Construction projects are not built to the original designs, changes occur throughout their lifespan and many are as a result of the realisation of risks. The Institute of Structural Engineers identify that the industry is particularly poor at managing change and this has a knock-on effect upon both quality and cost. The minimisation of risk therefore has a direct benefit to an area greatly in need of assistance and will lead to a better value project.

Risk management is a process to identify potential problems that could have a significant negative impact on a project, evaluate those risks and minimise their effect. Successful implementation requires senior management commitment, ownership and understanding of the process.

Risk management follows a series of steps, often undertaken in a workshop environment:

• identify and assess risk

• assign impact and probability of the risk

• produce a risk register ranking the identified risks

• respond to the risk / take countermeasures

• allocate ownership of the risk, this may change throughout the life of the project

• establish procedures to manage and monitor the risks

• review the risks regularly throughout the project and update the register as necessary

The risk register provides all parties with a method to monitor and assess the project and make changes as necessary. These changes may be to the design of the project, to avoid identified services for example, or during the construction stage where alternative methods of working may be adopted. It should be remembered that not all risks are as a result of physical restrictions, risks are also inherent in commercial decisions, supply chains and with people to name a few.

There are a number of scoring systems and the choice of any particular one is not critical. Scoring risks will show that those with both high impact and high probability require the most attention. Once identified, there are four possible responses to a risk:

• Risk avoidance - effects of certain risks may be so detrimental to a project that a re-appraisal of the project may be necessary potentially leading to its cancellation or replacement

• Risk reduction - the most typical action, involving redesign, alternative construction methods etc.

• Risk transfer - it may not be possible to reduce the risk at a particular stage of a project and, once fully understood, may be transferred to a member of the project team to be managed.

• Risk acceptance - should none of the other options be applicable, the client must accept the risk. The risk may have been reduced or shared however some are inherent in construction projects.

It is likely that in any particular project all four responses will be applicable. It is important to revisit the register on a regular basis to re-evaluate the risks, always with the aim of risk reduction.

Construct Wales recognise that risk management is a helpful tool in achieving best value and can offer support, advice and facilitation of a variety of activities and workshops.