Majority of the respondents felt that CW offers significant benefits in construction. However, not fully applying the core attributes especially in the current costing approach means maximum benefit would not be realised in practice. Exploring the concept of collaboration and ‘costing collaboratively’ as shown in Figure 5-3 revealed how partially the process is understood in practice. This is even though previous studies (Sunil et al., 2011; Hanid et al., 2014; Kuo and Wium, 2013; Marchesan and Formoso, 2001) have stressed on the significance of collaboration for cost management practice. Whilst achieving CW seems essential in practice, the study also discovered that the current costing approach does not overtly considers commercial and supply chain groups during conceptual planning either in traditional or in multidisciplinary settings.
For instance, a main contractor interviewed on MC02 stated that ‘we don't involve our strategic suppliers (tier-2) when we’re building these costs; we design and give them to quote’. This can equally be interpreted as cost negotiation that dominates the current practice and a challenge to CC. Besides, this arrangement (cost negotiation), which is supposedly referred to as ‘collaborative costing’ completely lacks trust, open dialogue, shared understanding and the wider sense of togetherness, instead it encourage the habit of ‘mining for profit’ from the contracting parties (Pasquire et al., 2015).
Invariably, the current practice continued to provide one-way streak for clients who negotiate or request for input when it suits them but thoroughly lack openness and interactions in the process. Unsurprisingly, these views are inspired by ‘institutional’ factors (Sarhan, 2018), which seems to be compounded by the issues of fragmentation, cultural resistance and the poor approach in costing practices.
In addition, the core attributes that were found to support CW are missing in the current costing practice. The most apparent is the absence of dialogic conversation when
Exploratory Findings and Discussions Chapter Five
Page 168 establishing client’s costs and the lack of cross-functional integration to explore cost and design alternatives. For instance, an interviewee stated that ‘’we build our projects cost mostly reliant on the market prices and sometimes that becomes the amount to spend on the overall scheme’’ [CD05].
According to (Simonson, 2016), the essence of these dialogic conversations when establishing the target cost is to determine the degree of certainty on the overall costs for owners to ensure sufficient funds are available to finish the project, and to equally assist in making informed cost-benefit analysis before construction commence. It can be argued that if these dialogic conversations were not shared and widely understood, the chances of attaining cost certainty by QSs or contractors cost estimation would be slim, as the overall process still rely on excessive contingencies. Indeed, the current approach needs a strategy that best aligns the interest of all stakeholders involved, including commercial & SC groups to inspire productivity, innovation, and encourage value addition beyond the least cost approach. (Zimina et al., 2012).
Factors that inhibit ‘costing collaboratively’ and encourage commercial behaviours were found to be the prevailing construction model, ‘institutional’ system, rigidity in estimators/QSs roles, client’s presumptions of cost adviser’s roles, deep-seated cultural resistance and bureaucratic roles among others. The lack of cross-functional integration is evident in costing practice as revealed from the study. For instance, during the interview, one of the respondents was asked; ‘’how do you think the prevailing system affect collaborative practice and cost management practice?’’ the response is ‘’now more than ever, there is a huge divorce between costing and design activities and away from production’’ [SQs, 03]. This indicates poor understanding of ‘collaborative production’ (as discussed in chapter two), which is dominated by the functional approach (activity- to-activity) thinking, as seen in costing and design process. Thus, this shows that when the focus of project delivery is derail from managing efficiency, process flow and value in pursuit of cost reduction - the entire collaborative practice would collapse (Conte at al., 1998).
Arguably, the prevailing construction system is encouraging the much focus on sharp cost reduction than achieving flow and value in practice. As seen from the study findings, inexperience clients often do not understand QSs value in practice; hence, this view does not encourage commercial actors to support collaborative efforts in construction. It is also clear that most of these professionals (designers, estimators, cost consultants QSs etc.) on
Exploratory Findings and Discussions Chapter Five
Page 169 commercial functions are often assessed based on their organisational interests and profits instead of performances or their inputs in projects. Arguably, this arrangement will continue to encourage professional consultants to not take on risks or contribute in optimising value, but adamant to be paid on their accustomed cost-plus-fee basis (Eriksson and Laan, 2007). Consequently, this view is serving as a direct barrier to collaborative practices and the illustration where commercial imperative lie, hence, the custom and safeguarding practices.
Nonetheless, the study has found some drivers and enablers that would support CC, which perhaps could also be instrumental in aligning commercial interests in the industry. Some of these factors include early stakeholder’s integration/upfront investment, which would enable certainty and transparency in costing process, thus, a platform for collaboration (Rahman and Alhassan, 2012). Others are client leadership, transparent risk and estimating strategies and relational contracting. Consequently, these might support information and knowledge sharing, linking costing and design development activities with the business objectives where clients get what they need within their affordability and service providers earn more when they assist in enhancing value in projects (Ballard, 2011; Kuo and Wium 2013). Indeed, these continued to show why commercial practices require significant change for it to allow the much-desired collaborative working to flourish in the UK construction industry.
5.9 Summary
The main purpose of the data collection in this chapter was to address objective (3) of this research, which is to understand and defined the idea of ‘costing collaboratively’ CC. The analysis further established a clear distinction between collaboration and cost negotiation. Similarly, the study found several attributes that shed light on the current practice and the idea of CC. These include target costing, integrated value engineering and optioneering process. Therefore, from this investigation CC is seen as an approach that engaged stakeholders (upstream and downstream) around wider scheme budgets creating a sense of ownership, driving positive behaviours to achieve desired cost outcomes. Accordingly, the chapter presents findings on the constituents of collaboration and its meaning in practice, the perceptions of CC from QSs, and the divergent views on collaboration and cost negotiation amongst the respondents interviewed in the UK construction industry. Furthermore, the chapter identified factors affecting CW practices, which also revealed the challenges in the current costing approach, commercial practices and implications
Exploratory Findings and Discussions Chapter Five
Page 170 facing professionals, culture, organisations, and the wider industry. In addition, these explorations also revealed factors affecting CW within the UK construction industry. These include the prevailing model, institutional arrangements, underlying economy, corporate environment, professionalism and drivers among others. More so, the chapter revealed some drivers and enablers for commercial alignment in supporting the culture of collaboration in the UK construction sector. Among others, these include client & stakeholder’s interventions; cross-functional integration, relational contracting; social competencies and costing collaboratively. The absence of these factors continued to show poor understanding of efficient ‘flow’ and ‘value’ amongst stakeholders in practice. The next chapter will present and discuss the findings from the multiple case studies.
Multiple Case Study Data Analysis, Cross-Case Comparison & Discussions Chapter Six
Page 171