Innovative Payment Solutions in the Built Environment

A luxury private residence is being constructed on the Baja Peninsula in Mexico. To date, the contractor was paid informally for the project, but the client is now requiring formal progress payments, waivers, and specific insurances. 

How can the misalignment be fixed and ensure stakeholders continue to make forward progress on the project? 

That question was posed to Brian Chen (MPM '24), Mahaoqi Si (MPM '24), Wangqi Wu (MPM '24), and Zihan Zheng (MPM '24) for their capstone project in Northwestern Engineering's Master of Science in Project Management (MPM) program.

The scenario was one of several presented to teams in the program's two-course capstone sequence. Each situation was written by industry partners at Project Management Advisors, Inc. (PMA) and based on real-life projects PMA worked on. Each MPM team acted as consultants for PMA, taking the broad project management-related challenge from their given scenario, defining specific problems to tackle within it, researching potential solutions to overcome it, and creating a recommendation and poster presentation describing how to navigate it.

Students met with PMA representatives throughout the capstone to discuss progress and feedback.

"By investigating project management challenges that arise from a single case, but are applicable to other projects, students gain industry-relevant knowledge," said full-time lecturer Paul Beilstein, who co-teaches the capstone class and drives the design of its curriculum. "Perhaps more importantly, though, they begin to understand that research is a lifelong practice of project managers. In their careers, our students will routinely work on projects that require them to learn more about their industry. In the capstone course, we practice research methods that might help them navigate those situations."

The students who focused on the luxury residence project in Baja needed to reconcile the informal payment practices with the new formal requirements in a way that enabled continuous progress on the project. The team broke down its challenge to understand how the entire system might react to and be affected by the change by relying on the Project Management Institute’s (PMI’s) eight project performance domains: stakeholders, team, development approach and lifecycle, planning, project work, delivery, measurement, and uncertainty.

After developing that understanding, the team members were tasked with proposing solutions. They researched various payment solutions – including written contracts, escrow services, blockchain platforms, and intermediary institutions – and theorized the potential impacts of deploying them.

"The intersection of traditional construction practices with modern financial management intrigued me," Si said. "The challenge of integrating innovative payment solutions to enhance transparency, security, and compliance in a complex construction environment was particularly compelling."

Ultimately, Si and her teammates chose to prioritize using escrow services and intermediary institutions to initially secure and formalize payments. The team posited that this method would combine the strengths of traditional and modern payment solutions while providing immediate security and compliance benefits.

Anticipating that this method could help to establish mutual trust among project stakeholders, Si and her teammates went on to suggest blockchain-based methods to enhance transparency and automation in the payment process.

Beilstein was impressed with their recommendations.

"The team produced high-quality deliverables," he said. "Their research was focused and led to acute insights about the project management challenge they were assigned to investigate."

The team was successful with its outcomes despite challenges throughout the project. The recent adoption of blockchain meant it was difficult to gather reliable data about its efficacy in the construction industry. Si and her teammates also had to reconcile diverse payment practices so their proposed solutions complied with local and international regulatory standards.

The MPM capstone course is designed to help students see the role ethics, knowledge management, project management, oral communication, research competency, teamwork, and written communication play within the built environment sector. Students presented their final recommendations at the Blueprints Poster Fair, an on-campus event attended by industry professionals from across the built environment sector. 

"Ultimately, this course seeks to capitalize on the range of skills and knowledge students have been acquiring throughout their time in the program," Beilstein said. "It aims to give students relevant experience in addressing project management challenges and the tools necessary to continue learning about their industry once they enter the professional ranks."

Si said the tangible impact was clear. 

"This type of research project and presentation is valuable because it bridges academic knowledge and real-world application," she said. "It helps MPM students develop critical thinking, problem-solving, and communication skills, all of which are essential for successful project management careers."