- Today, we're gonna talk about how project managers
can manage risk on construction projects.
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It will come as no surprise that there are literally
hundreds of construction risks that project managers
should consider when managing a project.
With heavy moving plant and equipment,
sub-contractors working at high complex logistics
and health and safety hazards,
it can all seem very daunting.
In most projects, resources are stretched to the limit,
and project managers struggle to consistently deliver
the necessary performance and control measures.
Just keeping projects moving, many companies aim
to control and manage construction risks
within a reasonable limit only,
which leaves so much to chance.
Regardless, a solid risk management strategy
is critical to the security of the client and the project.
So how does a project manager know
where to appropriately invest their time and resource
in order to minimize major construction risks
and control what often feels uncontrollable?
Given how difficult it is to control risk,
construction risk management plans and risk registers
are one solution that can help the project manager
to manage large risks.
If implemented throughout the life of a project,
with the right risk management plan and proactive team,
formulating a comprehensive risk register can help you
better manage the entire end to end project life cycle.
So what are the common construction risks
that the project manager should consider?
One, finance.
Although exceeding budget on projects has become
an industry-wide norm, financial issues
are primarily a result of bad planning and coordination.
We all know how large projects can easily go
from hundreds of thousands and even millions over budget.
Regardless, if a project experiences just a budget excess
of a small percentage, this could affect
not only the client's future liquidity
but also risks not being able to pay
subcontractors for their hard work
and ultimately, see the project come to a standstill.
Two, programming.
In the construction industry,
the phrase "time is money" can mean a whole lot of it.
Undeniably, poor programming
can have a devastating impact on budget.
Just one small miscommunication or mistake in a report
could set the program back by days, weeks,
or even months due to the needs like rework
and revisiting for sub-contractors,
not to mention creating large cost overruns.
Even a small delay can have a project-wide impact
that can completely change the original project program.
This means the project manager must change the master plan,
which inevitably leads
to more miscommunications or mistakes.
Three, design.
Design management during construction is a growing risk
that must be carefully managed.
When push comes to shove, a project team may decide
to accept an unfinished design that is good enough
to build just so construction can start on time.
The project team will then back manage this risk
by working to get the design caught up during construction.
This scenario is increasingly more common
in today's construction industry
where speed to start construction
is a primary requests from clients.
Often, construction risks related to design
can be better managed starting
in the pre-construction planning phase
when the client, project manager, designers
and contractors can align more closely.
And four, safety.
Sub-contractors at work is crucial
to the delivery of the work on site.
And yet, they are also subject to safety hazards
as many of the tasks assigned to them can be dangerous.
While sub-contractors could be skilled and experienced,
accidents do happen.
But project managers, knowing the safety risks
to the workforce, what has, let's say, may fall victim to
and creating a safety plan ensures employee safety.
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The process of mitigating risk for a construction project
is no different to any other project.
The only difference is the type of risks
the project manager will be managing
on a construction project.
There are five steps of the risk management process,
which the project manager will be responsible for.
Number one, identification.
Two, assessment.
Three, mitigation.
Four, monitoring.
And five, reporting.
Construction risk management involves
a lot of monitoring and tracking.
To properly control risk, as mentioned earlier,
the project manager will need a risk management plan
and a risk register to the provide necessary insights
on the process and progress of managing risk.
Successful project managers recognize
that risk management is important
because achieving a project's goal
depends on planning, preparation, results and evaluation
that contribute to achieving strategic goals.
I hope you found value in this video.
If you have any questions, please feel free to contact us.
And we really look forward to hearing from you.
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