

Creative Thesis work

12

Thesis / Dissertation Objective

Students must see path from beginning to end If they cant see, f th t faculty must step i and fill i th bli d spots (experts) lt t t in d in the blind t ( t ) Students bring organizations into the graduate program Objective: graduate students graduating, increased publications, research funding from organizations, impact on industry

Dominant Results of Mentored Faculty

4 months in 2008/2009 Refereed Publications (21/5) Research tests: 7 Transformed classes: 4 Grants: 2, $25K Industry presentations: 9 Research partners: Bank of Botswana, UB IT dept., U.S. Embassy Masters graduate study thesis outline: 16 Last three years 0 0 0 0, $0 0 0

6/90 graduated

13

Follow on efforts
MOU with ASU and UB Appoint Professor Kashiwagi as visiting professor Mentor two lecturers to PhD dissertation in 2.5 years Continue 25 publications a year B Become CIB W117 platform; M as young gun l tf Mex Bring grants in totalling $50K in one year Transform program into research based program

Academic vs. Career Researcher

Performance Based Studies Research Group International Council for Research and Innovations in Building and Construction (CIB) www.pbsrg.com www pbsrg com
PBSRG
GLOBAL

March 2009

14

Academic vs. Career Researcher

(Price based vs. best value)

Peer review vs. dominant results Practice vs deductive logic Funding source: large government grants vs industry need grants Isolation vs industry integration/impact Relationship based vs. dominant

Dominant Research Results

Minimize client management activity up to 90% Increase vendor profit by up to 100% Minimize cost and risk to LT 2% Increase performance/value by 30%

15

Best Value Technology

(Evolution of optimization theory from construction procurement to organizational optimization) Best value is the alignment of resources that optimizes the output, and minimizes the need for management and bureaucracy The creation of the best value alignment is done through a structure that minimizes the need for expertise and management decision making The best value solution is a process run by a project manager who knows nothing about the operation The best value solution is one cloaked in simplicity a few measurements, simplicity, measurements that creates transparency and forces an increase in value and performance The technology shapes the research as PBSRG simultaneously does theoretical research, prototype testing, and implementation

Related Research Technology Areas

Performance Information Procurement System (PIPS) Supply chain management optimization Organizational optimization through measurement/logic Risk management New project management model New risk model Replaces need for data with dominant information Sustainable/Green System Value Performance Information Risk Management Model (PIRMS) Leadership vs. Management New Government Business Model/Outsourcing Model New Model for Delivery of Professional Services Information environment New contract model (risk management rather than legal document) Industry Structure Model

16

Current UTO Operational Model

Vendor Organization

University Organization

New Best Value Organization

(Over 20% more efficient/value)

Single vendor/university organization

Fully measured, vendor/ASU personnel, benchmarked, new organizational model

17

Arizona State University turning into a measured university

ASU has embraced and implemented the research internally ASU Research Leaders Business Services (Ray Jensen) Procurement (John Riley) Major Tests Dining Services - $1.3B, 16 yr contract largest in dining history Sports Marketing - $80M, 10 yr contract lower tier to Top 4 in US Student Recreational Center Equipment - $840k, 5 yr contract new outsourced model Student Recreational Center Services UTO IT Network $50M in process first of its kind Furniture late 2008 measured, value, meet expectations Roofing procurement Document control/copy service

IMT/KSM/Industry Structure/PIPS/PIRMS

Performance Based Studies Research Group International Council for Research and Innovations in Building and Construction (CIB) www.pbsrg.com www pbsrg com
PBSRG
GLOBAL

March 2009

18

LAWS

The Number of Laws of Physics

Past

Present

Future

100% Laws

100% Laws

100% Laws

Laws are not createdthey are discovered

Cycle of Learning
Perceive

Change

100% Information

Process

Apply

19

Learning Speeds

All Individuals Learn At Different Speeds Perceive

Change

100% Information

Process

Apply

Types of Individuals

100%

Perce eption of Information

Perceive

A B C
Time

100% Information

Apply

Process

Change

0%

20

Simplicity: Who perceives more information?

100%

Perce eption of Informat tion

C Time

0%

How to Create a KSM

Left Side (LS) (Type A) vs. Right Side (RS) (Type C)

100%

A
Infor rmation Level

LS

+
C

=
RS RS

0%

Time

21

Characteristics of Dean Environment of Time of Birth 3 years defines children

Children Year Production Overachieve Planning Visionary Influence Seek assistance Honesty to self Financial condition Use of outside resources Think of others Understanding Tolerance Confidence Hard work Fear outside factors Worry Control Do it the hard way Self A 1978 5 8 7 7 1 5 5 5 1 5 5 5 4 10 10 10 10 10 5 A 1980 5 8 7 7 1 5 5 5 1 5 5 5 4 10 10 10 10 10 5 M 1982 6 9 7 7 1 5 5 5 1 5 5 5 4 10 10 10 10 10 5 J 1984 7 9 7 7 1 5 6 5 1 5 5 5 4 10 9 10 10 10 5 E 1986 7 9 8 7 1 5 6 5 1 5 5 5 4 10 9 10 10 10 5 AB 1988 8 9 8 8 2 5 7 6 1 5 5 5 5 10 8 10 10 10 5 IS 1990 8 10 8 8 3 6 7 6 1 5 5 5 6 10 8 10 10 10 5 1992 9 10 8 8 3 7 8 6 1 5 5 6 8 10 7 10 10 10 5 Joe 1994 9 10 8 8 4 7 8 7 1 5 6 6 9 10 7 10 5 9 4 1996 9 10 9 9 5 8 8 7 2 7 7 6 9 10 6 10 4 8 3 1998 9 10 9 9 6 8 9 7 3 8 8 7 9 10 6 10 3 7 2 2000 9 10 9 9 7 9 10 7 4 9 9 8 9 10 5 10 2 6 1 2002 10 10 10 10 8 9 10 8 4 10 10 10 10 10 4 10 1 5 1 2004 10 10 10 10 9 9 10 9 5 10 10 10 10 10 1 5 1 4 1 2006 10 10 10 10 10 9 10 10 6 10 10 10 10 10 1 1 1 3 1

Information
LS
100% Information

A
Info ormation Level

All LS characteristics are related All RS characteristics are related

No Info ormation

Everyone has both LS and RS characteristics All characteristics are related (event happens only one way) and relative (relative degree)

0%

Time

22

100%

100%

Info ormation Level

0%

Info ormation Level

0%

Where is Control?

Where is Management?

Time

Time

C
Information

A
Information

LS

LS

No Info ormation

No Info ormation

No Control

No Control

RS

RS

Contro ol

Contr rol

Leadership

RS

Manag gement

23

Decision Making?
LS
100% Information

RS

RS

RS

Info ormation Level

No Decision Making

No Control

Leader

No Info ormation

0%

Time

Plot the Following Characteristics

LS LS LS LS RS RS RS RS RS RS RS RS RS Strategic Plan Schedule Prepared Technical Works alone Places blame Passes more information Influences Expectations Always around politics Aggressive Does not want to be educated

LS

RS

Decision Making

Manag ger

Contro ol

24

Leadership Characteristics
LS LS LS LS LS

Information

No control

Serving others

Non-technical

Knows others

No Informat tion

Plot the Following Characteristics

LS RS RS LS RS RS RS LS LS LS LS LS Leadership Expectations Short range Measurement of performance Worry Emotion/Passion Working harder (not necessarily smarter) Efficiency Continuous Improvement Freedom Range / Diversity Trial and error

LS

RS

Try to Contr rol

Technical

Self center red

Dont know others w

25

Industry Structure
High

III. Negotiated-Bid Owner selects vendor Negotiates with vendor Vendor performs

II. Value Based Best Value (Performance and price measurements) d i t ) Quality control

Performance

Contractor minimizes risk

IV. Unstable Market I. Price Based Specifications, standards and qualification based Management & Inspection

Client minimizes risk

Low

Competition

High

Problem with Priced Based Systems

Owners
The lowest possible quality that I want
High

Contractors
The highest possible value that you will get
High

Maximum Minimum
Low

Low

26

Inexperienced vs. Experienced

Me & Them Us

Risks

Risks

Control

Dont Control

Control

Dont Control

Impact of Minimum Standards

High

Low

High

Low

Contractor 1 Contractor 2 Contractor 3 Contractor 4

Low High Low

Contractor Contractor Contractor Contractor C t t

1 2 3 4
High

Decision making: what is the minimum standard, and do all contractors meet the minimum standards

27

Industry performance and capability

Vendor X
Highly Trained

Customers C t
Outsourcing Owner Partnering Owner Price Based

Medium Trained

Minimal Experience

Management and control vs. Alignment

2 1

28

Event

Initial conditions
D M&C

Final conditions Laws Time

Laws

Risk is deviation from expected measurements

Traditional Management
Initial conditions
D1 M&C

Final conditions Laws Time

D1: client makes decisions on budget, time, and expectations D2: designers make more decisions to make expectations true D3: contractors attempt to use the lowest possible price to minimize the risk caused by the decision making of client's and designers M&C: the client attempts to force contractor to make expectations happen

Laws

D2

D3

29

New PM and RM model that depends on efficiency

Initial conditions
D1 M3

Final conditions
M4

Laws Time

M1 M2

Laws

M1: Measured design options that accurately describe the initial conditions replaces D1 M2: The best value construction option that replaces the design M1 M3: WRR/RMP measures deviation M4: final performance measurement

30

Delivery of Services
Me & Them

Initial conditions

Final condition s Laws Time

Status Quo: High Risk

Ris ks

Laws

X
M
Control Dont Control

Control, manage, direct, and i di t d inspect t Increase the flow of information Inefficient, ineffective Maximizes technical issues

New PM Model: Low Risk

Initial conditions

M
Laws Time

Final condition diti s Laws

Us

Ri sk s

M M
Control Dont Control

Transfer control to the contractor Preplanning Quality Control Measure Minimize flow of information Minimizes technical issues

Best Value System Performance Information Procurement System (PIPS) PM model, Risk Management model
PHASE 2: PHASE 3:

PHASE 1:

SELECTION

PRE-PLANNING QUALITY CONTROL

MANAGEMENT BY RISK MINIMIZATION

Best Value also known as sealed competitive bid in State of Texas

31

Manage/control vs. Self monitoring

No measurements
Measure, measure, measure

Risks

Risks

Control

Dont Control

Control

Dont Control

Self Regulating Loop

(Six Sigma DMAIC Generated)
Actions Minimize data flow Minimize analysis Minimize control Requirements

(DBB, DB, CMAR, DBO)

R Risk Assessment

Past Performance Information

M

R Interview Key Personnel V

Identify value (PPI, RA, Interview, $$$$$) Preplanning, p g, Quality Control Plan

R 50%

V = Identify Value R = Minimize Risk M = Self Measurement M

50% M

Efficient Construction
M R

Measure again

32

Performance Information Procurement System (PIPS)

Filter 1 Filter 2 Past Proposal & Performance Risk / Value Information Plan
High

Filter 3 Interview

Filter 4 Prioritize (Identify Best Value)

Filter 5 Pre-Award Phase (Pre-Plan)

Filter 6 Weekly Report & Post-Rating

Qualit of Vendors ty

Low

Time

Differences with PIPS

Is not relationship based Contract is written by the vendor to include financials, baseline service, risk management system, performance measurements Vendor controls the delivery of service, and must manage and minimize the risk that vendor does not control Service must be compared with major universities to ensure high performance Vendor administers and documents the contract and contract deviations

Aw ward

33

Case Study: Government Agency

Director Director

Regional Director Procurement Officer 1

Regional Director Procurement Officer 2

Hospital 1 PM 1 Contractor 1 Contractor 2 Contractor 3 Contractor 4

Hospital 2 PM 2 Contractor 5 Contractor 6 Contractor 7 Contractor 8

Hospital 3 PM 3 Contractor 9 Contractor 10 Contractor 11 Contractor 12

Hospital 4 PM 4 Contractor 13 Contractor 14 Contractor 15 Contractor 16

RMP Comparison
PROJECT OVERVIEW % projects on time % projects on budget AVERAGE PROJECT % over Awarded Budget % over budget due to owner % over budget due to contractor % over budget due to unforeseen % Days Delayed % Delayed due to owner % Delayed due to contractor % Delayed due to unforeseen # of risks # owner generated risks Owner rating Risk number Without RMP 38% 52% Without RMP 5.4% 3.83% 0.21% 1.33% 30.6% 19.72% 4.64% 6.20% 1.98 1.33 9.10 3.25 With RMP 56% 70% With RMP 1.7% 1.13% 0.04% 0.53% 14.6% 11.41% 1.68% 1.47% 1.29 0.87 9.34 2.38 % Progress

48% 35%
% Progress

68% 71% 79% 61% 52% 42% 64% 76% 35% 35% 3% 27%

68

34

Quality Control and Quality Assurance

Complex definitions confuse the issues Quality Control (technical): Done by the vendor/provider/expert Requires baseline scope before work has commenced Separate the technical risk from the risk and concern that they cannot control before work has commenced Measures deviation from baseline in terms of cost, time, and expectation Quality Assurance (non-technical): Ensure that the vendor does a quality control or risk management plan (weekly risk report) and confirm the accurate of the plan

Modifications and Risks

35

United Excel Corporation Performance Line

Performance Numbers

Global Design & Construction Performance

36

How to Build A Research Program Out of Nothing

Performance Based Studies Research Group International Council for Research and Innovations in Building and Construction (CIB) www.pbsrg.com www pbsrg com
PBSRG
GLOBAL

March 2009

Related Research Technology Areas

Performance Information Procurement System (PIPS) Supply chain management optimization Organizational optimization through measurement/logic Risk management New project management model New risk model Replaces need for data with dominant information Sustainable/Green System Value Performance Information Risk Management Model (PIRMS) Leadership vs. Management New Government Business Model/Outsourcing Model New Model for Delivery of Professional Services Information environment New contract model (risk management rather than legal document) Industry Structure Model

37

Implementation
Join CIB W117 Create platform Get on calendar six months ahead of time Visiting professor, mentor, coauthor Att d annual Best V l Conference Attend l B t Value C f Join young guns Create strategic plan

Best Value Processes and Structures

Dominant Impact on Industry
Minimize up to 90% of project management/administration/transact ion costs by 20% 20%. Increase vendor profit up to 100% Minimize risk to 2% of projects not on time, not on cost, and client not satisfied Vendors self administers contract No increase in costs ASU (100M+) over ten years

38