Risk Mitigation in Project Management
Due to the complexity of construction projects and the large number of unpredictable risks, it is vital that the construction firm takes steps to mitigate the risks that are within their control. Without proper risk mitigation, the construction firm will face project delays, incur costs, and may even face litigation. Currently, 24% of firm’s projects face delays, 19% go over budget, and 11% result in legal disputes that can cost $3 million on average.
Here are some ways that your subcontracting firm can mitigate risk in construction:
Risk mitigation should occur throughout the entire life cycle of a construction company. This means that risk mitigation should begin at the training and onboarding of new employees and should continue throughout the employee’s life with the company. This training should include preparing employees to properly assess risk and teaching them the steps they should take to mitigate it.
Culture of safety and risk management
For risk management to be a long-term sustainable strategy for the construction firm, it must be embedded into the culture of the company. To be successful, a culture of safety and risk management must be fully adopted by top management and communicated to the rest of the team.
Address risk early in the project
The earlier that risk is identified, and steps are taken to mitigate it, the less costly it will be and less likely it will be to affect the project schedule.
Constant communication throughout the project
The nature of the construction industry is that everything is constantly changing. Therefore, accurate and up-to-date information is vital. This information comes from constant communication between team members using mobile cloud-based construction solutions. This construction software allows everyone to be informed as information arises and changes are made that affect the project or its stakeholders.
Employ a thorough risk assessment and mitigation process
Despite a large number of construction companies reporting that they employ some form of risk mitigation practices, most construction professionals agree that less than half of the construction firms do employ a rigorous risk mitigation strategy. However, many industry professionals who have already adopted a risk mitigation process believe that the monetary savings from employing this process will be the driving factor for wider adoption. The leaders of risk mitigation processes employ rigorous risk assessment at the onset of any project and continue to assess and mitigate risk throughout the project life-cycle. This process may require continuous meetings to check in with all team members and ensure that risks are being assessed, communicated, and properly mitigated.
BIM technology can lower risk
BIM allows for issues to be worked out before actual construction, which eliminates unforeseen risk and also improves safety. 71% of surveyed construction professionals agree that BIM helps to mitigate risk. BIM encourages the team to be more extensive and detailed in their planning which helps to identify and mitigate risk. BIM also encourages collaboration and integration between team members for effective planning and risk mitigation.
Litigation is a time-consuming and costly process that must be prevented if possible. To take steps to avoid litigation, a construction firm must look into all potential partners and project team members and check their prior work experience for any litigation habits. Litigation can also be avoided by having a plan and protection technology in place should your firm come across a problem that cannot be solved by the project team.
Risk mitigation is necessary for controlling the cost, schedule, and scope of any project; It must be embedded in the company’s culture and occur throughout every project.