In all industries, companies today are seeking to boost their profitability, meet regulatory obligations and perk up business effectiveness; the construction industry is not off the hook. Being multifaceted and compound, construction project has many stirring divisions and is particularly reliant on third parties to meet-up their contract commitments. There is no similarity or identical characteristics attached with any two different projects.
Risks are acknowledged and examined in an arbitrary, brainstorming manner in the majority of construction projects. This is frequently lethal to the project’s success, as unforeseen risks come to pass. These risks, instead of being reckoned with and warded off in a premeditated and unhurried manner, have not actually been planned or assessed and is thus required to be taken into hand without delay basis. In the initial stages of planning and preparation in risk assessment and management, it is vital to identify, characterize and assess the prospective risks. Instead of considering each risk arbitrarily and independently, it is exceedingly effectual to spot out risks and then designate them into groups, and then to draft a category list and finally classify possible risks that may lie within each group/category. In this fashion, common influences, causes, factors, possible impacts and probable corrective and/or precautionary actions, could be considered and settled on.
Construction professionals need to know how to balance the contingencies of risk with their specific contractual, financial, operational and organizational requirements. In order to achieve this balance, proper risk identification and risk analysis is required. The risk management process entails identifying construction risks and exposures, and formulating an effective risk management strategy to mitigate the potential for loss.