Not all construction projects are created equal. Varying capital requirements, strategic significance, and a combination of external and internal resources create a unique environment. This variance is especially applicable on large complex projects, which require a highly customized, tailored approach to risk management in order to cater to the dozens of organizations and stakeholders involved.
Without sufficient risk planning, identification, analysis, and continual monitoring, any major project will likely experience significant challenges.
“Large construction projects are complex organisms, highly inherent of risk, and require intensive collaboration”
It is essential that the project team identify and manage all risks throughout each stage of the project life cycle. Some risks are within the project team’s direct control and influence, while others are wholly uncontrollable external factors.
Consider the following potentially unforeseen elements.
SCHEDULE RISK – Have you thoroughly reviewed all constraints that may impact the project schedule?
SCOPE RISK – Has the scope of the project been rigorously analyzed and tested?
COST RISK – Are the project financials being delivered with clarity and transparency?
SUPPLY CHAIN RISK – Are the value chains of all major products and suppliers being continually assessed and analyzed?
POLITICAL RISK – Will the project be subject to cancellation if or when legislation changes occur?
HUMAN RESOURCES RISK – Are there any other major capital projects planned within the region that may limit access to qualified personnel?
Taking the above indispensables into account, the project team should determine both the schedule and the cost impact of significant risks and opportunities documented within the risk register. The risk may be simulated to define the probability level as the worst case, best case, or most probable case through a quantitative risk analysis process. Typically, construction owners elect to reserve contingency based on a 70 to 90 percent confidence level.
Many complex projects often get bogged down by delays and poorly planned design and engineering processes. Hence the project team attempting to accelerate the procurement and construction phases, which is not always possible, especially with very tight project milestones. Additionally, any attempt to expedite the schedule beyond its optimal activity durations will result in additional labor, equipment, material, and contractor costs.
Consequently, it is impossible to successfully manage a major project by merely drawing on industry experience, following project management principles, and applying technology. The critical aspect of successful risk mitigation lies in identifying and defining every risk on the projects’ path in accordance with meticulous controls.
Bringing together the best minds and tools in the business, Abbott has the flexibility and capability to work with any desired approach or aspect of the project – resulting in accelerated progress, reduced risk, increased return, and improved performance. By uncovering unknown risks and challenges, we not only meet our client’s ever-changing needs – we drive them.
For Further Information Contact:
Managing Principal, Project & Program Manager