A structural equation model for enhancing effectiveness of engineering, procurement and construction (EPC) major projects

Purpose

The purpose of this paper is to define and analyze causal factors shaping the effectiveness of engineering, procurement and construction (EPC) major projects in meeting the product objectives, from the end-user’s perspective.

Design/methodology/approach

An online survey questionnaire was developed and administered to end-users working in major oil and gas projects. Data collection process was initiated on, around 275 end-users, and 213 responses were received, achieving a high response rate of 77 percent.

Findings

The results indicate that both alignment of objectives and end-user’s engagement factors exhibit a positive influence on effectiveness of EPC, with the former having higher contribution than the latter. In this context, the product success triangle reveals higher preference of the end-user’s team toward quality than schedule and cost objectives.

Research limitations/implications

Shifting the efforts of involving the end-user forward in time, starting from the planning stage, alleviates the adverse impacts of design changes as well as increases the ability to save cost, improve performance and increase end-user’s satisfaction.

Practical implications

The model raises the awareness of oil and gas industry practitioners toward the critical factors influencing the project effectiveness and proposes useful techniques for maintaining proper alignment between project and product objectives as well as facilitating end-user’s engagement at the site level. As such, it can serve as a motivation tool for aligning the objectives and acknowledging the engagement, with the aim of achieving the product success.

Originality/value

The effectiveness of EPC structural model was developed and tested using PLS–structural equation modeling statistical technique. The interpretation of the structural model demonstrated that both end-user’s engagement and alignment of objectives are essential to successfully achieve project effectiveness.