Including Risk Management in Construction Projects - Revision history

Tkokotas at 14:02, 18 December 2018

2018-12-18T14:02:53Z

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			''Developed by Romain Clouzeau''


	'''Introduction'''		'''Introduction'''

Tkokotas at 13:25, 23 November 2018

2018-11-23T13:25:57Z

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	==References==		==References==
	<references/>		<references/>

			[[Category:Project Management]][[Category:Uncertaity]][[Category:Risk]][[Category:Risk Management]][[Category:Construction Industry]]

Romain Clouzeau: /* Implementing a Risk management process in a project */

2016-09-23T06:55:56Z

Implementing a Risk management process in a project

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	=='''Implementing a Risk management process in a project'''==		=='''Implementing a Risk management process in a project'''==

	The following part will illustrate the previous points by presenting an example of the implementation of a risk management process. Consider a project for which the company wants to use risk management techniques, for example due to its high importance and sensibility.		The following part will illustrate the previous points by presenting an example of the implementation of a risk management process.<ref>http://www.stakeholdermap.com/risk/risk-management-construction.html A table summarizing the different phases of the Risk management process is available under the Risk Assessments part </ref> Consider a project for which the company wants to use risk management techniques, for example due to its high importance and sensibility.

	===Risk Analysis===		===Risk Analysis===

Romain Clouzeau: /* Semi-Qualitative methods */

2016-09-23T06:54:00Z

Semi-Qualitative methods

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	• [https://en.wikipedia.org/wiki/Decision_tree Decision tree analysis ]. This tool is mostly used as a forecast process, to be able to determine in advance the consequences of a change in the Construction project (mainly during the building phase on site). It may be completed with a [https://en.wikipedia.org/wiki/Multiple-criteria_decision_analysis MCDA] (or Multi Criteria Decision Analysis) which allows to find out the best solution using objective and transparent criteria. This tool is mostly useful as a complement of a previous risk analysis, in case of a change of plan, to determine the change's consequences on the project and the possible risks it may create.		• [https://en.wikipedia.org/wiki/Decision_tree Decision tree analysis ]. This tool is mostly used as a forecast process, to be able to determine in advance the consequences of a change in the Construction project (mainly during the building phase on site). It may be completed with a [https://en.wikipedia.org/wiki/Multiple-criteria_decision_analysis MCDA] (or Multi Criteria Decision Analysis) which allows to find out the best solution using objective and transparent criteria. This tool is mostly useful as a complement of a previous risk analysis, in case of a change of plan, to determine the change's consequences on the project and the possible risks it may create.

	• Risk index. This is mainly the consequence of the risk identification process. It lists all the risk determine and ranks them using some normalized scale.		• Risk index. This is mainly the consequence of the risk identification process. It lists all the risk determine and ranks them using some normalized scale. It may take the form of an individual document for each risk like '''Figure 6''', all the document being put together to create the index.

	• [https://en.wikipedia.org/wiki/Risk_matrix Risk matrix]. This tool is very useful when assessing the risk as it allows a visual representation of the consequence and the probability of the risk, and therefore its acceptance or not. A risk matrix may for example be built through the FSE (Fuzzy synthetic evaluation), which uses some qualitative and quantitative criteria to assess the risks identified beforehand.		• [https://en.wikipedia.org/wiki/Risk_matrix Risk matrix]. This tool is very useful when assessing the risk as it allows a visual representation of the consequence and the probability of the risk, and therefore its acceptance or not. A risk matrix may for example be built through the FSE (Fuzzy synthetic evaluation), which uses some qualitative and quantitative criteria to assess the risks identified beforehand.

Romain Clouzeau: /* Semi-Qualitative methods */

2016-09-23T06:52:19Z

Semi-Qualitative methods

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	• Cause-consequence analysis. It combines a [http://apppm.man.dtu.dk/index.php/Fault_tree_analysis FTA] (fault-tree analysis) and an [https://en.wikipedia.org/wiki/Event_tree_analysis ETA] (event-tree analysis) to determine the possible paths leading to a specific event. It may be used to determine the probability of an event and as such may prove useful to mitigate the risks linked to this event. It may lead to a bow-tie representation of the result, with the event central, the causes on the left and the consequences on the right, for a better visual comprehension of the study. This is really useful to use in case of an accident or incident to determine the errors and learn from them. However, it's quite time consumming like the scenario-analysis and as such can not really be applied to a whole project, but mostly to the major tasks.		• Cause-consequence analysis. It combines a [http://apppm.man.dtu.dk/index.php/Fault_tree_analysis FTA] (fault-tree analysis) and an [https://en.wikipedia.org/wiki/Event_tree_analysis ETA] (event-tree analysis) to determine the possible paths leading to a specific event. It may be used to determine the probability of an event and as such may prove useful to mitigate the risks linked to this event. It may lead to a bow-tie representation of the result, with the event central, the causes on the left and the consequences on the right, for a better visual comprehension of the study. This is really useful to use in case of an accident or incident to determine the errors and learn from them. However, it's quite time consumming like the scenario-analysis and as such can not really be applied to a whole project, but mostly to the major tasks.

	• [https://en.wikipedia.org/wiki/Hazard_and_operability_study HAZOP] (Hazard and operability study). Its main goal is to study a given activity to determine the involved risks. May prove useful during the risk identification process to list all the risk linked to a phase of the project. Like the FMEA method, this is one of the most powerful hazard identification tool as it provides a good and as exhaustive risk overview as possible. As such it should be applied at least on the major tasks of the project, if not on the whole project.		• [https://en.wikipedia.org/wiki/Hazard_and_operability_study HAZOP] (Hazard and operability study). Its main goal is to study a given activity to determine the involved risks. May prove useful during the risk identification process to list all the risk linked to a phase of the project. Like the FMEA method, this is one of the most powerful hazard identification tool as it provides a good and as exhaustive risk overview as possible. As such it should be applied at least on the major tasks of the project, if not on the whole project, depending on the commitment of the company in the risk management process.

	• [https://en.wikipedia.org/wiki/Decision_tree Decision tree analysis ]. This tool is mostly used as a forecast process, to be able to determine in advance the consequences of a change in the Construction project (mainly during the building phase on site). It may be completed with a [https://en.wikipedia.org/wiki/Multiple-criteria_decision_analysis MCDA] (or Multi Criteria Decision Analysis) which allows to find out the best solution using objective and transparent criteria. This tool is mostly useful as a complement of a previous risk analysis, in case of a change of plan, to determine the change's consequences on the project and the possible risks it may create.		• [https://en.wikipedia.org/wiki/Decision_tree Decision tree analysis ]. This tool is mostly used as a forecast process, to be able to determine in advance the consequences of a change in the Construction project (mainly during the building phase on site). It may be completed with a [https://en.wikipedia.org/wiki/Multiple-criteria_decision_analysis MCDA] (or Multi Criteria Decision Analysis) which allows to find out the best solution using objective and transparent criteria. This tool is mostly useful as a complement of a previous risk analysis, in case of a change of plan, to determine the change's consequences on the project and the possible risks it may create.

Romain Clouzeau: /* Qualitative methods */

2016-09-23T06:49:39Z

Qualitative methods

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	Those are, for some, the methods currently used in the industry. They include:		Those are, for some, the methods currently used in the industry. They include:

	• [https://en.wikipedia.org/wiki/Brainstorming Brainstorming]. It is an intuitive method which ~~using~~ the ideas of several people around the project in order to list possible problematic aspects (or possible advantages as a risk may be an opportunity) affecting the project. This can be used in order to gather as many risk as possible during the risk identification process, but it is mainly based upon people’s experience and imagination and as such may not be exhaustive or accurate, especially since every construction project is unique. The [http://apppm.man.dtu.dk/index.php/The_Delphi_Technique_in_Project_Management Deplhi Technique] is also a brainstorming process but which keeps participants anonymous while each can see the results of the process. It may be a way to encourage participation and “crazy” ideas which may prove useful for the process. Using a [https://en.wikipedia.org/wiki/Structured_What_If_Technique SWIFT] (structured what if technque) process during the brainstorming may help explore more paths and gather more risks, due to its methodology designed to make new ideas arise. ~~WIthout~~ the use of a SWIFT process, this method is really a basic one and may miss some of the risks that will appear during the realisation of the project.		• [https://en.wikipedia.org/wiki/Brainstorming Brainstorming]. It is an intuitive method which uses the ideas of several people around the project in order to list possible problematic aspects (or possible advantages as a risk may be an opportunity) affecting the project. This can be used in order to gather as many risk as possible during the risk identification process, but it is mainly based upon people’s experience and imagination and as such may not be exhaustive or accurate, especially since every construction project is unique. The [http://apppm.man.dtu.dk/index.php/The_Delphi_Technique_in_Project_Management Deplhi Technique] is also a brainstorming process but which keeps participants anonymous while each can see the results of the process. It may be a way to encourage participation and “crazy” ideas which may prove useful for the process. Using a [https://en.wikipedia.org/wiki/Structured_What_If_Technique SWIFT] (structured what if technque) process during the brainstorming may help explore more paths and gather more risks, due to its methodology designed to make new ideas arise. Without the use of a SWIFT process, this method is really a basic one and may miss some of the risks that will appear during the realisation of the project.

	• [https://en.wikipedia.org/wiki/Interview Interviews] . This method is based upon the experience of the people being interviewed, either directly or through a paper questionnaire. This method has basically the same interest and flaw that the other qualitative method, as it is based upon people and experience as well. It's only recommended to use as a complement to more extensive methods.		• [https://en.wikipedia.org/wiki/Interview Interviews] . This method is based upon the experience of the people being interviewed, either directly or through a paper questionnaire. This method has basically the same interest and flaw that the other qualitative method, as it is based upon people and experience as well. It's only recommended to use as a complement to more extensive methods.

Romain Clouzeau: /* General Process to deal with risks. */

2016-09-23T06:45:31Z

General Process to deal with risks.

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 •	Accept risk: Finally, when there is no other option whatsoever, the last remaining choice is to accept the risk. This should only be considered for acceptable risks as defined in the risk assessment process, as the risk will remain unmitigated (but should not be left unchecked however) during the whole project.
 Once the mitigation methods have been decided, the last phase of control and monitoring may begin. It includes, in the preparation phase, the choice of risk response methods, which should be recorded in a document to allow a good and efficient application throughout the project. During the construction process itself, the risks should be monitored, to ensure that the first no one was forgotten during the preparation process and second that the assessment was correct and that a risk is not more important than expected.
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 This monitoring process must if necessary lead to some corrective measures to always keep the risks on track and mastered.
-[[File:PDCA1.png |200px | right |  thumb|  |'''Figure 5:'''  The overall method to ensure a good risk control: plan ahead (risk assessment and control and mitigation methods), do and apply the mitigation measures chosen, check and monitor the risks throughout the project and act if the mitigation process shows a necessity to.]]
-'''Figure 5''' above highlights the main process to be deployed in an efficient risk management process: it should start by planning ahead of the actual construction, to determine the risks and their mitigation methods. Then, during the building process, those method should be applied, and monitored. If the control process shows anything wrong, it's important to immediatly react, it's the "act". This process is to be applied for the whole lifecyle of the project, and for each and every project, to successfully manage risks.

Romain Clouzeau: /* General Process to deal with risks. */

2016-09-23T06:44:16Z

General Process to deal with risks.

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	This monitoring process must if necessary lead to some corrective measures to always keep the risks on track and mastered.		This monitoring process must if necessary lead to some corrective measures to always keep the risks on track and mastered.

	[[File:PDCA1.png \|200px \| ~~center~~\| thumb\| \|'''Figure 5:''' The overall method to ensure a good risk control: plan ahead (risk assessment and control and mitigation methods), do and apply the mitigation measures chosen, check and monitor the risks throughout the project and act if the mitigation process shows a necessity to.]]		[[File:PDCA1.png \|200px \| right \| thumb\| \|'''Figure 5:''' The overall method to ensure a good risk control: plan ahead (risk assessment and control and mitigation methods), do and apply the mitigation measures chosen, check and monitor the risks throughout the project and act if the mitigation process shows a necessity to.]]

	'''Figure 5''' above highlights the main process to be deployed in an efficient risk management process: it should start by planning ahead of the actual construction, to determine the risks and their mitigation methods. Then, during the building process, those method should be applied, and monitored. If the control process shows anything wrong, it's important to immediatly react, it's the "act". This process is to be applied for the whole lifecyle of the project, and for each and every project, to successfully manage risks.		'''Figure 5''' above highlights the main process to be deployed in an efficient risk management process: it should start by planning ahead of the actual construction, to determine the risks and their mitigation methods. Then, during the building process, those method should be applied, and monitored. If the control process shows anything wrong, it's important to immediatly react, it's the "act". This process is to be applied for the whole lifecyle of the project, and for each and every project, to successfully manage risks.

Romain Clouzeau: /* General Process to deal with risks. */

2016-09-23T06:43:57Z

General Process to deal with risks.

← Older revision		Revision as of 06:43, 23 September 2016
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	This monitoring process must if necessary lead to some corrective measures to always keep the risks on track and mastered.		This monitoring process must if necessary lead to some corrective measures to always keep the risks on track and mastered.

	[[File:PDCA1.png \|~~500px~~ \| center\| thumb\| \|'''Figure 5:''' The overall method to ensure a good risk control: plan ahead (risk assessment and control and mitigation methods), do and apply the mitigation measures chosen, check and monitor the risks throughout the project and act if the mitigation process shows a necessity to.]]		[[File:PDCA1.png \|200px \| center\| thumb\| \|'''Figure 5:''' The overall method to ensure a good risk control: plan ahead (risk assessment and control and mitigation methods), do and apply the mitigation measures chosen, check and monitor the risks throughout the project and act if the mitigation process shows a necessity to.]]

	'''Figure 5''' above highlights the main process to be deployed in an efficient risk management process: it should start by planning ahead of the actual construction, to determine the risks and their mitigation methods. Then, during the building process, those method should be applied, and monitored. If the control process shows anything wrong, it's important to immediatly react, it's the "act". This process is to be applied for the whole lifecyle of the project, and for each and every project, to successfully manage risks.		'''Figure 5''' above highlights the main process to be deployed in an efficient risk management process: it should start by planning ahead of the actual construction, to determine the risks and their mitigation methods. Then, during the building process, those method should be applied, and monitored. If the control process shows anything wrong, it's important to immediatly react, it's the "act". This process is to be applied for the whole lifecyle of the project, and for each and every project, to successfully manage risks.

Romain Clouzeau: /* General Process to deal with risks. */

2016-09-23T06:43:38Z

General Process to deal with risks.

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	Once this process is complete, one has a list of risks and their probable impact and likelihood. The question is now to determine whether those risks are acceptable (“calculated risks”) and as such can be accepted, or if they should be somehow mitigated and controlled. This is the risk evaluation phase. During this step, the project manager should compare the risks he has identified beforehand with the acceptance criteria he established. Those criteria may be a company policy, let to the decision of each project manager, agreed with the other stakeholders, … It’s always a balance between the costs of the risk reducing policy required and the benefits of those measures on the risk. Once this comparison has been made, he gets the list of risk that he is ready to take, and others that need mitigating.		Once this process is complete, one has a list of risks and their probable impact and likelihood. The question is now to determine whether those risks are acceptable (“calculated risks”) and as such can be accepted, or if they should be somehow mitigated and controlled. This is the risk evaluation phase. During this step, the project manager should compare the risks he has identified beforehand with the acceptance criteria he established. Those criteria may be a company policy, let to the decision of each project manager, agreed with the other stakeholders, … It’s always a balance between the costs of the risk reducing policy required and the benefits of those measures on the risk. Once this comparison has been made, he gets the list of risk that he is ready to take, and others that need mitigating.

	Hence the risk control process takes its turn. During this phase, the project manager finds out ~~way~~ to limit the risks that were not considered acceptable in the risk evaluation phase. Four big techniques are mainly used:		Hence the risk control process takes its turn. During this phase, the project manager finds out ways to limit the risks that were not considered acceptable in the risk evaluation phase. Four big techniques are mainly used:

	• Avoid risk: This implies to change the methods used or remove the source of the risk. It’s not always possible but it is the best way to ensure a perfect control of the risk. A good example is the use of a toxic chemical: its utilisation generates risks. If this chemical can be replaced by another not toxic (for a reasonable cost), then the toxic risk can be avoided.		• Avoid risk: This implies to change the methods used or remove the source of the risk. It’s not always possible but it is the best way to ensure a perfect control of the risk. A good example is the use of a toxic chemical: its utilisation generates risks. If this chemical can be replaced by another not toxic (for a reasonable cost), then the toxic risk can be avoided.
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	• Reduce exposure: This consist on reducing the risk by limiting the exposition to its source. It may for example be limiting the use of a crane to the really needing tasks to limit the risks of a load falling and injuring workers: it does not delete the risk but reduces it by acting on its probability of occurrence.		• Reduce exposure: This consist on reducing the risk by limiting the exposition to its source. It may for example be limiting the use of a crane to the really needing tasks to limit the risks of a load falling and injuring workers: it does not delete the risk but reduces it by acting on its probability of occurrence.

	• Accept risk: Finally, when there is no other option whatsoever, the last remaining choice is to accept the risk. This should only be considered for acceptable risks as defined in the risk assessment process, as the risk will remain unmitigated during the whole project.		• Accept risk: Finally, when there is no other option whatsoever, the last remaining choice is to accept the risk. This should only be considered for acceptable risks as defined in the risk assessment process, as the risk will remain unmitigated (but should not be left unchecked however) during the whole project.

	Once the mitigation methods have been decided, the last phase of control and monitoring may begin. It includes, in the preparation phase, the choice of risk response methods, which should be recorded in a document to allow a good and efficient application throughout the project. During the construction process itself, the risks should be monitored, to ensure that the first no one was forgotten during the preparation process and second that the assessment was correct and that a risk is not more important than expected.		Once the mitigation methods have been decided, the last phase of control and monitoring may begin. It includes, in the preparation phase, the choice of risk response methods, which should be recorded in a document to allow a good and efficient application throughout the project. During the construction process itself, the risks should be monitored, to ensure that the first no one was forgotten during the preparation process and second that the assessment was correct and that a risk is not more important than expected.