Importance of KPI identification and implementation in Kuwaiti construction industry

Abstract

Key Performance Indicators (KPIs) play a vital role for organizations to measure project performance. The core objective of Key Performance Indicators is that not only organizations but also customers want their projects to be completed within the stipulated time and budget while maintaining the quality standards. Performance measurement is foundation for continual improvement. Subsequently, as a regular rule, benchmarking is the next step to improve contractors’ efficiency and effectiveness of products and processes. Camp (1989) introduced benchmarking concepts and defines it as “the continuous process of measuring products, industry leaders.” It is a problem to measure the performance of large projects such as construction and communication projects using predefined KPIs. Objective of this research is to find a framework to improve project performance through benchmarking of key performance indicators, to identify the suitable KPI prevailing in the construction industry of Kuwait and develop and calculate the KPIs to assess the performance of the construction projects and making recommendations to improve project performances of construction industry. For this study two Kuwaiti construction companies are selected i.e. Company AA and Company BB. Performance of their financial and non-financial data is analyzed. Primary data is collected through questionnaires and in performance of Company BB. Data also revealed that Company BB’s are having cost and time overrun. Organizations like Company BB have to investigate reasons of cost and time delays causing dissatisfaction. Decision of material selection and delivery time should be carefully taken. Organizations should improve its employment policies from selection to compensation, working conditions, motivations and availability of health and safety facilities; as satisfied customers can satisfy customers. Subsequently, Company BB management performance needs immense improvement at all levels and in all processes. Consideration of design quality indicators (DQI) as per requirement of stakeholders and bio-diversity impacts, it is impossible to satisfy the internal or external stakeholders of construction projects. This thesis contributes useful and new knowledge to the Kuwaiti construction industry. This study reveals the importance of significant KPIs needed for the growth of medium construction organizations through benchmarking the bigger organizations. The ultimate goal of this study is to highlight the importance of KPIs to access success of medium construction organizations. Although it is believed KPIs could be used for benchmarking of bigger size organizations