Week One - Risk Identification Worksheet and Paper
Qiana.Reynolds
Week_1_Risk_Identification_Paper_Felecia_Alexander.docx
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Running head: RISK IDENTIFICATION PAPER |
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The intent of this risk identification paper is to define the risk management process for a construction company has been awarded a contract to build a pipeline in Alaska. The risk identification paper will explain the role of risk management in the project planning process for a construction company. It will describe at least two risks and their sources for the construction company. Additionally, this risk identification paper will outline how risk management may mitigate the risks for each risk listed. Finally, it will explain how I would document the risk.
The risk management process for a construction company is defined as a drafted or outlined idea, supervise, and oversee the actions required to avoid subjection to construction risks. In an effort to avoid construction risks, a construction company must identify the hazards, evaluate and analyze the degree level of all the risks, be prepared to produce measures to mitigate all risks, get ahead of unforeseen and under control any lingering risks. “The Baker (2013) a significant component of successful risk management begins with how well the project participants allocate risks at the contract formation stage. Ideally, the project documents will allocate responsibility for certain risks to the party best situated to bear them, thereby minimizing the likelihood and the cost of each risk”. There are six important risk measures and policy regulations, which are essential and need to be well thought-out during a construction project’s agreement development phase. The six vital risk measures are “allocating risk to the party best situated to control the risk, allocating risk through indemnity provisions, utilizing insurance to support indemnity provisions, requiring additional insured status and evidence of insurance, include waivers of subrogation, and review documents with the appropriate consultants” (Baker, 2013). If a construction company follows these vital risk measures, it will alleviate future legalities, which can hinder the development of a construction company’s project.
The role of risk management in the project planning process for a construction company is a critical and effective tool to identify, assess, and minimize or eliminate obstacles and threats for a construction company or any type of business in an effort to control its capital and earnings. According to "Techtarget Neteork"(2020), “Every business and organization face the risk of unexpected, harmful events that can cost a company money or cause it to permanently close. Risk management allows organizations to attempt to prepare for the unexpected by minimizing risks and extra costs before they happen” (2).
The risks associated with the construction company’s contract to build a pipeline in Alaska will depend on the project’s timeline as it is at the highest priority because work can only be completed during summer months. Adverse weather conditions are associated risks, too. When it is too cold, weather conditions are not favorable the construction crew to perform their duties. Paying additional fees to expedite project delivery is another associated risk because this will require more money, which may not be an option for the project budget. Additional associated risks are unapproved suppliers that are not on the construction company’s approved suppler list. Getting unapproved suppliers approved will take time, which may be a waste of time management that could be allotted to accomplishing and producing the deliverables. The last associated risk is funding may be an issue because there is a huge penalty in the contract if the project is not completed on time. The main risk will be if physical injury happens to a construction worker employee. The physical activity of concern for each construction worker is the heavy lifting and carrying, handling of construction equipment and operating construction machinery. The physical activity risk impact is high, which always carries the risk of injury and must be carried out with the utmost caution.
The potential of risk occurring is medium, which includes a medium risk impact. The physical activities will be strenuous at times. All risks will be mitigated through the use of safety equipment at all times and utilizing safety measures and procedures. While there will be a medium risk element, the need for proper personal protective equipment to include ensuring medical supplies are available throughout the project growth. The project will be properly supplied with these materials and easily accessible if a safety risk occurs.
The level of impact on the project could be high. If an injury occurs, the proper aid will be rendered on-site, but the need for additional care may be required. Having a way to efficiently evacuate any injured construction workers will be key to the level of interruption of the construction project.
A plan for managing responses to portfolio and project risks are to always keep in mind the four significant phases to acquire a successful and ongoing portfolio, which will assist in reducing project risks. The four significant phases are executive framing, data collection, modeling and analysis, and synthesis and communication. These steps are significant to gaining and maintaining the construction company’s financial wealth from their portfolio innovativeness. “Executive framing clarifies a system of measurement of interest, priorities, and major strategic concerns. Portfolio management is focused on the very specific needs of the corporation as dictated by its stakeholders. This phase is regularly the variance between creating an effective decision tool and an academic exercise. It also offers the focus needed for rationalization of data collection. Data collection is collecting the information. Modeling and analysis are best performed by someone (or a team) with both project planning skills in an academic environment and business knowledge within a University setting. Finally, synthesis and communication are vital to synthesize the information to make it easy to share with stakeholders. Analysis is inadequate if it cannot provide a better understanding and insight, an improved strategic conversation, and further enlightened decisions.
An accurate strategic adviser can help to modernize model structure, improve analysis times, refine essential insights and facilitate management discussions. All four steps outlined above are critical. It is a common mistake to focus solely on the middle steps of data collection and modeling without paying enough attention to the first and last steps of framing and communication.” (Warren, n.d.).
Documenting risks should be done by utilizing a risk register. There are four imperative steps to document project risks. These four principles are to “use the risk meta-language, impact should be described in as much objective detail as is reasonable, risk should be assessed from different perspectives, and it is the project managing office (PMO) responsibility to improve the risk register.
Risks require a detailed description using the correct risk meta-language by expressing the cause, effect, and impact. When identifying risks, the impact requires as much objective terms as possible and reasonable, which will give an enlightened understanding of the risk during pending analysis. Stakeholders and project construction team should analyze a risk on its impact on the construction project objectives from numerous viewpoints. Lastly, the PMO will be required to create the risk register. When a risk is documented, it simplifies the subject tasks of evaluating the risk quantitatively and defining the risk responses” ("Adding to the Pool of Shared Meaning.", 2012).
In conclusion, the intentions of this risk identification paper for the construction company’s awarded contract to build a pipeline in Alaska were defined. This risk identification paper has explained the role of risk management in the project planning process for a construction company. Two or more risks have been described and their sources for the construction company. Additionally, this risk identification paper is outlined to express how risk management will be mitigated for each risk listed. Finally, it explains how all risks are to be documented on the risk register.
References
Adding to the Pool of Shared Meaning. (2012). Retrieved from https://lokesh12.wordpress.com/2012/12/14/4-best-practices-for-documenting-project-risks/
Baker, A. F. (2013). Construction Executive. Retrieved from http://constructionexec.com/article/the-basics-of-risk-management-in-construction-contracts
TechTarget Network (2020). Retrieved from https://searchcompliance.techtarget.com/definition/risk-management
Warren, L. (n.d.). Aucerna. Retrieved from https://aucerna.com/blog/the-4-key-steps-for-successful-portfolio-management/
