Project alliance requires all parties to work together in good faith, share project risks, and make unanimous decisions for the betterment of the project. A key feature of successful implementation of a project alliance is a focus on value creation and value for money. This paper proposes a qualitative system dynamics model to specify and explain dynamics of value creation processes in the context of project alliance. By synthesizing the existing literature and reports on project alliancing, this paper identifies four processes that have a strong influence on the value created in the project alliance context: work progression, rework, redesign and innovation, and rescheduling. In addition, we show how these value creation processes are interrelated and evolve over time. The effectiveness of these processes is influenced by the capability and motivation of the project alliance partners to discover works that do not fully utilize the available resources, and make quick decisions to capture these benefits.

Introduction

Project management has traditionally focused on delivering outputs with a specific focus on delivering products on time, on budget, and of a defined quality, which is often articulated as adhering to the “iron triangle” (Andersen, 2008). There has been a shift from a sole focus on product creation to a holistic focus on both product and value creation (Winter et al., 2006a), and over the past few years, project scholars have paid more attention to value creation and the realization of benefits to justify the resources deployed in projects (MacDonald et al., 2012; Winter et al., 2006b). In short, value can be generally defined, as the result of a trade-off between benefits (“what you get”) and sacrifices (“what you give”) in the management of projects (Matinheikki et al., 2016). A project alliance is a collaborative project delivery form that relies on value for money thinking (MacDonald et al., 2013; Manley et al., 2009). In a project alliance, the key actors of a project (owner, designer, and contractor) bear both positive and negative risks related to the project jointly and follow principles of information accessibility and unanimous decisionmaking (Jefferies and Rowlinson, 2016; Lahdenperä, ۲۰۱۷). Much of the extant literature on project alliancing is positive in terms of the value-creating results that can be achieved (e.g., Hietajärvi et al., 2017a; Love et al., 2016).