Many problems such as
cost overrun, schedule delay, low quality, and stakeholders’ dissatisfaction
are frequently reported in construction projects in in Egypt and all other
countries. Early predict these deviations help solve the problem and minimize
its effect. Early notice is the outcomes from good forecasting for the project performance.
Forecasting is an essential element of project management throughout the life
cycle of a project. The reliable forecasts are critical because even with a
detailed plan, there are inherent risk factors that may influence the actual
performance of a project. As a result, the project manager continually seeks
leading indicators for potential problems so that appropriate actions can be taken
in a timely manner to minimize the expected variances from planned performance.
These leading indicators are the part of the project forecasts.
prediction models developed in this study would enable owners, consultants, and
contractors to predict how successful their projects.
Most of the
construction experts agree on that it has not been easy determining, predicting
or influencing project performance during the early phases of the project. All
such work has certain limited accuracy. Although that, many performance
evaluation models have been developed along the previous 3 decades. They are
dealing with this problem at three different levels: 1- construction industry;
2- company; and 3- project. Models at the construction industry levels are used
to measure the effect of economic, political, and social changes on the
performance of the construction industry as a whole. Kangari, 1988 relates the
changes in construction industry failure rate to some macrocosmic factors:
average prime interest rates, amount of construction activity, in?ation, and
new business entering the construction industry. Most performance evaluation
models for construction companies are based on their annual ?nancial statements
or reports. Different analytical techniques have been used to develop these
?nancial statement trend analysis;
?nancial statement structural
?nancial statement ratio analysis.
The most important indicators that
could be used in ?nancial statement trend analysis to differentiate between successes
and failed companies are: accounts receivable, under-belling, accounts payable,
notes payable, total long-term debts, stock and retained earnings, cost of
sales, and gross pro?t.
The aim is to predict
the final performance at early stages in the project, for the reason that in
case of undesired performance, the project team should have the time and
resources to act proactively and take corrective action without causing
schedule delay or cost overrun. Another important aspect is that based on
applied corrective action, what change has occurred in performance should be
visible i.e. the prediction model should be a time-dependent dynamic model.