DIGITAL TRANSFORMATION AND ADAPTIVE CONTROL MECHANISMS FOR IMPROVED EPC PROJECT PERFORMANCE: A STRUCTURAL EQUATION MODELING APPROACH
Engineering, Procurement, and Construction (EPC) projects operate in highly complex and uncertain environments, frequently experiencing delays, cost overruns, and quality issues. While digital transformation offers strategic opportunities to address these challenges, digitalization alone does not guarantee superior project outcomes without appropriate adaptive control mechanisms. This study examines the relationship between digitalization capabilities, Adaptive Performance-Based Management Control Systems (APBMCS), and project performance in EPC projects. Using a quantitative approach with Structural Equation Modeling (SEM), data were collected from 140 EPC professionals through structured questionnaires. The results demonstrate that digitalization capabilities have a strong and significant positive effect on APBMCS (β = 0.830, p < 0.001), while APBMCS significantly influences project performance (β = 0.362, p = 0.028). The mediation analysis confirms that APBMCS partially mediates the relationship between digitalization capabilities and project performance (β = 0.300, p = 0.030). These findings indicate that digital tools alone are insufficient to enhance project outcomes unless embedded within adaptive management frameworks. The study contributes to project management literature by empirically validating an integrated framework linking digital capabilities, adaptive control mechanisms, and performance outcomes. Practically, the results urge EPC organizations to prioritize investments not only in digital infrastructure but also in developing adaptive management capabilities to maximize project success in dynamic and uncertain environments.