CIB World Building Congress, April 2001, Wellington, New Zealand Page 1 of 9

Paper: HPT 21

THE EFFECTIVENESS OF CONSTRUCTION PLANNING EFFORTS: A COMPARISON

OF THE AUSTRALIAN AND UK CONSTRUCTION INDUSTRIES

O.O. FANIRAN1, D.G. PROVERBS2 AND G.D. HOLT2

1
School of Civil and Environmental Engineering, The University of New South Wales
Sydney NSW 2052, AUSTRALIA
2
School of Engineering and the Built Environment, University of Wolverhampton,
Wulfruna Street, Wolverhampton WV1 1SB, UK

ABSTRACT

The significance of construction planning in improving project performance is widely recognized.

Nevertheless, there exists a divergence of opinion as to how much effort is required, or should be
invested in construction planning, in order to achieve project success. Findings from some research
studies have indicated that project performance can be improved by increasing the efforts invested in
project planning activities. In contrast, other studies have suggested that investing in planning efforts
beyond an optimal point increases the probability of poor project performance.

In one previous study, the concept of an optimal planning input for construction projects was
explored, and a probable optimum input value derived, based on a sample of Australian building
projects. This paper presents results from a follow up study, in which the planning efforts in a sample
of 37 building projects in the U.K. were evaluated and compared with the results obtained in the
previously reported Australian study. Trends in the relationships found between planning efforts and
project performance in the follow-up study, were similar to those found in the original study.
However, in order to achieve project success, results suggest that less effort is required to be invested
in construction planning for U.K. projects, compared to Australian construction projects.

KEYWORDS:

Construction planning; project management; Australia; U.K.

INTRODUCTION

Construction planning is the process of determining optimal methods, sequence and timing of
construction operations, and required resources for a construction project. The increasing complexity
of infrastructural facilities in a competitive market place, and clients’ desires for substantial
reductions in delivery times and out-turn costs have made the planning function critical; to achieving
successful delivery of a construction project.

This study addresses the problem of how resources for construction planning activities can be
allocated in a cost-effective and value-adding manner, such that the probability of project success is
maximized. The scope of the study is limited to planning activities that take place within a contractor
organization (prior to commencement of site operations). A previous paper (Faniran et al 1999)
discussed the concept of optimal planning (i.e. optimal investment of efforts in construction planning
activities), and derived a probable value for optimal planning input into construction projects based
on a sample of Australian building projects. This paper builds on the previously reported work, by
replicating the study among a sample of building projects in the U.K. Results of the UK study are
then contrasted with findings from the original Australian study.
CIB World Building Congress, April 2001, Wellington, New Zealand Page 2 of 9
Paper: HPT 21

BACKGROUND

Several research studies have examined the impact of pre-project planning (i.e. planning efforts in the
period prior to commencement of project execution) on project performance. Laufer and Cohenca
(1990) found strong negative correlations between planning time (the time invested in project
planning prior to construction) and variance in project schedule. Faniran et al (1994) also found
similar negative correlations between planning time and project cost and time overruns. Hamilton and
Gibson (1996) found positive correlations between the likelihood that a project will meet or exceed its
financial goals and the level of pre-project planning effort invested in the project. The findings from
these and other related studies appear to confirm the widely held notion, that planning efforts
conducted in the early stages of a project (when expenditures are relatively small) have a much higher
level of influence on the probable outcome of a project. That is, in comparison to planning efforts
undertaken after the project has commenced (when expenditures may be significant). Figure 1
illustrates this 'level of influence' concept (Gibson et al 1995).

RAPIDLY
MAJOR LOW
DECREASING
INFLUENCE INFLUENCE
INFLUENCE
High Large

E
I
X
N EXPENDITURE P
F
INFLUENCE E
L
N
U
D
E
I
N
T
C
U
E
R
E

Low
Small

BUSINESS PRE-PROJECT PROJECT OPERATE

PLANNING PLANNING EXECUTION FACILITY

Figure 1. Influence and Planning Expenditure Curve for Project Life Cycle
(Gibson et al, 1995)

The findings highlighted above suggest that the cost and time performance of construction projects
can be improved significantly by investing more efforts in project planning activities prior to
commencement of site operations. However, results from studies in other disciplines indicate
additional planning effort beyond an optimal level is essentially wasted. Firdman (1991) proposed the
relationships illustrated in Figure 2 to demonstrate the value of investing the “correct” amount of
planning effort into an information systems project. The relationships illustrated in the Figure
indicate that too little planning results in implementation failures, delays, and reworks. Consequently,
there is a high probability that the project will not achieve its intended objectives. When the correct
amount of planning effort is invested, project performance is optimized and there is a high probability
that the project will achieve its intended objectives. Additional planning effort beyond the optimal
level also results in a high level of probability that the project will achieve its intended objectives.
However, this effort is essentially wasted because of implementation delays that inevitably arise, due
to the increasing number of planning loops that occur as planners plan and re-plan minute project
details.
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Paper: HPT 21

Implementation Hasty planning: Implementation

time failures, delays, planning loops

Too detailed planning:

Implementation delays
and planning loops

Good planning:
easy implementation

Planning time

100%

% of vision
achieved

Implementation time

Figure 2. Correct Planning (Firdman, 1990)

Faniran et al (1999) investigated the nature of relationships that exist between preconstruction
planning efforts and the probability of achieving project success, as a basis for exploring the concept
of optimal planning of construction projects. Relationships found in that study suggested that
preconstruction planning efforts did not have any dominant effect on project time performance. On
the other hand, the relationships indicated that although the probability of achieving good cost
performance increased as the planning input into the project increased, additional planning efforts
beyond an 'optimum point' increased the probability of poor project cost performance. However,
these findings had certain inherent limitations arising mainly from the sample characteristics, thus
requiring further research to validate the findings and determine 'globally' accepted values of optimal
planning inputs (if, indeed, there are any). The study was therefore replicated on a sample of U.K.
building projects, thus enabling an international comparison of the results to be made. Findings from
the follow-up study are presented below, and compared with the results of the original study.
CIB World Building Congress, April 2001, Wellington, New Zealand Page 4 of 9
Paper: HPT 21

METHODOLOGY

Eighty-five construction firms in Australia and 100 construction firms in the UK were approached to
participate in the study. Fifty-two firms in Australia and 37 firms in the UK agreed to participate,
representing response rates of 65% and 37% respectively. Tables 1a and 1b show the characteristics
of the projects in the sample. Participating firms were requested to select a building project
completed within the last five years and provide data relating to the amount of time invested in
construction planning, planning engineers’ salaries, planned and actual project costs, and planned and
actual project duration.

Range
Project Characteristics Minimum Maximum Mean

Project cost 350,000 240,000,000 17,400,000

($AUD)

Project duration 3.25 33.75 14.38

(months)

Gross floor area (m2) 250 156,000 12,067.5

Cost per square metre 435.6 7,500 1,830.6

($AUD)
Table 1a. Project Characteristics: Project Size Distributions (Australian sample)

Range
Project Characteristics Minimum Maximum Mean

Project cost 164,300 169,600,000 27,526,742.5

($AUD equivalent)

Project duration 2 54.3 12.9

(months)

Gross floor area (m2) 130 400,000 20,219.8

Cost per square metre 112.6 7,177 2,661.7

($AUD equivalent)
Table 1b. Project Characteristics: Project Size Distributions (U.K. sample)

A major objective of this study was to examine the impact of planning efforts on the performance of
construction projects. However, it is recognized that several other factors apart from construction
planning contribute to project performance. Consequently, the study focused on examining the
relationship between construction planning efforts and the probability of achieving project success.
The research variable, planning input, was used to evaluate the extent of planning effort invested in a
project. Planning input was measured as the percentage ratio of planning costs to total project cost.
Expressing planning costs as percentages of total project costs normalizes differences in planning
efforts that may occur due to differences in project size. Project success was assessed on the basis of
Ashley et al (1987)’s definition which is “results much better than expected or normally observed in
CIB World Building Congress, April 2001, Wellington, New Zealand Page 5 of 9
Paper: HPT 21

terms of cost, schedule, quality, safety, and participant satisfaction”. The variables, cost variance and
time variance, were used as performance parameters for evaluating project success. Cost variance
was measured as the percentage ratio of the final project cost to the original project cost. Time
variance was also measured as the percentage ratio of the final project duration to original project
duration. Descriptive statistics for the research variables are shown in Tables 2a and 2b.

Variables Mean Standard Range

Deviation
Minimum Maximum

Planning input 0.20 0.37 0.01 1.71

(%)

Cost variance 105.14 6.44 91.00 126.21

(%)

Time variance 110.13 17.20 83.33 185.71

(%)
Table 2a. Descriptive statistics for research variables (Australian sample)

Variables Mean Standard Range

Deviation
Minimum Maximum

Planning input 0.18 0.41 0.01 0.52

(%)

Cost variance 109.68 19.26 91.49 181.82

(%)

Time variance 109.22 17.08 83.33 161.90

(%)
Table 2b. Descriptive statistics for research variables (U.K. sample)

In the first stage of data analysis, project performance parameters used in the study – cost variance
and time variance – were tested to determine whether the performances of the construction projects
included in the sample followed a normal distribution. Normality tests were undertaken so that a valid
basis could be established for statistically classifying the project performance into discrete categories
in subsequent stages of the data analysis. The second stage of analysis consisted of converting the
continuous project measures into discrete categorical variables. Average cost performance referred to
projects with cost performance falling in the interquartile range (i.e. between the 1st and 3rd quartiles).
Projects with cost variance exceeding the 3rd quartile were classified as “poor cost performance”
while projects with cost variance falling below the 1st quartile were classified as “good cost
performance”. Time performance was similarly categorized. Quartile values of cost variance and
time variance are presented in tables 3a and 3b. The probabilities of achieving good cost
performance, good time performance, poor cost performance and poor time performance for the
planning input of each case in the sample were computed using bivariate logistic regression analysis.
Linear and curvilinear regression analyses were then performed to examine the nature of the
relationships that exist between project performance and planning inputs into construction projects.
CIB World Building Congress, April 2001, Wellington, New Zealand Page 6 of 9
Paper: HPT 21

Variables Q1 Q2 Q3
(first quartile) (second quartile/ (third quartile)
median)
Cost variance 100.04 104.08 108.17
Time variance 100.00 108.33 115.39
Table 3a. Quartile values for cost variance and time variance (Australian sample)

Variables Q1 Q2 Q3
(first quartile) (second quartile/ (third quartile)
median)
Cost variance 100.00 102.63 109.36
Time variance 100.00 100.02 118.18
Table 3b. Quartile values for cost variance and time variance (U.K. sample)

RESULTS AND DISCUSSION

Tables 4a and 4b show the Lilliefors test statistics for the cost variance and time variance parameters
in the Australian and the UK samples respectively. The results from the normality tests indicate that
the cost variance and time variance in both samples can be said to be approximately normally
distributed. Therefore, the pattern of performance of the projects in the samples can be said to be
good representations of the populations from which the samples were selected.

Variable Kolmogorov- df Significance

Smirnov
Statistic

Cost variance .135 49 .026

Time variance .198 49 .000
Table 4a. Lilliefors test for Normality (Australian sample)

Variable Kolmogorov- df Significance

Smirnov
Statistic

Cost variance .278 34 .000

Time variance .221 34 .000
Table 4b. Lilliefors test for Normality (U.K. sample)

The relationships found between planning input and the probabilities of good cost performance, poor
cost performance, good time performance, and poor time performance in the U.K. sample have similar
trends to those found in the previous study undertaken by Faniran et al (1999). As in the previous
study, the present results suggest that the major impact of construction planning efforts is on project
cost performance rather than time performance. Of particular note are the relationships found
between the planning input and the probabilities of good and poor cost performance (shown in figures
3 and 4). The relationships indicate that the probability of achieving good cost performance increases
as the planning input into a construction project increases. However, once the planning input exceeds
the minimum point of the poor cost performance/planning input curve (figures 3b and 4b) the
probability of achieving poor cost performance also begins to increase.
 CIB World Building Congress, April 2001, Wellington, New Zealand Page 7 of 9
Paper: HPT 21

.5 .4

y = 0.10x + 0.28 y = 0.29x2 – 0.67x + 0.34

Probability of poor cost performance

2
(R = 0.9989) (R2 = 0.9668)
.3
probability of good cost performance

.4
.2

.1
.3

0.0

.2
, Rsq = 0.9989 -.1
..Rsq = 0.9868
-.5 0.0 .5 1.0 1.5 2.0 -.5 0.0 .5 1.0 1.5 2.0

Planning input (%) Planning Input (%)

(3a) (3b)

Figure 3. Fitted regression lines for relationships between planning input and probabilities of good and
poor cost performance (Australian sample).
.35 .3

y = 0.13x + 0.28 y = 1.7x2 – 1.45x + 0.30

probability of good cost performance

probability of poor cost performance

.34
(R2 = 0.9997) (R2 = 0.9947)

.33

.2
.32

.31

.30
.1

.29

.28

.27 0.0
0.0 .1 .2 .3 .4 .5 .6 0.0 .1 .2 .3 .4 .5 .6

Planning input (%) Planning input (%)

4(a) 4(b)

Figure 4. Fitted regression lines for relationships between planning input and probabilities of good
and poor cost performance (U.K. sample).

A probable value of 0.72% was derived for the optimal planning input in the initial Australian study
by determining the cutoff point of the fitted regression curve relating the probability of poor cost
performance to planning input. (The cutoff point is the minimum planning input value corresponding
to a zero probability of poor cost performance). The cutoff point for the UK sample can be
determined by solving the regression line equation (1) below for a value of zero.

1.70x2 – 1.45x + 0.30 = 0 (1)

where x = 0.35 or 0.50: the probable optimum planning input derived for the U.K. sample is therefore
0.35%.
CIB World Building Congress, April 2001, Wellington, New Zealand Page 8 of 9
Paper: HPT 21

It is interesting to note that the probable optimum input derived from the U.K. sample is about half the
value derived for the Australian value. This would appear to suggest that less efforts are required to
be invested in construction planning in U.K. construction projects than in Australian construction
projects in order to achieve project success. However, inherent differences in the sample
characteristics should be considered when making any comparison. For example, both samples
contained different varieties of building project types. Different types of buildings, and indeed
different types of construction projects, would typically require different levels of planning input
depending on the particular characteristics of the project. t-tests were conducted to examine the
significance of differences in planning input, cost variance and time variance in both samples. No
significant differences were found between the planning inputs, cost variances and time variances of
the projects included in both samples at the α<0.05 and α<0.01 levels of significance. However, the
means of the cost variance and the planning input for both samples were found to differ significantly
at the α<0.15 level of significance (with the U.K. sample having a lower mean planning input and the
Australian sample having a lower mean cost variance), suggesting that significant differences at the
α<0.05 and α<0.01 levels of significance might be found with larger samples.

A possible explanation for the relatively lower optimum planning input derived for the U.K. sample
(compared with Australia) is the operating characteristics of project planning practitioners in both
countries. Previous research reported by Proverbs et al (1999a; 1999b) indicates that UK planning
engineers tend to provide ‘slack’ productivity rates with low margins. This suggests that the planning
efforts of U.K. planning engineers are generally less detailed with the focus being on providing a level
of planning input that provides general direction for a project, with sufficient flexibility for change.
While similar research is not available on the operating characteristics of project planning
practitioners in Australia, the results of this study would appear to indicate that Australian planning
practitioners might be predisposed towards more detailed planning and providing ‘tighter’ rates and
higher margins.

Other factors leading to 'less stringent' planning in the UK may be less obvious. For example, it has
been found that UK managers' span of control is much lower than some of their overseas counterparts
(Proverbs et al, 1999c). This may indicate that given such tighter control at site level, UK construction
managers are afforded greater autonomy. This in turn may be mirrored in less formal planning to
facilitate (their) more flexible decision-making (e.g. regarding day-to-day planning matters) as work
progresses. Another factor may be to do with the 'culture' of UK construction where projects tend be
executed in small packages or phases followed by 'inspection' (e.g. for conformance with
specification) at the end of each stage (Nesan and Holt, 1999). That is, planning can not therefore be
too prescriptive under such circumstances in order to allow adequate contingent for return to packages
/ phases for rework, revision or additional work. More stringent planning under such circumstances
would be restrictive.

CONCLUSION

Efficient allocation of resources for construction planning activities requires that the determination of
resource requirements should be undertaken on a value-adding and cost-effective basis. Results from
the study reported in this paper have demonstrated that excessive planning beyond an optimal point
increases the probability of poor project cost performance and is therefore not likely to be cost-
effective. The optimal planning input for UK construction projects was found to be less than that for
Australian construction projects. Although inherent differences in sample characteristics limit
'absolute' comparison of the values derived from both samples, the findings presented could be a
reflection of the operating characteristics of project planning practitioners in both countries. It may
also be an indication that UK are planners adopt a generally less detailed and more flexible approach
than do their Australian counterparts.
CIB World Building Congress, April 2001, Wellington, New Zealand Page 9 of 9
Paper: HPT 21

REFERENCES

Faniran, O.O., Love, P.E.D. and Li, H. 1999. “Optimal Allocation of Construction Planning
Resources”. Journal of Construction Engineering and Management 125(5), 311-319.

Faniran, O.O., Oluwoye, J.O. and Lenard, D. 1994. “Effective Construction Planning”. Construction
Management and Economics 12, 485-499.

Firdman, H.E. 1991. “Strategic information systems: Forging the business and technology alliance”.
McGraw-Hill, New York.

Gibson, G.E., Kaczmarowski, J.H. and Lore, H.E. 1995. “Preproject Planning Process for Capital
Facilities”. Journal of Construction Engineering and Management, ASCE 121(3), 312-318.

Hamilton, M.R. and Gibson, G.E. 1996. Benchmarking Preproject Planning Effort. Journal of
Management in Engineering, ASCE 12(2) 25-33.

Laufer, A. and Cohenca, D. 1990. “Factors affecting construction planning outcomes”. Journal of
Construction Engineering and Management, ASCE 116(1) 135-156.

Nesan, L-J, and Holt, G. D. (1999). Empowerment in construction: the way forward for performance
improvement. Research Studies Press Ltd. ISBN: 0-86380-245-1.

Proverbs, D.G., Holt, G.D. and Olomolaiye, P.O. (1999a). Productivity rates and construction
methods for high rise concrete construction: a comparative evaluation of UK, German and French
contractors. Construction Management and Economics 17, 45-52.

Proverbs, D.G., Holt, G.D. and Olomolaiye, P.O. (1999b). European construction contractors: a
productivity appraisal of in situ concrete operations. Construction Management and Economics 17,
221-230.

Proverbs, D.P., Holt, G. D. and Olomolaiye, P.O. (1999c). Construction resource / method factors
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