External change in large engineering design projects: The role of the client

A problem facing the management of large engineering design projects is: Why do clients often adopt an early commitment strategy on design decision-making when they want to speed up project delivery, yet allow late changes to the project definition to accommodate the resolution of (un)foreseen external uncertainties? Empirical findings illustrate this problem and underpin a 2-stage model of the concept development process, in which conceptualization is followed by design, and stochastic pre-emption simulates asymmetric changes. Simulation experiments demonstrate that when clients make commitments early on in conditions of high uncertainty, they increase the likelihood (upside risk) of speeding up delivery if external events do not materialize; however, if these events do materialize, they increase the likelihood (downside risk) of causing design rework and losing process predictability - especially when the ability to reuse design work after a change is limited. We show that moderate design postponement is appropriate if clients relinquish some of the upside risk of finishing the design sooner. Moderate design postponement does not increase the downside risk of overrunning the delivery completion date in relation to the risk clients incur when they commit earlier because it reduces expected variability in design. These insights highlight the client's role in foreseeing external uncertainties and judiciously instructing changes to design teams. They also demonstrate the applicability of postponement to large engineering design projects where external uncertainty emerges as a fundamental contingency. © 2006 IEEE.