Development of a systems dynamics framework for KPIs to assist project managers' decision making processes

Abstract

Following a critical appraisal, redefinition and categorisation of Key Performance Indicators (KPIs) and their scope according to their use as an online management or monitoring tool (Roberts and Latorre 2009); this successive paper builds upon the first and focuses the research on the modelling of the construction project in terms of KPI driven goals using Causal Loop Diagrams (CLDs). The paper presents the results of a research project developed in order to identify the obstacles which prevent achievement of the overall performance desired for the UK's Construction Industry. Particularly, how project managers' decisions impact such performance. The objective of this paper is to present the development of a KPI Hierarchy Model which will enable the contextualisation of the KPIs and allows for all relevant goals, contextuaelements and their interactions to be visualised easily. The integration, control and monitoring of this complex system and its objectives, feedback relations, delays and flow of information presents a need to understand and model how the components of these systems interact with each other. The categorisation and subsequent development of Project and Company Level KPI CLDs suggests that the KPIs fit into separate hierarchies enable the proposed KPI Hierarchy Model to be modified and refined according to the real challenges that projects pose to the decision making process of project managers. The model explained in this paper presents the need for increased efficiency in the Construction Industry and the role that Key Performance Indicators (KPIs) have in driving these required efficiencies.