How often have you been to that Lessons Learned meeting where the same complaints and issues get raised as in the last project? How can we break out of the cycle?
Risk Management is the process of identifying and voicing uncertainties and issues and analyzing risks to make business decisions. It is a verification process of those intuitions we have during a construction project. We should approach diligently in a structured matter. With regular reviews, Risk Management can be a powerful tool for business improvement.
Why do we overlook Risk Management?
We have risks, but as the projects move forward, there are so many other problems to take care of. When we get to the building process, there are bigger, more immediate concerns, and so uncertainties decrease in importance and get buried in the day-to-day. These uncertainties stay until they become on-site problems. Then the problems generally turn into changes, missing supplies, Change Orders, work stoppages, labor shortages, and other costly and time-consuming demands. Making sure to have a good Risk Management Process will help prevent these expensive problems.
The Risk Management Process
Identification – Identify the Risks – To help, take a second look at documents: Contract documents, IFC’s, Geo-Tech, Surveys, Suppliers, Subcontractors, Project plan, and Lessons learned from previous/similar projects.
Quantify – Assigning numbers to the risks that you have identified allows us to compare the risks and prioritize.
Response Planning – Develop Response Plans for each risk; the earlier you deal with the risks, the less effort (time and money) needed in mitigation. It’s easier to make alternate plans or modify the design early on in the process.
Monitoring and Control – Throughout the project life cycle and at every Project Management meeting, we review the Risk Management Plan. We identify any risks that have happened, that didn’t happen, and the ones that are no longer a concern; and we keep that information handy for future projects. Determine the severity of the risks, and if they do happen, put response plans in effect.
To minimize the work effort, recordkeeping, and tracking that is required, use one of the software tools that are available on the market. No one likes doing the administrative paperwork and a software tool will make the effort so much easier.
RiskMP will lead you through the risk identification process, quantification, and monitoring requirements.
Reports are simple to generate, its easy to read & easy to do a review at meetings, and simple to update.
At the end of a few projects, there is a fantastic database of risks on which to base your risk management plan on for future projects and your whole business improvement plans.
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Videos on these topics: Construction & Risk Management Series