Risk_Management_IS15883final_Part8_PPT.pptx

Definition:
Risk management is the process of identifying, analyzing, and controlling potential events or situations that could negatively affect a project, organization, or objective.

1. Steps of Risk Management

Risk Identification:

Find out what could go wrong.

Tools: brainstorming, checklists, expert judgment, historical data.

Risk Analysis (Assessment):

Study the nature, cause, and impact of each risk.

Qualitative analysis: ranks risks as high, medium, or low.

Quantitative analysis: uses numbers and probabilities to measure the impact.

Risk Response Planning:

Decide how to handle each risk:

Avoid: eliminate the cause of risk.

Reduce/Mitigate: take action to reduce impact or probability.

Transfer: shift the risk to another party (e.g., insurance, contracts).

Accept: acknowledge the risk and plan for recovery.

Risk Monitoring and Control:

Keep track of identified risks, watch for new ones, and check if the response actions are effective.

Update the risk register regularly.

2. Types of Risks

Internal Risks: occur within the organization (e.g., poor planning, labor shortage).

External Risks: outside the organization’s control (e.g., weather, market changes).

Technical Risks: design or technology-related failures.

Financial Risks: cost overruns, funding issues.

Safety and Environmental Risks: accidents, pollution, natural hazards.

3. Key Tools and Documents

Risk Register: list of all identified risks, their causes, impacts, and response plans.

Probability–Impact Matrix: helps prioritize risks based on likelihood and effect.

SWOT Analysis: identifies strengths, weaknesses, opportunities, and threats.

4. Importance

Helps minimize surprises and losses.

Improves decision-making and planning.

Increases project success rate.

Ensures safety, cost control, and time management.

1. Construction Project Management Risk Management (IS 15883 Part 8) Guidelines, Processes & Applications

2. Introduction Risk management is a vital part of construction project management. It ensures project completion within the expected time, cost, and quality. IS 15883 (Part 8): 2015 provides structured guidelines for effective risk management.

3. Project Lifecycle & Risks A construction project passes through multiple stages: - Approval and financing - Development and planning - Construction execution - Commissioning & handover Risks are present at all these stages and must be identified early.

4. Definition of Risk Risk is exposure to uncertainty. It can be both: - Negative: hazards, delays, cost overruns, accidents - Positive: opportunities for savings, improved methods Thus, risk = danger + opportunity.

5. Objectives of Risk Management The goals of project risk management include: - Identifying potential risks early - Assessing their probability and impact - Developing response strategies - Ensuring successful project completion with minimal disruptions.

6. Risk Management Process Overview The process follows six major steps: 1. Risk management planning 2. Risk identification 3. Risk assessment (qualitative and quantitative) 4. Risk response planning 5. Risk monitoring and control 6. Feedback and lessons learned

7. Risk Management Planning Planning defines how risk activities will be conducted: - Structure of risk management team - Tools & techniques to be used - Documentation formats - Budget and schedule allocations - Authority levels and responsibilities

8. Information Needed for Planning Planning requires information on: - Project scope and deliverables - Time and cost management plans - Procurement and communication plans - Quality, HR, health & safety management - Risk attitudes and tolerances of stakeholders

9. Risk Management Plan Elements A risk management plan should include: - Methodology for risk handling - Roles and responsibilities - Risk categories and breakdown structure (RBS) - Probability-impact matrix - Reporting and communication formats - Monitoring and auditing protocols

10. Risk Identification This involves identifying and categorizing risks: - Sources of risk (internal & external) - Areas of impact (time, cost, scope, quality) - Possible consequences Tools: brainstorming, Delphi method, SWOT analysis, interviews.

11. Risk Assessment Risk assessment evaluates and prioritizes risks: - Qualitative assessment: likelihood & impact - Quantitative assessment: statistical modeling (Monte Carlo, decision trees) Outputs: prioritized risks, risk register, contingency requirements.

12. Qualitative Risk Assessment Key steps: - Categorize risks by sources - Identify impacts (time, cost, quality) - Analyze interdependencies among risks Tools: Root Cause Analysis, Probability-Impact Matrix, Documentation review.

13. Quantitative Risk Assessment Advanced methods used include: - Monte Carlo simulation - Decision tree analysis - Expected Monetary Value (EMV) - Sensitivity analysis Provides numerical values for contingency planning.

14. Risk Response Planning Strategies for negative risks: - Accept, Reduce, Transfer, Share, Avoid Strategies for positive risks: - Exploit, Enhance, Share, Accept Responses must balance cost, feasibility, and effectiveness.

15. Risk Monitoring & Control Continuous monitoring ensures timely response: - Track new, residual, and secondary risks - Evaluate effectiveness of responses - Update the risk register - Maintain communication among stakeholders

16. Pre-Construction Stage Risks - Inadequate DPRs and cost estimates - Delays in environmental clearances - Poor technology decisions - Unrealistic project schedules - Weak tendering process

17. Construction Stage Risks - Land acquisition issues - Design changes and delays - Resource shortages (manpower, materials) - Safety incidents and accidents - Political, financial, and legal uncertainties

18. Commissioning & Handover Risks - Final payments & settlements - Documentation gaps - Contract closure issues - Disputes resolution delays - Political interference and stakeholder pressure

19. Insurance in Construction Projects Common insurance types: - Contractor All Risk (CAR) - Erection All Risk (EAR) - Machinery Breakdown (MB) - Electronic Equipment (EEI) - Civil Engineering Completed Risk (CECR) - Contractor’s Plant & Machinery (CPM)

20. Post Construction Review & Feedback Final step involves: - Documentation of risks encountered - Lessons learned - Updating organizational knowledge - Continuous improvement for future projects

21. Key Takeaways - Risk is unavoidable but manageable - IS 15883 provides structured framework - Success requires planning, monitoring, and adaptability - Effective risk management = project success

22. Thank You Prepared based on IS 15883 (Part 8): 2015 Guidelines Construction Project Management — Risk Management