Risk is a constant factor when it comes to construction project management since it involves a number of variables, such as unpredictable weather events, supply chain disruption, possible labor shortages combined with unexpected global economic and geopolitical events. As a result of adopting the ad hoc approach towards project risk management (because of components like project schedules and delivery timelines), risks are often identified too late in the game. Hence, it leaves less time and fewer resources for remediation.
However, organizations managing construction projects have started incorporating more robust risk management practices with minimal disruption to business processes. It allows companies to prioritize the development of comprehensive value delivery and make it capable of quick adaptation to changing market conditions. These strategies are not limited to the project level but also the program level, which means focusing on a group of interconnected projects that complement and build on each other and lead to long-term goals.
The ideal way to go about scheduling risk management is to identify risk early and evaluate often. Some of the steps to better schedule risk management:
Identify The Risks
At the beginning of any project, management teams are supposed to identify any potential risks and take precautionary measures accordingly. However, these risks are often overlooked but can be classified as either risks or opportunities. For instance, weather conditions could delay the construction or accelerate the schedule. In any case, predicting certain risks can help prepare the team member for future uncertainties.
In addition to identifying risks, the team needs to determine the likelihood of the occurrence of each risk along with their potential impact on schedules as well as costs. Many firms use the Monte Carlo method, which is a mathematical technique applied to estimate the possible outcomes of uncertain events. However, this approach is not useful for large and complex projects with a huge number of data points, such as calendars, resources, and relationships between them.
Determine a Response Strategy
After listing all the risks associated with the project, the team members should move forward to determine specific actions to mitigate the highest priority risks. Although there are certain risks that cannot be avoided, the knowledge of them can lessen the impact on the project as a whole. This process requires the assessment of uncertain scenarios as well as identifying the cost/benefit of possible risk mitigation strategies.
Communicate For Visibility
Once the team has identified the risks and devised mitigation strategies, this information needs to be communicated to key stakeholders. The process acts as an opportunity to exhibit a driven approach while keeping most project risks under control. Such communication serves as a channel for discussions around important subject matters.
Explore more on the better construction schedule risk management at the Realty 2.0 Conference. It offers a platform for construction experts and decision-makers to liaise with potential clients while gaining some actionable insights on building better projects and workflow management capabilities.