The Department of Trade and Industry Key Performance Indicators: A critical appraisal

The Department of Trade and Industry Key Performance Indicators (DTI KPIs) provide the performance measurement framework most widely used by the UK construction industry. By 2003 the DTI KPIs had been used on construction contracts with a combined value in excess of £6 bn. Despite a growing number of construction projects using the DTI KPIs there has been little literature investigating the accuracy or reliability of them. This thesis investigates and evaluates the DTI KPIs in a more detailed and rigorous manner than previously attempted.

The literature also identified a plethora of alternative selection and procurement methodologies claiming to deliver performance improvement but with no universally accepted approach to measuring the performance improvement each method claims to deliver. Furthermore, performance measurement literature stated the need for, but lack of, an aggregate scoring method facilitating quantitative comparison of overall project performance.

The research methodology of this research uses a detailed case study approach to evaluate the performance of a construction project with data collected throughout the entire project delivery process, resulting in the creation of an overall performance matrix. In addition to this matrix the project team completed a questionnaire on a monthly basis. These two established forms of performance measurement allowed comparison with DTI KPI results and evaluation of the reactive rather than proactive nature of the indicators.

A methodology was developed that calculated an aggregate project performance score by measuring radar chart surface area. This Surface Measurement of Performance (SMOP) approach was used to establish the sensitivity of the DTI KPIs which was found to be between +/-5% and +/-10%. The SMOP programme allowed validation of the findings from the case study and also made quantitative project performance comparison possible.

Investigation of the method in which the DTI KPIs are calculated showed several areas in need of review. The role of the benchmark conversion curves are investigated, in particular the method of calculation of the predictability scores and the inclusion of indicators that reflect project performance and those that reflect company performance without distinction. The segregation of design and construction performance by the DTI KPIs is considered, as is the predictive and reactive natures of the indicators used.

Recommendations are made in the thesis that address many of the above issues and conclusions are drawn on the potential for development of the DTI KPIs from a construction project 'post mortem' into a genuine performance management tool.