Construction Risk Management

Last updated at: 30/03/2019 01:14 AM

Construction Risk Management

Construction Risk Management

Project management has been in existence since ages ago which is quite evident in the seven wonders of the world. Leaders in those times accomplished all without the present knowledge and understanding in project management as well as the tools available today. It quite a feat is worthy of the recognition it is given. However, the non-availability of adequate construction project Risk Management is what probably contributed to the delay and misuse of resources of various projects. Construction projects are complex and unique tasks just as the risks that come with them. Examples of the construction project are the construction of an estate, a skyscraper, a tunnel, a bridge, a multi-level office block, or other construction jobs. Sometimes risk-turned reality can abruptly terminate a project life cycle, or in many cases, some risks unchecked can ultimately end a project or sink the construction company if adequate care is not taken. Although, these combined risks are not always fatal individually it is necessary to have construction risk management in place if any construction company is to survive and grow in this more competitive world. The question to be answered now is the effective methods to ensure good construction risk management. The answer, though, is not far-fetched as it lies in the “good process.” These processes are easy to follow and help take the right decisions and actions. To mitigate any risk in construction management, five steps needed to keep it under control are explained below.

1. List the Potential Sources of Construction Risk

Managing construction risks starts with identifying and listing all the potential risk sources that could adversely affect the project in the long run. Note that the list ranges from small easy-to-get-to longer slow ones. The menu is but not limited to the following:

 Occupational and Financial risk: The technical aspect entails injuries, fatal or not, to a worker irrespective of the cause. On the other hand, financial risk deals with things like economic regression and an increase in construction materials supply prices.

Construction Risk Management

 Contractual and Project risk: Deals with the consequences faced for premature delivery, lack of proper project management, miscalculation of time and resources needed, and inadequate company policies. Other notable ones are Stakeholder risks, Natural risks, Competition.

2. Rank Construction Risks in Order of Importance

Risks are graded based on their level of significance to the project. Every construction company risk templates are not necessarily the same, as some could be peculiar to one company than the other. Therefore, the ranking of the list should not be limited to some other company because that is a risk on its own. Practical determination of risk’s importance to a construction project depends highly on its impact on the said project and the materializing probability of the risk.

3. Dealing with each Risk

Ways by which construction companies can satisfactorily deal with potential risks are:

 Avoiding the risk by refusing projects in disaster-prone areas.

 Transferring the risk on some risk bearers like insurance companies. A contractual agreement with some subcontractors is another way to move the risk.

 Mitigating the risk by putting in place all necessary safety equipment and training for all personnel.

 Accepting the inevitable ones and employing good project management to alleviate or circumvent it.

Construction Risk Management

4. Selection of appropriate resources to help manage risk effectively.

Variety of resource is required after transferring or accepting the risk to optimize the risk management choice. Some of them are:

 Cloud-based management software and tools

The right construction project management software can use for building design, project costing, overall project management and accounting making them more manageable and quicker to process. An excellent example of a cloud-based construction management platform is the CONSYSA. It has construction management tools that can help mitigate any risk before turning to reality.

 Training and Seminar

On-the-job training, webinar, seminars or conferences go a long way in equipping the trainee and workers in the specific use of materials and machines. Training sessions on safety can also be organized. Such training can also be used as a means of introducing new methods or techniques in the construction sector. Other factors are having the right financing, professional advice and being kept abreast of the latest technologies in the industry.

5. Get the Rest of the Organization Involved

Construction Risk Management is not a one-person endeavor as such. Everyone must be actively involved in contributing to better Risk management concerning their roles. Good communication about risk update and reviews amongst workers facilitates efficient construction risk management.

It should be noted though, that not all construction risks are adverse because some can be quite advantageous. For instance, when a quality job is done in any project, a second project is more likely to follow as the client is satisfied and trusts the project manager.

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