Download - Constructing Excellence

UK Construction Industry
Key Performance Indicators
Economic KPIs
Methods of Measurement
In Partnership with
2006
Based on Projects Completed in 2005

IMPORTANT NOTE:
This document gives the methods of measurement for use
with the 2006 UK Construction Industry Economic Key
Performance Indicators.
It should be used in conjunction with the 2006 UK Construction
Industry Key Performance Indicators Handbook and Economic
KPI Wallchart.
In Partnership with
Published by Constructing Excellence
ISBN: 1-905033-17-6
Construction Industry KPI Pack 2006/Housing KPI Toolkit 2006
Electronic Copy
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2006 UK Economic KPIs - All Construction - Methods of Measurement

UK ECONOMIC KPIs
METHODS OF MEASUREMENT
Page No
Key Performance Indicators
4 Client Satisfaction - Product
5 Client Satisfaction - Service
6 Defects
7 Predictability - Cost
-Project
- Design
- Construction
9 Predictability - Time
-Project
- Design
- Construction
11 Profitability
12 Productivity
13 Safety
14 Construction Cost
16 Construction Time
Appendix
19 KPI Data Collection Form
Further Help and Information
25 Constructing Excellence
2006 UK Economic KPIs - All Construction - Methods of Measurement

2
2006 UK Economic KPIs - All Construction - Methods of Measurement

This section contains the methods of measurement for the
following Key Performance Indicators (KPIs).
Client Satisfaction - Product
Client Satisfaction - Service
Defects
Predictability - Cost
Predictability -Time
Profitability
Productivity
Safety
Construction Cost
Construction Time
2006 UK Economic KPIs - All Construction - Methods of Measurement 3

CLIENT SATISFACTION -
PRODUCT
Purpose
To determine the overall level of client satisfaction with the completed product.
Definition
How satisfied the client was with the finished product/facility, using a 1 to 10 scale, where:
10 = Totally satisfied
8 = Mostly satisfied
5/6 = Neither satisfied nor dissatisfied
3 = Mostly dissatisfied
1 = Totally dissatisfied
Method
1 Carry out a survey on completion of the project to determine how satisfied the client was with
the finished product/facility using the 1 to 10 scale above.
2 The Client Satisfaction – Product performance is the client’s rating out of 10.
3 Measure the benchmark score by plotting the performance on the Client Satisfaction – Product
KPI graph.
Example
During a post-project review, the client scores satisfaction with the product at 8 out of 10. Using
the Client Satisfaction - Product graph, the performance score of 8 equates to a benchmark score
of 51%.
Note
This question may be asked as part of a more comprehensive survey or post-project review.
4
2006 UK Economic KPIs - All Construction - Methods of Measurement

CLIENT SATISFACTION -
SERVICE
Purpose
To determine the overall level of client satisfaction with the service of the consultants and main
contractor during the project.
Definition
How satisfied the client was with the service of the consultants and main contractor, using
a 1 to 10 scale, where:
10 = Totally satisfied
8 = Mostly satisfied
5/6 = Neither satisfied nor dissatisfied
3 = Mostly dissatisfied
1 = Totally dissatisfied
Method
1 Carry out a survey on completion of the project to determine how satisfied the client was with
the service of the consultants and main contractor using the 1 to 10 scale above.
2 The Client Satisfaction – Service performance is the client’s rating out of 10.
3 Measure the benchmark score by plotting the performance on the Client Satisfaction – Service
KPI graph.
Example
During a post-project review, the client scores satisfaction with the service of the consultants and
main contractor during the project at 6 out of 10. Using the Client Satisfaction - Service graph, the
performance score of 6 equates to a benchmark score of 12%.
Note
This question may be asked as part of a more comprehensive survey or post-project review.
2006 UK Economic KPIs - All Construction - Methods of Measurement 5

DEFECTS
Purpose
To assess the impact on the client of any defects at the point of handover.
Definition
The condition of the product/facility with respect to defects at the time of handover, using a 1 to 10
scale, where:
10 = Defect-free
8 = Some defects with no significant impact on client
5/6 = Some defects with some impact on client
3 = Major defects with major impact on client
1 = Totally defective
A defect is a fault which adversely affects the appearance or full intended function of the product.
Point of handover is the time when ownership of the product is transferred from the main contractor
to the commissioning client.
Method
1 Carry out a survey on completion of the project to determine the client’s assessment of the
condition of the facility with respect to defects using the 1 to 10 scale above.
2 The Defects performance is the client’s rating out of 10.
3 Measure the benchmark score by plotting the performance on the Defects KPI graph.
Example
During the inspection at the point of handover, a small number of minor defects are discovered
which can be corrected within the first month of use with minor disruption to the facility. The client
scores the project 7 out of 10. Using the Defects graph, the performance score of 7 equates to a
benchmark score of 23%.
Note
This question may be asked as part of a more comprehensive survey or post-project review
6
2006 UK Economic KPIs - All Construction - Methods of Measurement

PREDICTABILITY -
COST
Purpose
To measure the reliability of cost for a project.
Definition
There are three indicators for Predictability - Cost: project, design and construction:
1 Project: actual cost of the combined design and construction process at Available for Use (C)
less the anticipated cost of the combined design and construction process at Commit to
Invest (A), expressed as a percentage of the anticipated cost of the combined design and
construction process at Commit to Invest (A).
2 Design: actual cost of the design process at Available for Use (C) less the anticipated cost of
the design process at Commit to Invest (A), expressed as a percentage of the anticipated cost
of the design process at Commit to Invest (A).
3 Construction: actual cost of the construction process at Available for Use (C) less the
anticipated cost of the construction process at Commit to Construct (B), expressed as a
percentage of the anticipated cost of the construction process at Commit to Construct (B).
Further information on Key Project Stages A, B and C is given in the Handbook in Step 2: Collect Data.
Method
1 Collect the following data for the project:
• anticipated cost of the project at A
• anticipated cost of design at A
• anticipated cost of construction at B
• actual cost of the project at C
• actual cost of design at C
• actual cost of construction at C.
2 Calculate the Predictability – Cost performance, which is the percentage change between the
later and earlier cost, using the appropriate formula:
Performance (%) predictability cost: project =
Actual project cost at C – Anticipated project cost at A
Anticipated project cost at A
x 100
Performance (%) predictability cost: design =
Actual design cost at C – Anticipated design cost at A
Anticipated design cost at A
x 100
Performance (%) predictability cost: construction =
Actual construction cost at C – Anticipated construction cost at B
x 100
Anticipated construction cost at B
3 Measure the benchmark score by plotting the performance on the appropriate line of the
Predictability - Cost KPI graph
2006 UK Economic KPIs - All Construction - Methods of Measurement 7

PREDICTABILITY -
COST (contd.)
Example
Using the following data for a project:
Estimated cost of project at A
Final cost of project at C
= £3,800k
= £3,965k
Tendered cost of design at A = £500k
Final cost of design at C = £490k
Tendered cost of construction at B
Final cost of construction at C
= £3,400k
= £3,475k
Indicator 1
Predictability Cost: Project (A to C) performance =
£3,965k – £3,800k
£3,800k
x 100 = +4%
Using the Predictability - Cost (Project) graph to calculate a benchmark score, +4% equates to a
benchmark score of 40%.
Indicator 2
£490k – £500k
Predictability cost: design (A to C) performance =
x 100 = –2%
£500k
Using the Predictability - Cost (Design) graph to calculate a benchmark score, -2% equates to a
benchmark score of 79%.
Indicator 3
Predictability cost: construction (B to C) performance =
£3,475k – £3,400k
£3,400k
x 100 = +2%
Using the Predictability - Cost (Construction) graph to calculate a benchmark score, +2% equates to
a benchmark score of 42%.
Notes
The anticipated design cost and construction cost should, where possible be the amounts of the
respective accepted quotations/tenders, agreed target cost or agreed maximum price.
The actual design cost and construction cost should where possible be the amounts of the
respective final accounts.
If these are not available the best available estimate should be used.
Construction cost should include all work in the main contract and should only include site clearance
and enabling work when this is included in the main contract.
Those wishing to achieve on cost delivery as opposed to cost savings should use the above method
but calculate the benchmark score using the Variance Cost Graph contained in the Additional
Performance Indicators book in the KPI Pack.
8
2006 UK Economic KPIs - All Construction - Methods of Measurement

PREDICTABILITY -
TIME
Purpose
To measure the reliability of time for a project.
Definition
There are three indicators for Predictability - Time: project, design and construction:
1 Project: actual duration of the combined design and construction process at Available for Use
(C) less the anticipated duration of the combined design and construction process at Commit
to Invest (A), expressed as a percentage of the anticipated duration of the combined design
and construction process at Commit to Invest (A).
2 Design: actual duration of the design process at Commit to Construct (B) less the anticipated
duration of the design process at Commit to Invest (A), expressed as a percentage of the
anticipated duration of the design process at Commit to Invest (A).
3 Construction: actual duration of the construction process at Available for Use (C) less the
anticipated duration of the construction process at Commit to Construct (B), expressed as a
percentage of the anticipated duration of the construction process at Commit to Construct (B).
Further information on Key Project Stages A, B and C is given in the Handbook in Step 2: Collect Data.
Method
1 Collect the following data for the project:
• anticipated duration of the project at A
• anticipated duration of design at A
• anticipated duration of construction at B
• actual duration of design at B
• actual duration of the project at C
• actual duration of construction at C.
2 Calculate the Predictability – Time performance which is the percentage change between the
anticipated and actual duration, using the appropriate formula:
Performance (%) predictability time: project =
Actual project time at C – Anticipated project time at A
Anticipated project time at A
x 100
Performance (%) predictability time: design =
Actual design time at B – Anticipated design time at A
Anticipated design time at A
x 100
Performance (%) predictability time: construction =
Actual construction time at C – Anticipated construction time at B
Anticipated construction time at B
x 100
3 Measure the benchmark score by plotting the performance on the appropriate line of the
Predictability - Time KPI graph
2006 UK Economic KPIs - All Construction - Methods of Measurement 9

PREDICTABILITY -
TIME (contd.)
Example
Using the following data for a project:
Estimated project time at A
Actual project time at B
Design contract period at A
Actual design time at B
Construction contract period at B
Actual construction period at C
= 104 weeks
= 109 weeks
= 60 weeks
= 68 weeks
= 56 weeks
= 60 weeks
Indicator 1
109 weeks – 104 weeks
Predictability time: Project (A to C) performance =
x 100 = +5%
104 weeks
Using the Predictability - Time (Project) graph to calculate a benchmark score, +5% equates to a
benchmark score of 40%.
Indicator 2
68 weeks – 60 weeks
Predictability Time: Design (A to B) performance =
x 100 = +13%
60 weeks
Using the Predictability - Time (Design) graph to calculate a benchmark score, +13% equates to a
benchmark score of 33%.
Indicator 3
60 weeks – 56 weeks
Predictability Time: Construction (B to C) performance =
x 100 = +7%
56 weeks
Using the Predictability - Time (Construction) graph to calculate a benchmark score, +7% equates to
a benchmark score of 31%.
Notes
The anticipated design time and construction time should, where possible be the amount of time
stated in the respective accepted quotations/tenders.
The actual design time and construction time should where possible be the amount of time elapsed
between commence on site and completion of the project.
If these are not available the best estimate should be used.
Construction time should include all work in the main contract and should only include site clearance
and enabling work when this is included in the main contract.
Those wishing to achieve on time delivery as opposed to time savings should use the above method
but calculate the benchmark score using the Variance Time Graph contained in the Additional
Performance Indicators Book in the KPI Pack.
10
2006 UK Economic KPIs - All Construction - Methods of Measurement

PROFITABILITY
Purpose
To measure the profitability of a construction company before tax and interest.
Definition
Company profit before tax and interest as a percentage of sales.
Method
1 Collect the following information for a company for a complete year:
• value of profit before tax and interest
• value of sales.
2 Calculate the Profitability performance using the formula:
Performance (%) profitability =
Profit before tax and interest
Value of sales
x 100
3 Measure the benchmark score by plotting the performance on the Profitability KPI graph.
Example
Using the following data for a company:
Profit before tax and interest
= £2.10m
Value of sales = £30m
Profitability performance (%) =
£2.10m
£30m
x 100 = +7.0%
Using the Profitability graph to calculate a benchmark score, +7.0% equates to a benchmark score
of 47%.
Note
Organisations wishing to calculate profitability at a project rather than company level should refer to
the method given in the Handbook under Further Help and Information.
2006 UK Economic KPIs - All Construction - Methods of Measurement 11

PRODUCTIVITY
Purpose
To determine the value-added per employee of a construction company.
Definition
Company value added per employee per year (£).
Method
1 Collect the following information for a company for a complete year:
• value of sales
• total value of sub-contracted services
• total value of goods supplied
• the average number of full-time equivalent employees.
Two people each working half-time make one full-time equivalent employee.
2 Calculate the Productivity performance using the formula:
Performance (£) =
Value of sales in the year - total value of sub-contracted services - total value of goods supplied
Average number of full-time equivalent employees in the year
3 Measure the benchmark score by plotting the performance on the Productivity KPI graph.
Example
Using the following data for a company:
Value of sales in the year = £30m
Total value of sub-contracted services = £10m
Total value of goods supplied = £12m
Average number of full-time equivalent employees in the year = 280
£30m – £10m – £12m
Productivity performance = = £28,571
280
Using the Productivity graph to calculate a benchmark score, £28,571 equates to a benchmark score
of 33%.
Note
Organisations wishing to calculate Productivity at a project rather than company level should refer to
the method given in the Handbook under Further Help and Information.
12
2006 UK Economic KPIs - All Construction - Methods of Measurement

SAFETY
Purpose
To measure a company’s safety performance.
Definition
Reportable accidents per 100,000 employed by the company per year – the Accident Incidence
Rate (AIR).
Reportable accidents are defined by HSE as fatalities, major injuries, and over 3 day accidents to
employees, self-employed and members of the public.
Two people each working half time for the year are equivalent to one person employed.
Method
1 Collect the following data for the company for a complete year:
• the number of reportable accidents. On a properly managed site, details of all accidents will
be recorded in the accident book
• the average number employed by the company, including self-employed
and sub-contractors.
2 Calculate the Safety performance using the formula:
Performance (AIR) safety =
Number of reportable accidents in the year
Average number employed in the year including self-employed and sub-contractors
x 100,000
3 Measure the benchmark score by plotting the performance on the ‘All Companies’ or the
‘Companies with turnover greater than £10m’ line on the Safety KPI graph as appropriate.
Example
A company with an annual turnover greater than £10m collects the following data on its safety
performance:
Number of reportable accidents in the year = 5
Average number directly employed in the year = 72
Average number of sub-contractors employed in the year = 558
Safety performance (AIR) =
5
72 + 558
x 100,000 = 794
Using the ‘Companies with Turnover Greater than £10m’ line on the Safety graph to calculate
a benchmark score, the AIR of 794 equates to a benchmark score of 61%.
Notes
The Health and Safety Executive estimated that only 50% of reportable accidents are actually reported.
The Safety KPI graph has been adjusted to take account of this.
AIR makes no allowance for variations such as part-time work or overtime. Many organisations measure
accidents per 100,000 hours worked (the Accident Frequency Rate, or AFR), which takes into account
variations in working hours. A method of converting AIR to AFR is given in the Handbook under Further
Help and Information.
Companies wishing to calculate Safety at a project rather than company level should use the formula
given in the Handbook under Further Help and Information.
2006 UK Economic KPIs - All Construction - Methods of Measurement 13

CONSTRUCTION COST
Purpose
To measure the change in real cost of construction from one year to the next.
If two identical structures were built in successive years, the Construction Cost KPI shows how much
the construction costs have changed in the year.
It is unusual to have two identical structures, so data from similar projects has to be normalised to
enable comparison to be made. Normalisation is the statistical method of removing the effects of
specification, location, function, size and inflation.
Definition
The normalised construction cost of a project in the current year, less the construction cost of a
similar project one year earlier, expressed as a percentage of the construction cost of the similar
project one year earlier.
Method
There are two methods of measuring Construction Cost. Method 1 is a simple ‘rule of thumb’ which
may be used as a quick and approximate method. Method 2 is more complex, more reliable, and
most accurately follows the method used to produce the published KPI graphs.
Method 1
(‘rule of
thumb’)
The following ‘rule of thumb’ method of measurement may be used in place of the more complex
‘accurate method’ (Method 2). The tender price referred to below can be either for the whole facility
or can be a unit rate (e.g. cost per m 2 of the facility).
1 Collect the following data:
• tender price for the current project (TP1)
• tender price for comparison project (one year earlier) (TP2).
2 Calculate the following for the current project:
• the percentage adjustment for specification differences from the previous year’s
project (Spec %)
• the percentage adjustment for location difference from the previous year’s project (Loc %)
• the percentage adjustment for resource cost inflation since the previous year’s project (Inf %).
3 Calculate the Construction Cost performance using the formula:
(((TP1 +/- Spec %) +/- Loc %) +/- Inf %) – TP2
Performance (%) =
TP2
x 100
4 Measure the benchmark score by plotting the performance on the Construction Cost KPI graph.
Example
(Method 1)
Calculation of Construction Cost using data from two office building projects.
Current project:
Tender Price = £930/ m 2
Specification
Location
Resource Cost Inflation
= Calculated at 5% higher than comparison project
= Calculated at 8% higher than comparison project
= Calculated at 3% higher than comparison project
Comparison project (constructed a year earlier):
Tender Price = £805/ m 2
Construction Cost performance =
(((£930 – 5%) – 8%) – 3%) – £805
£805
x 100 = –2.0%
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2006 UK Economic KPIs - All Construction - Methods of Measurement

CONSTRUCTION COST (contd.)
Example
(Method 1)
(contd.)
Method 2
(accurate)
Using the Construction Cost graph to calculate a benchmark score, -2% equates to a benchmark
score of 53%.
1 Collect the following data for the both the current project and the comparison project
(one year earlier):
• project tender price index. This may be obtained from DTI or BCIS.
• the location factor (if applicable) from tables published by DTI or BCIS
• the resource cost index from tables published by DTI or BCIS
• the size factor (where available) from tables published by DTI or BCIS
The data needed to normalise a project is published quarterly by DTI and BCIS (see the Further
Help and Information section of the Handbook).
2 Calculate the capital cost index (CCI) for both projects using the formula:
Project Capital Cost Index =
(CCI)
Tender Price Index
Location Factor x Function Factor x Size Factor
x
100
Resource Cost Index
3 Calculate the Construction Cost performance using the formula:
Performance (%) construction cost =
Current Project CCI – Previous Project CCI
Previous Project CCI
x 100
4 Measure the benchmark score by plotting the performance on the Construction Cost KPI graph.
Example
(Method 2)
Calculation of a project Capital Cost Index for a £20m new build road construction project in the south
east of England (whose calculated tender price index is 110 in the first quarter of the current year) using
adjustment factors contained in the tables published in DTI’s Quarterly Building Price and Cost Indices:
Tender Price Index = 110 (calculated)
Location Factor = 1.09 (from Table 7.4)
Function Factor = 0.99 (from Table 8.2)
Size Factor = 0.92 (from Table 9.2)
Resource Cost Index = 108 (from Table 12.2)
Capital Cost Index =
110
1.09 x 0.99 x 0.92
x
100
108 = 103
If an equivalent calculation, carried out for a similar project in the previous year, had provided a Project
Capital Cost Index of 105, then the Construction Cost performance (change in real cost of construction)
between these two projects would be:
103 – 105
Construction Cost performance = x 100 = –1.9%
105
Using the Construction Cost graph to calculate a benchmark score, -1.9% equates to a benchmark
score of 53%.
2006 UK Economic KPIs - All Construction - Methods of Measurement
15

CONSTRUCTION TIME
Purpose
To measure the change in construction time from one year to the next.
If two identical structures were built in successive years, the Construction Time KPI shows how much
the construction times have changed in the year.
It is unusual to have two identical structures, so data from similar projects has to be normalised to
enable comparison to be made. Normalisation is the statistical method of removing the effects of
specification, location, function, size and inflation.
Definition
The normalised time to construct a project in the current year, less the time to construct a similar
project one year earlier, expressed as a percentage of the time to construct a similar project one
year earlier.
Method
There are two methods of measuring Construction Time. Method 1 is a simple ‘rule of thumb’ which
may be used as a quick and approximate method. Method 2 is more complex, more reliable, and most
accurately follows the method used to produce the published KPI graphs.
Method 1
(‘rule of
thumb’)
1 Collect the following data:
• contract period for the current project (CP1)
• contract period for the comparison project (one year earlier) (CP2).
2 Calculate the following for the current project:
• the percentage adjustment that needs to be made to time due to specification differences
from the previous year’s project (Spec %)
• the percentage adjustment that needs to be made to time due to the size difference from
the previous year’s project (Size %).
3 Calculate the Construction Time performance using the formula:
Performance (%) =
((CP1 +/- Spec %) +/- Size %) – CP2
CP2
x 100
4 Measure the benchmark score by plotting the performance on the Construction Time KPI graph.
Example
(Method 1)
Calculation of Construction Time using data from two office building projects.
Current project:
Contract period
Specification
Size
= 67 weeks
= Calculated at 8% higher than the comparison project
= Calculated at 10% smaller than the comparison project
Comparison project (constructed a year earlier):
Contract period
Construction Time performance =
= 71 weeks
((67 weeks – 8%) + 10%) – 71 weeks
71 weeks
x 100 = –4.5%
Using the Construction Time graph to calculate a benchmark score, -4.5% equates to a benchmark
score of 58%.
16
2006 UK Economic KPIs - All Construction - Methods of Measurement

CONSTRUCTION TIME (contd.)
Method 2
(accurate)
1 Collect the following data for the both the current project and the comparison project
(one year earlier):
• contract sum (CS)
• contract period (CP)
• the location factor (LF), if applicable, from tables published by DTI or BCIS
• the function factor (FF), if applicable, from tables published by DTI or BCIS
• the size factor (SF), where available, from tables published by DTI or BCIS
• project tender price index (TPI). This may be obtained from DTI or BCIS.
The data needed to normalise a project is published quarterly by DTI and BCIS (see the Further
Help and Information section of the Handbook).
2 Calculate the Construction Time Factor (CTF) for both projects using the formula:
CTF =
CP ÷
CS (£000s) 100
(
x
)
LF x FF x SF
3 Calculate the Construction Time performance using the formula:
TPI
Current Project CTF – Comparison Project CTF
Performance (%) = x 100
Comparison Project CTF
4 Measure the benchmark score by plotting the performance on the Construction Time KPI graph.
Example
(Method 2)
Calculation of a project Construction Time Factor for a new factory project built in the first quarter of
the current year in the south east of England using the tables published in DTI’s Quarterly Building
Price and Cost Indices:
Contract Period
= 15 months
Contract Sum
= £5,000k
Location Factor = 1.03 (from Table 2.4)
Function Factor = 1.00 (from Table 3.4)
Size Factor
= Not applicable
Tender Price Index = 108 (from Table 1.3)
( )
5,000 100
Construction Time Factor = 15 ÷ x = 0.00334
1.03 x 1.00 x NA 108
If a similar calculation, carried out for an equivalent project in the previous year, had provided a
Construction Time Factor 0.00347, then the Construction Time performance (change in time for
construction) between these two projects would be:
0.00334 – 0.00347
Construction Time performance = x 100 = –3.7%
0.00347
Using the Construction Time graph to calculate a benchmark score, -3.7% equates to a benchmark
score of 44%.
2006 UK Economic KPIs - All Construction - Methods of Measurement 17

18
2006 UK Economic KPIs - All Construction - Methods of Measurement

ECONOMIC KPI
DATA COLLECTION FORM (Page 1 of 5)
Company/Project Name
Data collected by
Date
KPI Data Result
Client Satisfaction How satisfied was the client with the quality of the finished
– Product product, using a 1-10 scale:
Totally
dissatisfied
Mostly
dissatisfied
Neither satisfied
nor dissatisfied
Mostly
satisfied
Totally
satisfied
1 2 3 4 5 6 7 8 9 10
Client Satisfaction How satisfied was the client with the service provided by the
– Service consultants and main contractor, using a 1-10 scale:
Totally
dissatisfied
Mostly
dissatisfied
Neither satisfied
nor dissatisfied
Mostly
satisfied
Totally
satisfied
1 2 3 4 5 6 7 8 9 10
Defects
What was the condition of the facility with respect to defects at the
time of handover, using a 1-10 scale:
Totally
defective
Major defects,
major impact
on Client
Some defects, with
some impact
on Client
Some defects,
with no significant
impact on Client
Defect free
1 2 3 4 5 6 7 8 9 10
Predictability
What was the estimated cost of design and construction at Commit to Invest
– Cost (Project) (i.e. when the project was originally sanctioned)?
£______________________(A)
What was the final cost of design and construction at Available for Use?
£______________________(C)
Calculate
£C________ - £A________
£A________
x 100
+ –
%
2006 UK Economic KPIs - All Construction - Methods of Measurement 19

ECONOMIC KPI
DATA COLLECTION FORM (Page 2 of 5)
KPI Data Result
Predictability What was the estimated cost of design at Commit to Invest
– Cost (Design) (i.e. when the project was originally sanctioned)?
£______________________(A)
What was the final cost of design at Available for Use?
£______________________(C)
Calculate
£C________ - £A________
£A________
x 100
+ –
%
Predictability What was the estimated cost of construction at Commit to Construct
– Cost (e.g. the tender sum)?
(Construction)
£______________________(B)
What was the final cost of construction at Available for Use
(e.g. the contractor’s final account)?
£______________________(C)
Calculate
£C________ - £B________
£B________
x 100
+ –
%
Predictability What was the estimated duration of the design and construction at
– Time (Project) Commit to Invest (i.e. when the project was originally sanctioned)?
Weeks_________________(A)
What was the actual duration of the design and construction at
Available for Use?
Weeks_________________(C)
Calculate
C________ - A________
A________
x 100
+ –
%
Predictability What was the estimated duration of the design phase at Commit to
– Time (Design) Invest (i.e. when the project was originally sanctioned)?
Weeks_________________(A)
What was the actual duration of the design phase at Commit to
Construct (i.e. when construction actually commenced)?
Weeks_________________(B)
Calculate
B________ - A________
A________
x 100
+ –
%
20
2006 UK Economic KPIs - All Construction - Methods of Measurement

ECONOMIC KPI
DATA COLLECTION FORM (Page 3 of 5)
KPI Data Result
Predictability What was the estimated duration of the construction phase at
– Time Commit to Construct (e.g. the contract period)?
(Construction)
Weeks_________________(B)
What was the actual duration of the construction period Available
for Use?
Weeks_________________(C)
Calculate
C________ - B________
B________
x 100
+ –
%
Safety
(Accident
Incidence Rate)
How many reportable accidents have you had in the past year
(i.e. fatalities, major injuries, and over 3 day accidents to employees,
your sub-contractors and members of the public)?
Number________________(A)
What was the average number of full-time equivalent employees you
had in the year? (2 people each working half-time make 1 full-time
equivalent)
Number________________(B)
How many sub-contractors did you employ on average during the year?
Number________________(C)
Calculate
A________
B________ +C________
x 100,000
Productivity
What was the value of sales last year?
£________________(A)
What was the total value of sub-contracted services last year?
£________________(B)
What was the total value of goods supplied last year?
£________________(C)
What was the number of full-time equivalent employees last year?
£________________(D)
Calculate
£A_______ -£B_______ -£C_______
D_______
£
2006 UK Economic KPIs - All Construction - Methods of Measurement 21

ECONOMIC KPI
DATA COLLECTION FORM (Page 4 of 5)
KPI Data Result
Profitability
What was the profit before interest and tax last year?
£______________________(A)
What was the value of sales last year?
£______________________(B)
Calculate:
£A________
£B________
x 100
+ –
%
Construction Cost
The calculations for Construction Cost are complex – refer to the
Methods of Measurement.
Select a typical project completed a year ago. What was the
tender price?
£______________________(A)
Select a similar project completed recently. What was the tender price?
£______________________(B)
What adjustment needs to be applied to the most recent project to
allow for specification differences between them?
Plus/Minus___________%(C)
(Note: If specification this year is higher, the correction should be
minus to bring this year in line with last year).
What adjustment needs to be applied to allow for location
differences between them?
Plus/Minus___________%(D)
(Note: If location this year is more expensive, the correction should
be minus to bring this year in line with last year).
What adjustment needs to be made to allow for inflation between
them?
Plus/Minus___________%(E)
(Note: If inflation this year is higher, the correction should be minus
to bring this year in line with last year).
Calculate: (((B______ +C______) +D______) +E______) – A______
A______
x 100
+ –
%
22
2006 UK Economic KPIs - All Construction - Methods of Measurement

ECONOMIC KPI
DATA COLLECTION FORM (Page 5 of 5)
KPI Data Result
Construction Time
The calculations for Construction Time are complex – refer to the
Methods of Measurement.
Select a typical project completed a year ago. What was the
contract period?
______________________(A)
Select a similar project completed recently. What was the contract period?
£______________________(B)
What adjustment needs to be applied to the most recent project to
allow for specification differences between them?
Plus/Minus___________%(C)
(Note: If specification this year is higher, the correction should be
minus to bring this year in line with last year).
What adjustment needs to be applied to allow for location
differences between them?
Plus/Minus___________%(D)
(Note: If inflation this year is higher, the correction should be minus
to bring this year in line with last year).
Calculate: (((B______ +/-C)______+/-D)______) – A______
A______
x 100%
+ –
%
Now you have obtained your performance results, calculate your
benchmark scores and plot a radar chart.
2006 UK Economic KPIs - All Construction - Methods of Measurement 23

24
2006 UK Economic KPIs - All Construction - Methods of Measurement

CONSTRUCTING EXCELLENCE
Constructing Excellence provides a range of services to help implement KPIs:
Helpdesk
A direct point of contact to answer initial enquiries
about KPIs. Tel 0845 605 55 56
The KPI Pack
A source of comprehensive information for
organisations wishing to use KPIs.
The Housing KPI Toolkit
Vital information for using KPIs in the housing sector.
KPIZone
A website dedicated to KPIs. Visit www.kpizone.com
for free information on KPIs and benchmarking clubs.
KPIZone also has a subscription service from which you
can download the information contained in the KPI Pack
and Housing KPI Toolkit.
KPI Masterclasses
An introduction to the benefits and use of the
Construction Industry KPIs. Each Masterclass
explores the importance of measuring performance
with the help of practical examples, a step by step
guide to their use, and presentations by organisations
that have successfully implemented KPIs.
Website
An extensive database of best practice activities,
information and resources is available on
www.constructingexcellence.org.uk .
At Constructing Excellence we bring distinctive value to our customers’ businesses
through six core activities:
Innovation and Research:
Members shape and take part in Constructing
Excellence’s research programme, from major action
research projects to working groups and confidential
learning clubs.
Measurement and Diagnostics:
Constructing Excellence has led the way in industry
performance measurement, with diagnostic tools
central to its activities. Members receive:
• Complimentary KPI pack
• Complimentary introductory Explorer
Interactive TM business diagnostic session
• 20% discount on KPI Masterclasses.
Tailored Services for Business
Improvement:
Constructing Excellence is able to offer members
consultancy tailored to their business requirements. This
service includes free or discounted access to Constructing
Excellence publications, and discounts on facilitation and
mentoring services and conferences.
Business-to-Business Networks:
Existing members see real benefits in these networks,
meeting with other like minded individuals and
companies, building relationships, sharing best practice
and developing business contacts.
Showcasing and Exemplars:
One of the key benefits of membership is being able to
demonstrate participation to key stakeholders such as
customers, employees, suppliers and investors.
Constructing Excellence provides members:
• Opportunities to showcase projects
• Opportunities to share and learn from
members’ exemplars
• Invitations to speak as an acknowledged industry
leader at Constructing Excellence events.
Leadership and Influence:
Constructing Excellence works closely with government,
strategic partners, firms and influencer organisations to
shape the future of the sector. Members have the chance
to take an active role in influencing Government priorities
and to have input into the formation of future policy at
regular forums and conferences.
CONSTRUCTING EXCELLENCE
Warwick House, 25 Buckingham Palace Road, London, SW1W 0PP
0845 605 55 56
(calls charged at local rate)
email: helpdesk@constructingexcellence.org.uk
www.constructingexcellence.org.uk
2006 UK Economic KPIs - All Construction - Methods of Measurement 25

CONSTRUCTING EXCELLENCE
Warwick House
25 Buckingham Palace Road
London
SW1W 0PP
Tel: 0845 605 55 56
Fax: 020 7592 1101
E-mail: helpdesk@constructingexcellence.org.uk
Website: www.constructingexcellence.org.uk
In Partnership with
Published by Constructing Excellence
ISBN: 1-905033-17-6
Construction Industry KPI Pack 2006/Housing KPI Toolkit 2006
Electronic Copy