Risk Management In Construction

Risk Management is one of the most important, but often overlooked, activities to ensure the successful completion of a construction project. Without proper risk management, the project’s schedule, budgeting, and quality is at stake. A proper risk management process considers:

Risk Identification

Risk identification is the most important piece of risk management. This phase is critical in order to manage and complete the project successfully. It involves identifying all possible risks as well as the conditions giving rise to these risks. The earlier the risks are identified, the earlier the plan can be adjusted to reduce the effects of the potential risks.

Risk Assessment/Analysis

Once the risks in a project have been identified, further analysis is done through assessing and estimating the possibility of risk occurrence as well as the potential impact of each risk factor. To do so, consultants use available information, experience, and best practices to determine the frequency of risk occurrence and its level of consequences.

Risk Responses

Risk responses determine what action will be taken to address risks. It includes actions taken to avoid, mitigate or transfer a risk or its consequences. A risk response is determined by proposing several alternatives to eliminate or mitigate an anticipated risk and assign an optimum alternative as a response. It identifies and develops risk response options and determines actions for treating the risk and reducing any threats to projects objectives.

Risk Control

After risks have been identified, assessed, and appropriate responses have been developed, those findings are implemented. The risk plans are put into action, ensuring that they are being considered, accounted for, and reacted to. Risk control enhances projects by reducing risks, and controlling deviations from the project plan.

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