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  3. > Australian Construction Project Management and Delivery—Voice of the Customer Study : What are the Challenges and the Pain Points for the Clients of the Construction Industry?

Research Objectives

•Typically, the construction industry tracks metrics related to construction activity, spending, growth, and competitive factors.
•However, a significant challenge for the industry is to understand customer perspective on project delivery. Some of the aspects the industry considers are as follows: What are the factors customers consider when choosing a contractor? What are the major points of dissatisfaction? How are they leveraging technology in their management of projects?
•This study aims to help address this challenge by understanding the priorities and the pain points of client-side construction project managers.

The questions at the core of every construction business are as follows: What do project managers want? What keeps them coming back to a particular construction firm? What are they telling us that can help us provide them with better services and an enhanced experience? What are they not telling us directly, which had we known and acted upon would have prevented them from taking their business elsewhere?
Voice of the customer (VoC) initiatives capture and centralize information from multiple touchpoints to improve business processes and customer experience.

Key Questions this Study will Answer

What are the most significant challenges project managers face in terms of delivering a successful project?
What specific macro changes will impact the way current and future construction projects are executed?
Are there any recent or upcoming regulatory/policy/standard changes that will influence construction projects?
What specific technology changes will affect the execution of current and future construction projects?
Will changes in construction contractor firms impact the way project managers use their services?
What are the key factors organizations consider when selecting a contractor for a project?

Methodology

Data Collection
•The key insights presented in this study were obtained from primary data collection, through telephonic interviews with x client-side project managers in Australia. A structured discussion guide was used, and it included closed and open-ended questions to obtain measurable as well as qualitative feedback.

Sample
•Project managers across all states and territories were interviewed between August and October, 2014. x client-side project managers provided detailed feedback. No quota was placed on the size of the firm, which ensured that feedback came from firms of varying sizes. The job titles of the respondents interviewed typically included project manager, project officer, project director, and construction manager.

Reporting Notes
•Due to rounding issues, percentages in exhibits may not sum to x. Individual feedback from respondents has been de-identified and aggregated to ensure confidentiality.
•All figures are in Australian dollars, unless stated otherwise.

Executive Summary

•With the scale and the complexity of construction projects in Australia continuing to increase, the demonstrable expertise and track record of contractors will play a significant role in acquiring new projects. Although clients are under substantial cost pressure, the scale of the capital outlay for construction projects prompts them to adopt risk minimization strategies, with the contractor’s capabilities being given high priority. For instance, the average value of an infrastructure project reported in Deloitte Access Economics’ Investment Monitor database rose from $x million in 2001 to $x million in 2013.
•The complexity of construction projects also poses a significant challenge to client-side project managers, manifesting in cost overruns. This, in turn, changes the process by which contractors are brought on board. In the past, cost overruns may have been viewed as unavoidable, now, however, clients are increasingly bringing contractors on board in the early stage of the planning and design process. This is being done so that budgeting can be made more accurately and cost savings can be maximised. The adoption of the early contractor involvement (ECI) model is expected to increase, particularly in the private sector.
•Compliance with regulations, when combined with environmental management issues, is proving to be almost as significant a challenge as cost overruns. Due to the difficulties in navigating through various regulations, project delays occur, also burdening managers with significant administrative tasks.
•While construction equipment is playing an increasingly important role in today’s construction site, the industry remains highly labor-intensive. Shortages in skilled labor in the domestic market make it difficult for client-side project managers to find contractors with the necessary talent. In addition, union participation and wage inflation make workforce management issues top-of-mind for managers. For example, over the last decade, one of the fastest-rising cost components for construction has been labor. The average annual growth rates for labor costs, which were x% from 2001 to 2006, rose to x% between 2006 and 2011.
•Changes in communication solutions were identified as the most significant shift in the impact of technology on the construction industry. Of particular note was the increased use of construction collaboration platforms that allowed project managers and various stakeholders to seamlessly share project-related documents and updates. Given that inefficient communication was cited as the primary source of dissatisfaction among contractors, the increased adoption of construction collaboration platforms is a step in the right direction.

CEO’s Perspective

While cost overruns are the main challenge for project managers, track record is the primary criterion used to select a contractor.
The need to manage costs and reduce risk is likely to advance the point at which contractors are brought on board.
Next to cost overruns, addressing compliance obligations is the most significant challenge for client-side project managers.
Workforce-related issues stemming from macro changes pose several challenges to project delivery.
The most important shift in the use of technology in construction projects relates to the leverage of communications solutions.

Table Of Contents

Australian Construction Project Management and Delivery—Voice of the Customer Study : What are the Challenges and the Pain Points for the Clients of the Construction Industry?
Introduction 5
Overview of the Global Construction Industry 14
Overview of the Australian Construction Industry 21
VoC Study Findings 37
Implications for the Construction Industry 59
Mega Trends 63
The Frost and Sullivan Story 70

Exhibits Slide Number

Construction Industry: Public versus Private Sector Participant Ratio, Australia, 2014 9
Construction Industry: Percent of Project Managers by Key Vertical, Australia, 2014 9
Construction Industry: ICT Spending, Global, 2013 and 2018 16
Construction Industry: Trends Driving the Uptake of Collaboration Solutions, Australia, 2014 19
Construction Industry: Revenue Share by Segment, Australia, 2014 22
Construction Industry: Change in Construction Value, Australia, Jun Qtr 2013 to Jun Qtr 2014 24
Population Growth, Australia, 2004-2014 25
Construction Industry: Key Verticals, Australia, 2013-2014 26
Construction Industry: Work Value-States and Territories, Australia, 2013-2014 27
Construction Industry: Construction Activity Value, Australia, 2012-13 to 2022-23 28
Construction Industry: Market Structure, Australia, 2014 31
Construction Industry: Managing the Changing Risk Profile of the Industry 34
Construction Industry: Serious Claims - Incidence Rate by Year, Australia, 2000-01 to 2011-12
Construction Industry: Significant Challenges in Project Management, Australia, 2014 38
Construction Industry: Macro Changes Impacting the Industry, Australia, 2014 42
Construction Industry: Technology Changes Affecting Projects, Australia, 2014 45
Construction Industry: Innovation Standards, Australia, 2014 49
Construction Industry: Perception of Technology Lag- Public versus Private Sector, Australia, 2014 49
Construction Industry: Top Contractor Selection Criteria, Australia, 2014 50
Construction Industry: Satisfaction with Existing Firms, Australia, 2014 52
Construction Industry: Engineering Firms Used, Australia, 2014 53
Construction Industry: Contractor Selection Stage, Australia, 2014 55
Construction Industry: Unfulfilled Contractor Expectations, Australia, 2014 56
Construction Industry: Causes for Unsatisfactory Outcomes by Contractors, Australia, 2014 57


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