DESIGN AND IMPLEMENTATION OF A CONTRACT MANAGEMENT SYSTEM

DESIGN AND IMPLEMENTATION OF A CONTRACT MANAGEMENT SYSTEM

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ABSTRACT

As business become increasingly dependent on Information Technology for their operations, project managers find themselves under pressure to remain innovative and go forward to deliver quality contracts on time and within budget constraints. However they try, some organizations still find it difficult to plan and track project components, stakeholders and resources. Additionally, project managers, team members and customers do not communicate frequently to share their expert opinions. Contracts tend to extend beyond scheduled deadlines, not necessarily due to lack of resources or incompetence of projects members, but often because of inability to elicit requirements completely and inadequacy of proper communication.

To this end, with the advent of Information Technology, there has been an increase in the demand for software that make jobs easier for people, as a result, to keep up with rising demand, project managers need a way to effectively manage their contracts. Using the iterative methodology, a web-based contract management system was developed, that fully monitors contract progress, allocates tasks, creates milestones and provides an avenue for stakeholders to track project progress during its development phase in the construction industry. The developed system which was designed using PHP Hypertext Preprocessor programming language for front-end and MySQL for data storage solves the problem of unity and lack of communication. With this system, once added to a new project, all participating members may send messages to one another and keep tabs on the progress of the project so as to implement the stakeholder’s requirements efficiently.

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

In November 1999, at Counter Entropy Strategies’ Summit on Software in Chicago, USA, 60 top executives from major engineering and software companies agreed that “the Internet will change how engineering software is used by facilitating collaborative efforts involving large numbers of people” (Dossick & Sakagami, 2008, p189). These industry leaders also predicted that “project Web sites will proliferate rapidly and that e-commerce will come to dominate all aspects of sales and marketing in architecture, engineering, and the construction industry” (as cited by Dossick & Sakagami, 2008, p189). Ten years on and have these industry forecasts been realized?

Multiple studies have demonstrated the benefits of using information and communication technology (ICT). However, the Architectural Engineering and Construction (AEC) Industry remains slow in adopting ICT, especially when comparing it to advanced manufacturing industries. A frequently cited reason is that the industry, by its very nature, is highly fragmented and complex. I believe that by understanding the barriers to implementing ICT in the AEC industry, methods can be then identified to overcome those barriers and limitations.

1.1.1        Information and Communication Technology (ICT)

Information and communication technology (ICT) is becoming a significant instrument for businesses and countries in ensuring their growth and competitive advantages are optimized. In the 2008-2009 Global Information Technology Report (GITR), the World Economic Forum Executive Chairman, Klaus Schwab (2009) wrote; “Information and communication technology (ICT) is increasingly moving to the core of national competitiveness strategies around the world, thanks to its revolutionary power as a critical enabler of growth, development, and modernization. The term ICT encompasses Information Technology (IT) plus areas such as telephony, broadcast media and all types of audio and video processing and transmission. It is used to describe a range of technologies for gathering, storing, retrieving, processing, analyzing and transmitting information.

Most developed and many developing countries are embracing the ICT movement as they observe the many benefits it brings, such as; empowering citizens with exceptional access to information and knowledge; offering significant outcomes in terms of providing education and access to markets; and successful means of doing business. New Zealand is no exception and the GITR (2008-2009, P 19) states that New Zealand possesses excellent infrastructure for ICT delivery and an “ICT-friendly political and regulatory environment.The majority of industries appear to be embracing the ICT movement – is the AEC (Architectural Engineering and Construction) industry?

1.1.2 ICT and Contract Management in Architectural Engineering & Construction (AEC) Industry

The AEC industry is fragmented due to its multi-disciplinary/multi-organizational nature and the many stakeholders and phases involved in a construction project environment. According to Nitithamong & Skibniewski (2006), this has led to well documented problems with information and communication processing and low productivity in construction projects. Matheu (2005) concurs and states that it has also “contributed to the proliferation of adversarial relationships between the parties to a project”.

The use of Information and Communication Technology (ICT) in the AEC industry is creating new opportunities for collaboration, coordination and information exchange among organizations that form a construction project team (Matheu, 2005, p38). ICT is becoming more evident in the AEC industry and is especially being used to combat the fragmentation issues referred to above. Its benefits consist of more efficient financial control and communications, an increase in the quality of documents and the speed of the work, and simpler and faster access to data and reduced errors in documentation (Matheu, 2005, p1).

The Internet is at the center of the ICT applications which best facilitates a collaborative working environment in a construction project. It was predicted by Walker and Betts (1997) that the Internet will be the key to change in global construction business in the near future and will impact professions, collaboration, and the construction business structure (as cited in Nitithamong & Skibniewski 2006). Matheu (2005) stated that its use as a communication means can help information transfer occur more quickly and effectively, providing “a unique opportunity for the development of distributed systems that can cross organization boundaries and provide a unique opportunity for teamwork and workflow automation”. The web also has the ability to overcome incompatibilities of data formats; meaning that project participants using different software applications may eventually be able to share the same information over the Web in real time without any data transformations (as cited in Nitithamong & Skibniewski, 2006).

The use of ICT allows for real time access of information and improves coordination and collaboration between the project participants. Ahuja, Yang, & Shankar (2009) state that when utilized, its benefits include, “an increase in the quality of documents and speed of work; better financial control and communications, and simpler and faster access to common data as well as a decrease in documentation errors as use of incorrect data can comprise the scheduled completion of a project and lead to wastage of resources”.

1.1.3 Web-based Contract Management Systems

In recent times the concept of how ICT can manage construction projects has been widely acknowledged by practitioners (Matheu, 2005, p1). This concept is now commonly referred to as a computerized Contract Management System (CMS). A CMS is an electronic project management tool conducted through the Extranet, which is a private network that uses Internet protocols to transmit information. They are designed to store and manage project information. Basically, these systems provide a centralized, commonly accessible means of transmitting and storing project information. Project information is stored in a server and a standard web browser is used as an access point to exchange this information, eliminating geographic and boundary hardware platform differences (Matheu, 2005, p1).

The basic rationale behind CMSs is that communication and information control in modern design and construction projects are chaotic. Frequently, this leads to lapses in communication, poor understanding, and ultimately, to annoyance, conflict, and cost and programming over-runs (O’Brien, 2000). These systems offer a level of access to project information that exceeds traditional means of communication such as telephone, fax, traditional post, and email, and storage mechanisms such as project binders for hardcopies. CMSs provide project participants with the same information in a reliable and easily retrievable method, in theory, improving communication and leading to improved projects (O’Brien, 2000).

Many authors believe that CMSs improve overall coordination, collaboration, and communication on construction projects in a variety of ways which will be discussed in subsequent chapters (Cox, 2007). Cox (2007) comments that, “No other technology provides interaction, communication, collaboration, archival data, a project-information continuum, participant reliability, and accountability”. Cox (2007) also suggests that CMS technology is, “placed to make the largest impact on construction project delivery since the introduction of the person computer”, which is a bold statement.

1.2 STATEMENT OF THE PROBLEM

Despite proven advances in the technology itself and the considerable and recognized benefits Computerized Contract Management Systems (CMSs) present, adoption and implementation of this technology still remains slow within the Architectural Engineering Construction (AEC) and contract industries in general.

For consuming necessary time, keeping all troubles less, and to organize all
documents into one place and most importantly, to keep track of contracts that are in production for customers or for keeping an eye on errors or mistakes that occur during the work process, then a good Contract Management System is needed. To consider everyday use and needs, the aim was to make an inside system for the company. The system is for helping workers (namely programmers, project managers, developers) to deal with some specific project and its errors occurred. Project management system is needed, for helping to organize and keep an eye on contracts and there processes. The system is web-based; there are possibilities to add documents and specifications for specific project. Documentation can consist of different graphs, database diagrams and graphical diagrams, which are needed for project development. The most important part is that, the system has an issue tracking system, a system where can be added comments, bugs and other related questions for specific project.

At the moment, the company has no documentation management system; Specification requirements, application documents and other kind of documents related to one specific project lay around in different places. Most of these documents get spoilt after long time of mishandling. This yields problems as the company cannot keep accurate track of income and expenditures as to maximize profit.

It is better, less time consuming and comfortable to get all the documents in one place. Cloud storage can also be used for database backup. Besides this, the system has all documents related to a specific contract, it also has the code, right paths, folders and links for easy website navigation.

1.3 OBJECTIVES OF THE STUY

      The main objective of this study is design and develop a computerized contract management system for a construction industry. To achieve the stated objective, the following specific objectives were laid out:

•      Design a decentralized system where contractors and managers can share and store contract information

•      Design a secured database for data and information storage devoid of unauthorized access and hack.

•      Develop a nice and easy to use interface that will to a great extent reduce the stress involved in writing on a paper.

•      Develop a module in the system for easy search of contracts, sorting either by date, paid, completed or pending.

1.4 SIGNIFICANCE OF STUDY

Although the current uptake on CMSs is lower than the anticipated trend, the systems hold great promise and are expected to replace traditional project management methods (as cited in Nitithamong & Skibniewski, 2007). CMSs are focused on efficient information management, of which is a major element is collaborative communication. According to Quashie (2009), a well-structured communication system is a key factor in the success of building project management.

In achieving the aim of this research, the information and data gathered will assist in increasing the general awareness of CMSs and their associated benefits in the AEC industry; inform CMS vendors of general limitations with the software; and inform the AEC industry how and why to implement CMS on New Zealand construction projects. This study will be of interest/significance to the AEC industry and their clients.

Government, industry and clients are all seeking to bring about a change in the construction industry, change that will increase value to clients by improving quality, competitiveness and profitability. Traditionally, the emphasis has been on project managers to manage the interface between the project and the client’s organization. There is now a shift towards the requirement of managing the flow of information through the whole life cycle of the project with greater emphasis on those activities which actually add value.

Project managers would particularly benefit from this research as “communication consumes about 75-90% of a project manager’s time and information” and CMSs are predominately centered around improving the communication flow and control on construction projects. Matheu (2005) reiterate this point by stating that, “the management of construction projects is about managing the project communication and information flow. And managing project information about managing the documentation generated in a particular contract”.

This study will also highlight how CMSs have significant potential to add value to the internal performance of an organization and to the whole life cycle of a project, as well as the client. That is, the potential benefits of successful implementation. Understanding which factors are critical for system success is fundamental for improved CMS implementation.

By verifying the benefits of using such systems, setting out the barriers to CMS implementation and identifying methods of overcoming those barriers, this study will also:

•      Assist the vendors of Web-based project management software with feedback from their users,

•      Encourage organizations to prepare for and implement ICT, and

•      Provide options for overcoming the barriers to implementing CMSs for the AEC industry and their clients.

1.5 SCOPE OF THE STUDY

This study revolves around creating a computerized system that will enable contracts management company carry out their projects smoothly. It is a web-based system which is going to run on


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