Editorial

Citation

Walker, D.H.T. (2016), "Editorial", International Journal of Managing Projects in Business, Vol. 9 No. 1. https://doi.org/10.1108/IJMPB-10-2015-0106

Editorial

Article Type: Editorial From: International Journal of Managing Projects in Business, Volume 9, Issue 1.

About this issue

This first issue for 2016 contains special issue (SI) papers providing results of research into “managing transport infrastructure PPPs” with Hans Voordijk from the University of Twente in the Netherlands as guest editor. Transport infrastructure is a vital contributor to the world economy. This SI provides five papers and an editorial for that SI component following this editorial. The guest editorial explains the context of the SI and also provides a useful contribution with five important conclusions about future directions for research that are drawn from the selected five papers.

Of the remaining five regular papers of the ten papers comprising this issue, three are related to topics about transport infrastructure project delivery. This issue is completed by the inclusion of one book review.

Paper six is the first of two regular papers written as complimentary linked contributions by Pertti Lahdenperä from Finland. The paper is entitled “Preparing a framework for two-stage target-cost arrangement formulation”. This paper should be read together with the following paper. These two papers make an important contribution to the literature on collaborative forms of project procurement, specifically the way that target cost mechanisms may be improved for an alliancing approach. Paper six is a conceptual paper that sets the scene for discussion about a two-stage target-cost (2STC) approach for project alliances and other target-cost project procurement forms. Readers who share an interest in the process involved in setting the target cost for project alliances, and how that process might address challenges of ensuring a best value solution, will find this paper stimulating and authoritative. It complements and expands the value presented by the SI papers. Paper six draws upon research and insights on project alliancing practice to establish precise design criteria for 2STC formulation at the level of (qualitative) principles and special consideration of quantitative information. It identifies a number of requirements for the model, mechanism-related intrinsic criteria and valuation-related extrinsic criteria, for effective target cost setting through a two staged process.

Paper seven follows, written by Pertti Lahdenperä, and is entitled “Formularising two-stage target-cost arrangements for use in practice”. This paper provides the modelling and explanation of the study methodology that led to the development of the target cost model. One significant challenge faced by project owners and delivery teams for complex projects that face numerous uncertainties and contextual conditions is that uncertainty, risk, ambiguity and technical and relational complexity demand that all parties to the project must develop contingency budgets to ensure that the end cost does not leave the owner paying too much to achieve value for money or for the delivery team to effectively subsidise the project through under-quoting: or at worst becoming bankrupt through making a loss on the project delivery. This is a vexing and highly relevant problem. The SI papers indicate how PPPs and Alliances may be used to create conditions in which project owners and project delivery teams may collaborate, however, there is little available deep and rigorous detailed discussion to be found about the pricing mechanism that can balance pain/gain sharing on differences between the agreed target cost and actual cost. This paper bridges that gap and also, and this is very important, discusses the contentious issue of incentivisation and encouraging and rewarding innovation that contributes to cost savings. This paper could, and perhaps will, be considered a landmark paper for readers interested in issues of cost and value in the delivery of projects. At the very least, this paper should prompt experts in cost management and cost estimating of projects to re-consider their approaches to accommodate and finesse incentives for collaborative innovation and smart thinking that allows project teams to not only plan project development and delivery more effectively but to rise above setbacks and difficulties when overcoming emerging challenges.

Paper eight “Low Estimates – High Stakes: underestimation of costs in front-end of projects” by Bjorn Andersen, Knut Samset, Morton Welde from Norway continues the focus in the issue on infrastructure project delivery and the previous Pertti Lahdenperä contributions on cost targeting. This paper reports on a study from an in-depth perspective on cost estimation, from the development of the initial idea until the budget is agreed. It provides new insights into issues of underestimation at the front-end of projects. One aspect that is interesting about this paper is that it is a study of unusual projects where there were very large cost blow outs at the front-end. This study of the magnitude and cause of cost escalation of what is often ignored as “outliers” in large data samples, provides deep and interesting causal insights. The paper suggests a number of recommendations that might help to counter the problem of unrealistic early cost estimates. This in turn, might allow suboptimal projects to be funded. Norway has a rigorous and highly specific process for project sanctioning of government funded projects providing this research team with access to a wide range of useful data to analyse. Their focus on problematic projects, and the availability of data about such projects, provides a rare and useful contribution because while “success” claims many fathers “failure” appears to be an orphan. Reasons for any cost blow-out are generalised around cognitive, technical and political categories with more detailed explanation and examination of likely causes. The paper poses and responds to the question of “pain threshold”, i.e had the initial estimate been twice, triple, quadruple, etc., the size actually presented, would the project have been dismissed? Another question is what would have been a realistic initial estimate? These are important questions and the paper provides some salient answers that should be heeded when contemplating projects. Their paper also de-trivialises often vaguely cited and poorly articulated explanations of many cost over-runs being caused through scope creep. The authors offer six recommendations: increased transparency; cost estimates to be based on uncertainty analysis; increased provisions for uncertainty; the use of a database of reference projects; third-party review of cost estimates; and a focus on initiative, incentives and financing.

The ninth paper “Antecedents of team turnover intentions in temporary organizations: development of a research model” by Helge F.R. Nuhn and Andreas Wald is from Germany and Norway. While many of the papers in this issue have a focus on process, technology and administrative issues, there has been an underlying acknowledgement of the importance of the people in any techno-system interface. The aim of this paper is to develop a comprehensive research model that comprises different factors which influence people turnover intentions in temporary organisations. These factors are grouped into four personal factors, four job-related factors and six organisation-related factors all supported by a set of propositions. This is a conceptual paper that proposes the research approach that will take place later to test the model. The main contribution made by this paper is that it integrates identified propositions in a research model and shows the postulated main effects along with moderating effects.

The tenth paper from Annika Andersson in Sweden is entitled “Communication barriers in an interorganizational ERP-project”. This paper has its focus in the exploration and analysis of communication patterns and bridging activities to be able to describe and better understand communication barriers in an inter-organisational ERP (Enterprise Resource Planning) project together with a recommendation of ways to overcome these barriers. The research approach adopted made use of a single in-depth case study of an inter-organisational ERP project as a starting-point for further research concerning communication barriers in ERP-projects in general. Data were gathered from documentary artefacts, observation and a series of extensive interviews with key representatives from the buying and supplying company as well as from both individuals involved in the project delivery. Data from observation and extensive note taking from 11 project meetings also complimented the data gathering process. Interestingly, this study made extensive use of recording and analysing the tone of voice in conversations as further evidence of the nature and style of communication under study. This wealthy stock of data was then analysed. Six communication barriers were identified and their impacts assessed. These were: limited IT competence and knowledge of terms; attitudes and social influence; technological concerns; limited bridging activities in the team; being closed to changes and focusing on the contract; and being open for changes. While the type of project studied was an ERP project the paper also makes a research method contribution because the approach can be used to study any type of temporary project organisational situation from a praxis perspective.

The issue concludes with a review by Derek Walker of a book by Humphreys, A. and Gibbs, R. published in 2015 entitled Enterprise Relationship Management: A Paradigm for Alliance Success. This book review is highly relevant to the theme of this SI. It is one the books from Gower that many readers of this journal and PM practitioners and academics should find interesting.

Derek H.T. Walker