Risk Management – A Primer

The term “project risk” can encompass an enormous range of issues:

Defined as anything that threatens or limits a project’s goals, objectives or deliverables, project risk includes:

Risk Identification

  • safety,
  • quality,
  • cost overruns,
  • excessive changes,
  • schedule overruns,
  • procurement problems,
  • contract issues,
  • labour issues,
  • communication issues (information is not available to the people who need it)
  • as well as all external sources of risk including
  • the weather
  • government regulations
  • client issues
  • consultants

The broad range of categories that entail risk, along with the sheer amount of work being performed on the average jobsite every day and the numbers of variables that come into play, mean that exposure to construction risk is a daily occurrence.

The good news is that many areas of risk can be anticipated and addressed, first by quantifying them, and then by proactively managing them. Quantifying risk involves systematically thinking about all possible consequences before they happen and then defining measures to accept, avoid or decrease the impact of the risk. Performed during the preconstruction phase, the analysis should be a detailed process that involves identifying margins of error and calculating probabilities of certain outcomes. After the project is under way, it is a project manager’s job to constantly track and report the status of all identified risks.

New job-site tools––especially project management software, which has a low barrier of entry for a large number of team members––are vital to the success of today’s risk management efforts.

 

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