The application of a computerized financ... [paper 2006/19]
ITcon Vol. 11, Special Issue Decision Support Systems for Infrastructure Management , pg. 257-268, http://www.itcon.org/2006/19
The application of a computerized financial control system for the decision support of target cost contracts
SUBMITTED: February 2005
Andy K.D. Wong, Dr.
SUMMARY: This paper reports a study of the application of a computerized financial control system on a target cost contract for the development of a cable car construction project in Hong Kong. The author is one of the key system designers supplied by the consultancy services of the Hong Kong Polytechnic University. The system emphasizes the enhancement of the integrity and effectiveness of decision-support and the information flow among the various construction parties for construction target cost contracts aided by a computerized construction integrated management system, equipped with intelligent database and data mining technology. Complex and capital-intensive construction projects usually involve higher risks. A partnering approach can be applied to such projects as a basis to bring about better project results. Partly as a result of rational risk sharing, target cost contracting can also be effective, where a fixed target cost is set based on given parameters at the outset. If this fixed target is exceeded or undercut, the outcome is split between the contracting parties in a pain/gain sharing fashion. An advantage of this approach lies in the incentive to the contractor to be efficient and to achieve savings. Target cost contracting has been globally recommended as an appropriate means of realizing high-risk construction projects. So as to satisfy the high transparency requirement in financial controls and the information demand for forward financial planning, a computerized integrated management system, with data mining and neural capability, is recommended to support decision making in target cost contracting.
KEYWORDS: contract administration, cost controls, data mining, decision support systems, digital neural network, Hong Kong construction industry, target cost contracting.
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Wong A K D (2006) The application of a computerized financial control system for the decision support of target cost contracts, ITcon Vol. 11, Special Issue Decision Support Systems for Infrastructure Management , pg. 257-268, http://www.itcon.org/2006/19