Effects of Preconstruction Activities on Net Promoter Score

Abstract

Owner, designer, constructor, and other construction stakeholders put every effort into the project for its success but it is not easy to achieve project success. A number of projects fail to achieve project goals and end up exceeding cost and having schedule delays. Therefore, cases of customers mistrust and dissatisfaction have increased. This research attempts to prove the fact that the PreConstruction Activities (PCA), which are composed of the predesign, design and procurement phase of the 5 stages in the construction project lifecycle, significantly contribute to the projects success as well as acquire loyal customers. PCA is to review the goals (cost, schedule, and quality) established during the planning stage based on the owners requirements prior to construction initiation. It is a task to develop a construction professional service to increase the completeness of the drawing in order to achieve the project goals without significant issues during construction. In addition, identifying a competent construction partner for construction is also an important activity within PCA. In depth study of design management, the key to PCA, was also initiated for this research. Best practices cases for partnering and integrated project delivery (IPD) were reviewed and the how performance can improve through PCA was discussed. Case studies and critical success factors (CSFs) on schedule reduction and PCA, the main topic for this research, were analyzed. The Empire State Building (ESB) built in the early 1930s is an example of schedule reduction and was analyzed thoroughly to determine the methods utilized to reduce construction schedule, and its applicability was further discussed. Then, schedule management issues in the Korean construction industry were discussed and method to reduce schedule through PCA was suggested. PCA evaluation form was developed based on the CSFs of a project to evaluate how well PCA is performed for a specific project and suggested as a tool to assess the PCA performance. The developed PCA evaluation form was verified based on a pilot test and the relationship between PCA and schedule reduction, schedule reduction and customer satisfaction, customer satisfaction and NPS was analyzed based on 8 years of customer survey data aggregated by H-Company. Analysis results showed PCA had a distinct causal relationship with schedule reduction, customer satisfaction and NPS. The relationship between PCA and schedule reduction showed that the effect of schedule reduction due to PCA was maximized when PCA was performed early in the project phase during preconstruction. Especially, this research proved that PCA was most effective in schedule reduction for tall and super tall projects. PCA had also an effect on schedule reduction which is a factor of performance satisfaction, as well as reliability, a factor of process satisfaction. After analyzing the effect of PCA on NPS, the longer PCA phase and more manpower utilized for PCA yielded to higher NPS at the end of a project. When PCA accounted for 30% of the total work period, there was a 45.3% difference in NPS compared to that of projects that did not perform PCA. When manpower mobilized during preconstruction accounted for more than 30%, a difference of 48.3% was shown compared to projects without PCA, proving that PCA has a significant impact on NPS. Such results was possible due to the virtuous cycle where that is verified in this research where a well performed PCA can achieve high completeness of design as well as selection of construction team → construction with high quality and high productivity → project success → customer satisfaction → increased net promoter score (NPS). The research contribution can be summarized as the following. (1) The importance of PCA was discussed in various perspectives and case studies, and the possibility of schedule reduction through PCA was established. (2) The PCA evaluation form was developed based on critical success factors (CSFs) and its feasibility was verified. It was also suggested as a tool to evaluate how well PCA is performed for a project (3) This research proved that customer satisfaction is possible by performing PCA and achieving qualitative performance and quantitative performance. Also, by analyzing the NPS data, this research determined that satisfied customer can become a loyal customer. (4) The theory of customer satisfaction and NPS was systemized in the construction industry which contributes to the customer satisfaction management. This research points out that a repetitive purchase by loyal customers lead to profit. Therefore, the virtuous cycle model is suggested as a new paradigm for the management in construction.