Operational Barriers against the Use of Smart Contracts in Construction Projects

Year 2023, Volume: 34 Issue: 5, 81 - 106, 01.09.2023

Handan Künkcü , Kerim Koc , Asli Pelin Gurgun , Houljakbe Houlteurbe Dagou

https://doi.org/10.18400/tjce.1322972

Cited By: 1

Abstract

As an emerging but embryonic way of contract administration, smart contracts can play a prominent role in managing construction projects in an effective manner. However, there are still some barriers preventing the implementation of them in the life cycles of construction projects. This study investigates operational barriers against the adoption of smart contracts in construction projects and explores the challenges in this process. Operational barriers against smart contract implementation are identified through a comprehensive literature review and a focus group discussion is performed to refine the identified barriers. These barriers are evaluated through fuzzy analytical hierarchy process analysis. Finally, a framework is proposed for the adoption of smart contracts effectively in construction projects. 20 operational barriers were attained based on four main barrier categories: technical, financial, security/technological, and time. The results show that financial and technical aspects establish the most significant categories hindering the adoption of smart contracts, while expensive and clunky drafting and registration process, and cost of upskilling are the most significant barriers. Overall, the proposed framework might be useful for practitioners and project managers, who decide to use smart contracts in managing construction projects. The motive behind understanding critical operational barriers is to assist construction practitioners in automating contract execution processes. This study provides a basis for recommending the necessary strategies for the use of smart contracts in the industry to researchers in the construction management field.

Keywords

Blockchain, operational risks, contract administration, construction management, Fuzzy AHP, Construction 4.0

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