Project risk management success requires a collaborative approach

On any given construction project, thousands of decisions are made across dozens of stakeholders who are trying to reconcile seemingly unlimited variables.

While every project team works to be aligned, the reality is that the technologies they apply—from a basic Excel spreadsheet to multiple disparate construction software solutions—often aren’t congruent.

Technology solutions have improved efficiency and made it easier to connect teams, but they also have created information silos. Critical data and insights continue to be locked within specific apps and proprietary formats, and far too much manual activity is required throughout the construction process.

And that opens the door to errors. These errors enhance uncertainty, which in the project management arena we recognize as risk.

In the world of construction project management, risk is a constant companion. Based on how well we know and successfully manage this companion, things can either go smoothly or become a costly, unpredictable series of headaches.

The lazy way to manage risk

It’s surprising how many project owners and general contractors take an informal approach to construction risk management, defaulting to “the ways we have always done it,” which for most is spreadsheets.

That’s not necessarily wrong, but it’s clearly not a long-term plan for sustained future success.

Construction projects failing to effectively manage risk typically miss deadlines, encounter cost overruns, and rarely succeed in delivering on time and budget.

Follow best practices—the six steps of risk management

Perhaps it’s time to make risk the centerpiece of the project and connect organizations across all six steps in the risk management process: establish a risk management plan; identify risks; qualitative risk analysis; quantitative risk analysis, risk mitigation plan; and monitor and control. 

As you take step one and establish a risk management plan, remember that you’re not alone in this effort. Ask yourself if the risk management plan makes it easy for everyone to contribute; if it democratizes the identification process; and ultimately what technical underpinnings would be required to incentivize and meaningfully connect your project communities and enterprises.

Risk is everyone’s business—make risk management collaborative

Connected, collaborative project risk management not only boosts the probability of success, but it also alleviates anxiety and offers a higher degree of predictability. How do you get to that state?

Connect your project teams around risks by creating a shared and central register; this will allow you to minimize your reliance on error-prone spreadsheets and run your full risk management framework in one place. Rather than creating inconsistencies that cut into efficiency, everyone uses the same tool to cover all six risk management steps.

See what’s possible with the Oracle Smart Construction Platform

Here are three best practices you can follow:

Institutionalize your risk management process

Follow the six-step methodology, which is endorsed by the Project Management Institute. Those six steps are part and parcel to what most organizations aim for on any given project, but the reality is that the technologies applied to all of these steps aren't particularly consistent. Again, a lot of organizations default to what they’ve always done. And that impedes trust and transparency, which creates uncertainty, which builds risk, and culminates in costly errors and delays.

Be collaborative

All six steps of the risk management methodology happen in one solution with Oracle Primavera Cloud Service. A central register gets everyone working off shared information and exposes the impacts and actions taken in one common place. Remove the barriers of failed collaboration and error-prone spreadsheets and easily tie risks to the project schedule for impact analysis.

Manage risk at scale

Construction companies seldom work on just one project at a time. It’s great to apply the six steps to a single project—perhaps that’s a good starting point—but the Oracle solution makes it just as easy for all projects to avoid risk. These steps, patterns, trends, and strategies align across your entire construction management portfolio where past and present learnings lead to greater predictive intelligence.

Connect risk management through Oracle Primavera Cloud Service

It’s also financially smart for all parties to mitigate risk together. On the owner side, managing risk pairs with the contracting community to build collaboration and trust. For delivery teams, it’s a way to reduce exposure to retain profit.

Risk management doesn't have to be complicated, and it's not when you have a structured approach to dealing with risk. It’s why the six steps exist, and it’s why they work when you follow them.

It’s financially smart for all parties to mitigate risk together. On the owner side, managing risk pairs with the contracting community to build collaboration and trust. For delivery teams, it’s a way to reduce exposure to retain profit.

There’s no proprietary method to mitigate construction project risk. But the six-step methodology becomes muddled time and time again because people try to apply a different type of technology to every step in the process.

Instead, connect those steps. It seems kind of silly when you analyze it—connecting teams and information is a cornerstone to managing risk. And Oracle Primavera Cloud Service creates that common place for all stakeholders to manage risk together.

Many organizations continue to employ disjointed and ineffective approaches to track and manage construction project risk. In this on-demand webcast, part of a series on the Oracle Smart Construction Platform, we’ll explore how you can enable everyone on a project—owner, general contractor, trades, and others—to help manage risk through a common, centralized approach. Watch “Protect Projects and Profits With a Collaborative Approach to Risk.”

Oracle Construction and Engineering, the global leader in construction management software and project portfolio management solutions, helps you connect your teams, processes, and data across the project and asset lifecycle. Drive efficiency and control in project delivery with proven solutions for project controls, construction scheduling, portfolio management, BIM/CDE, construction payment management, and more.

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