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Key factors of successful risk management

Posted by Chris Gallivan - 04 October, 2018

The execution of any kind of construction project is characterized by risks that construction professionals need to be aware of in order to reduce them effectively. In this post, we explore the factors that have a big impact on project success.

KPMG global survey suggests underperformance of construction projectsWithout adequate risk management measures, construction projects are vulnerable to a variety of risks. Failures resulting from inefficient risk management can result in:

  • project quality requirements not being met
  • expensive repairs becoming necessary
  • calculated project time being considerably extended
  • investor(s) suing for damages

Any one of these points could be critical. Together, they can be fatal. They not only cost time and money but also have a great impact on the operation. 

 Two key levers for minimizing risks

Risks can be managed and minimized, also before reaching a critical point. For construction projects in general, risks can be significantly reduced through two basic factors:

  • The choice of a suitable technical solution that meets the project requirements.
    Ineffective solutions may seem cheaper at the outset but often endanger the success of the overall project or cause unexpected additional costs.
  • The qualification of the contractor for the work to be carried out. Even with state-of-the-art technologies, problems arise when the contractor lacks the knowledge, expertise and experience to apply and process the solutions correctly.

from general to specific product information in only 4 steps

The choice of the wrong contractor and the consequences described above can mostly be traced back to the widespread principle of the low bid system, which often results in delays to the planned schedule, cost overruns and quality issues. It focuses exclusively on the bid price as the sole basis for the selection of the contractor rather than on his competence. But it is precisely competence and qualification that are prerequisites for a successful project.

 Supporting effective risk management

Successfully managing your construction project involves the ability to understand and effectively mitigate risks. Two factors are crucial in this respect: choice of contractor and choice of construction materials. Master Builders Solutions by BASF takes the approach that good products are only half the solution: A reliable and competent partner is also needed to apply the products correctly and thus minimize the risks. Master Builders Solutions recommend certified partners who have the knowledge and experience necessary for your project.

 

Learn more in our free report: “Risk Management for Construction Projects”.

 

 

Topics: Risk Management

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