Blockchain-enabled cost management for construction projects

Thesis Abstract

The escalating complexity of construction projects and the inherent opacity of cost management processes undermine accuracy, timeliness, and stakeholder trust, leading to cost overruns and inefficient procurement practices. This study investigates the potential of blockchain-based cost management systems to enhance transparency, traceability, and efficiency in construction projects by integrating smart contracts, immutable ledgers, and tokenized payments into traditional cost management workflows. The aim is to develop and empirically validate a blockchain-enabled framework that improves cost estimation accuracy, change management, and payments integrity across the project lifecycle. Specific objectives include (1) mapping current cost management practices and identifying pain points amenable to blockchain intervention; (2) designing a blockchain-enabled cost management framework incorporating smart contracts for change orders, subcontractor payments, and budget reconciliation; (3) evaluating the framework’s impact on estimation accuracy, payment cycle time, and dispute frequency; (4) examining user acceptance and organizational readiness among clients, contractors, and consultants; and (5) articulating governance and risk considerations for practical deployment. A mixed-methods approach is employed. The quantitative strand uses a quasi-experimental design with two comparable construction projects (n=2) implemented over 18 months, involving 120 cost management records per project and 45 stakeholder respondents. Data collection instruments include a structured cost management performance dashboard, a blockchain transaction dataset, and a standardized survey measuring perceived accuracy, timeliness, and trust. Regression analysis and difference-in-differences techniques are applied to assess changes in estimation error, payment processing time, and dispute incidence before and after framework adoption. The qualitative strand adopts a pragmatic paradigm and concerns itself with user experience and organizational impact through 20 semi-structured interviews with project managers, quantity surveyors, procurement officers, and contractors, complemented by 6 focus groups. Thematic analysis is conducted to identify enablers and barriers to adoption, with coding anchored in the Technology-Organization-Environment (TOE) framework and the Diffusion of Innovations (DOI) theory. Validity and reliability are ensured via triangulation, member checking, and inter-coder reliability tests (Cohen’s kappa > 0.70). The anticipated findings indicate that blockchain-enabled cost management reduces estimation variance by 12–18%, shortens payment cycles by 25–40%, and decreases change-order disputes by 30–45% relative to conventional practices. The study is expected to reveal significant improvements in real-time visibility of costs, enhanced auditability of procurement transactions, and higher stakeholder confidence in payment integrity. However, challenges related to initial investment, interoperability with legacy systems, and the need for standardized contract templates for smart contracts are anticipated. The research contributes to knowledge by integrating blockchain technology with quantity surveying practices to create a coherent, auditable, and automated cost management process, expanding the empirical evidence on the performance effects of blockchain in the construction sector. It extends the literature on digitalizing cost management by providing a pragmatic framework, implementation considerations, and governance mechanisms that address technical, organizational, and regulatory dimensions. The main conclusion posits that a carefully designed blockchain-enabled cost management framework can significantly improve cost control, transparency, and operational efficiency in construction projects, provided there is alignment among project governance, digital literacy, and interoperability standards. Recommendations include developing sector-wide standards for smart-contract templates, creating initial-phase pilot programs with clearly defined scope and performance metrics, investing in interoperability layers to integrate with existing ERP and BIM systems, and fostering organizational change management to cultivate stakeholder buy-in. Policy implications suggest that industry bodies should promote ethical and transparent data governance practices and establish a regulatory sandbox to test blockchain-enabled procurement processes under real-world conditions.