The Importance of Effective Risk Management in Infrastructure and Construction Projects
Project managers and Key Stakeholders on major Infrastructure Programmes need to follow a risk management process that helps them understand and identify the threats and opportunities within a project. It is essential to consider risk drawdown, which represents a significant risk for investors when share prices rise in the infrastructure and construction sectors.
Analytical tools like QSRA (Quantitative Schedule Risk Analysis), a semi-quantitative tool, can aid project teams in understanding the risks associated with their project schedules. This understanding helps teams determine which risks are acceptable and require better control. Similarly, QCRA (Quantitative Cost Risk Analysis) is valuable for estimating the approximate cost contingency needed to supplement project estimates and ensure that the assigned budget will not be exceeded.
Forensic analysis is a crucial component of comprehensive risk management, helping to understand and predict the likelihood of certain behaviours. This analysis employs two primary methods: planned vs. as-built and impact analysis.
Planned vs. As-Built Analysis is a retrospective methodology comparing the original contract schedule with the project’s progress. By identifying any discrepancies, this analysis provides valuable insights into deviations from the plan, helping to recognise underlying causes and lessons learned for future projects. On the other hand, Impact Analysis is a forward-looking approach that predicts the consequences of potential disruptions to business processes or functions, aiding in developing strategies for recovery and ensuring the project’s resilience in the face of setbacks.
Furthermore, effective risk management relies on meticulous record-keeping throughout the project. Regularly updated records enable project managers to promptly identify, analyse, and evaluate risks, ensuring appropriate actions are taken. Since project teams are often dispersed across multiple locations, efficient document management via project management software is paramount. This centralisation of project documentation facilitates seamless communication and coordination, ultimately enhancing overall project efficiency.
Moreover, completing a project does not mark the end of a project manager’s responsibilities. The project closure phase is critical, as it involves comparing deliverables to the project’s intended outcomes to ensure quality standards are met. It also provides an opportunity to reflect on the project’s journey, identifying lessons learned, successes, and areas for improvement, which can guide future projects and foster continuous improvement.
Comprehensive risk management is vital to ensure their success in infrastructure and construction projects. If you are passionate about risk management and ready to impact this sector significantly, we invite you to join our client’s team.
