Risk Management Construction

Risk management Construction – Management of the construction process

The construction industry is characterized by projects with delayed schedules, exceeded budgets and the quality is not always as expected. The challenge is particularly pronounced on mega projects. If you have to build something big, you have all the odds against you. 9 out of 10 megaprojects go over budget, and exceedances of 50% or more are quite common.

Many of the reasons for challenges lie in the decision-making processes, competencies and management methods. If you are interested in knowing more, we have links to some good articles on why megaprojects go wrong. If it’s not a megaproject you are facing, the articles still give a really good understanding of the issues.

Megaprojects are constantly “Over budget, over time, under benefits, over and over again”
Iron Law of Megaprojects, Bent Flyvbjerg 2011. 

Top Ten Behavioral Biases in Project Management: An Overview, Bent Flyvbjerg 2021. 

Data-driven Project and Risk Management Construction

If you are interested in achieving your project, we have developed a data-driven method for project and risk management. Our risk management differs from traditional methods by being fact-based, without subjective assessments, and the implementation is time-saving, as the reporting and analyses are largely automated.

The result is that every day, you know where your project is in relation to the plan, and risks can be mitigated in time.

5 steps for Project and Risk Management at Exigo

1) Before project start

The most important starting point for minimizing risks in the subsequent construction process is to prepare a precise and complete ICT agreement / BIM Execution Plan, which all project parties must commit to.

If the ICT agreement is to provide value, it is important that all parties know exactly what to do and when. All details regarding the development of the project’s 3D building models, including interfaces across disciplines, must be mapped and planned. The ICT agreement is a comprehensive document that is prepared before the design and which is used through all phases, up to and including the subsequent operation.

We can help you draw up robust ICT agreements regarding your construction project. We use and have core competencies within both ISO 19650 on international projects and Molio A102 / 402 on purely Danish projects.

Read more about our ICT management here.

What is BIM Process Management?

BIM Process Management includes defining goals, scope and workflow for the implementation of BIM methods in a project. This is described in documents such as ICT agreements, Process Manuals and Delivery Specifications or Employer’s Information Requirements (EIR), BIM Execution Plan (BEP) and Task Information Delivery Plans (TIDP) etc. according to ISO 19650. The documentaries must match information requirements to data and geometry, digital deliveries, the development of them through the phases of the project, and who is responsible for each individual delivery and trade.

2) The design phase

Before starting construction, it is important that all the developed 3D building models regarding your project are thoroughly quality assured. This applies to both the individual 3D building models and the interdisciplinary common model, which is one collection of 3D models from all subjects. Are the models made geometrically correct? Are they named correctly? Has there been ongoing collision control across disciplines?

Popularly speaking, your project must be able to be built flawlessly on the computer screen before the start-up of the project is actually started. If not, wait until the whole project is ready. It can be very costly to repair collisions on the construction site.

We help you ensure that the 3D models, and thus the project material on which the construction process is based, are of high quality so that you minimize the risk of additional bills during execution significantly.

Read more about our collision control and buildability analyzes

Why is buildability important?

Research shows that the key to keeping costs down is to make the implementation phase as short and delays as small as possible [Flyvbjerg, 2017]. This can be ensured i.a. through prefabrication, standardization and modularization. But it is also extremely important that the project material is well-coordinated and therefore buildable within the planned implementation phase.

3) Before starting construction

We help you and your team create a completely transparent and realistic schedule as well as ditto finances. We provide you with an overview where you can see the consequences of changes and risks.

We do this by using the location-based method, and coupling it with quantities from the 3D building models from your project. The quantities from the models are enriched with price and productivity data, and different scenarios are analyzed and optimized until the most optimal plan is found. This applies to both total economy, execution time, construction flow and CO2 consumption.

Why is a realistic plan for the whole project important – it still doesn’t hold!

The result of the planning effort is both to establish the formal performance baseline as well as the legal contract determination scope and insurances [Gil & Pinot, 2018]. Furthermore, the planning of megaprojects often tends to be overly optimistic, limited learning from other megaprojects and therefore does not allow sufficiently unforeseen events for complexity and unplanned events [Flyvbjerg, 2017]. In order to be able to deal with the unforeseen, it is important to have a plan where consequences in detail can be quickly seen through. It is, therefore, crucial to use a structured data-driven approach to break down the work and estimate the duration of the activities. This is done by basing the execution planning on quantities distributed by locations and involving the contractors who have deep domain experience.

4) The execution phase

Real-time and financial control based on earned-value management, status registration and management reporting with online dashboards.

In the execution phase, we continuously follow up on whether your project is progressing in accordance with the plan. As soon as a deviation is identified, we ensure that corrective actions are taken immediately so that the deviations have minimal consequences on the project.

How is financial management implemented with Earned Value Management?

The financial management is carried out using the location-based schedule, which provides an easy-to-understand structure for cost allocation. Preferably based on quantities from a 3D model but otherwise calculated manually.

By “cost-loading” the location-based schedule, the basis is created for calculating the planned cash flow completely automatically. When the propulsion is entered for each activity at the individual locations, the current value created on the construction site is known. It will then be easy to compare with the monthly stage reporting from the contractors and the individual teams on the construction site as well as subcontractors. This utilizes the Earned Value method to monitor and risk assess progress. In Exicute, this can be done in minutes minutes daily or weekly for even very large projects.

Real-time progress reporting also ensures that project payouts reflect the actual work on site, so that the total project payout at all times corresponds to the total earned value of the work performed.

5) Progress, performance and financial reporting

We provide you with an overview by setting up dashboards to visualize performance. We set up intensive tracking of progress data, which is reported in real-time from the construction site so that risks as well as financial consequences and time consequences are visible and can be addressed.

In the dashboards we will set up for you, the views of the data behind can be adjusted so that the individual views are of relevance at different levels. For example, overall data for the board and top management level, as well as detailed views down to a specific location to the project manager or project manager level. It provides a strong communication platform when everyone is looking at the same data.

And with such a strong underlying dataset, it is relatively simple, even on complex construction sites, to analyze and implement corrective actions as soon as project deviations are detected.

What skills do I need?

With the right methods such as location-based planning in Vico Office as well as stage registration and management reporting in Exicute, even very large projects can be handled by 1-2 people. However, this requires the right skills. The individual steps in Exigo’s project and risk management method are simple to understand and learn. The hard part is getting it to work with fully integrated data in real-time on real projects. Here we recommend that you get our help on your first project – then you can with the right effort become autonomous on the next project.

Risk management Construction – We are also happy to help you

A lot is happening in risk management and digitization, and the possibilities are many. Therefore, it can be difficult to figure out which of the jars at the end of the digital rainbow actually contains gold.

In a non-committal meeting, we offer our expertise and feedback, in relation to the exact company you are in.

Write or call Kristina Ekkersgaard, ke@exigo.dk, +45 53 55 59 05 and she will find a date in the calendar for you.

“If you, as the client, do not ensure that construction management and contractors have powerful tools for planning and management available, you can not expect them to deliver good results. I look at Exigo as part of my construction management. The Exigo team has expertise in location-based scheduling coupled with finance and 3D (4D + 5D) and has the experience, tools and processes in place to perform exactly that job. The rest of my construction management, and other consultants, do not have that expertise. The advice and tools I get from Exigo are exactly the advice and tools I need to ensure that my construction management and my contractors can plan and manage the project and deliver the results I want.”