Risks on Infrastructure Projects

Risks on infrastructure or construction projects present many type of challenges. The impact of getting it wrong right at the start of any project could bring years of headaches. But, by taking a proactive approach, stakeholders can reduce uncertainty during the planning stage. This gives project managers insight into mitigating risks on future infrastructure projects using lessons learned to save on future project costs.

Risks on infrastructure projects are predictable. These can include the insecurity of funds, cost of project overruns, failing to source materials and workers, and delays. These are the common challenges stakeholders face during large infrastructure projects.

It takes hands on project management to juggle all moving parts of a long-term infrastructure to keep it on track.

Risk performance influenced by uncertainty

According to the Institute of Risk Management research, Managing cost, risk & Uncertainty in infrastructure projects, project managers face many challenges. This most important phase of a long-term, infrastructure project is during in the early, planning stages. A lack of transparent risk assessment during this phase can mean high risk and uncertainty throughout the project. This can cause:

  1. completing a risk analysis with different possible outcomes

  2. poor decision-making

  3. stakeholder optimism – delusion or deception

  4. loss of focus and sub-optimal risk mitigation.

Risk analysis challenges

A risk analysis is subjective, especially on infrastructure projects. Why? There is no clear way of progressing hypothetical risk analysis to project specific cost analysis within a commercial structure. There is also a tendency to exaggerate how well mitigation strategies work. So, project managers identify unnecessary risks or overestimate the effects of mitigating project risks. This leads to overestimating costs.

Challenges of poor decision-making

An Institute for Government (IfG) report, What’s wrong with infrastructure decision making? found the following key flaws in stakeholder decision-making for infrastructure projects:

  • No strategies for investing in infrastructure. Stakeholders      often do not have clear strategies for investing in infrastructure      projects. Without infrastructure investment strategies, it is difficult to make good decisions. Also, there is nothing to measure project outcomes against.

  • Little attention paid to assessing options at the start. Stakeholders spend too little time during project development looking at all the options. This can result in missing better project options causing project cost blow outs.

  • Misunderstanding project risks. Decision-makers can misunderstand project risks. This can mean there is little forward planning for when things go wrong.

  • Winners and losers. Infrastructure projects can divide communities and create winners and losers. These groups can have a lot of influence on decision-makers and cause project delays.

  • Lack of project measurement. Stakeholders fail to measure infrastructure project outcomes against the costs when completed. Having key performance measures is an invaluable tool for future use. This helps stakeholders to learn from past mistakes when commissioning new infrastructure projects.

Challenges of stakeholder optimism – delusion or deception

Reducing risk on large infrastructure projects depend on whether:

  • the assumptions stakeholders adopt are strategic misrepresentation or genuine optimism

  • financial managers ignore/misunderstand real risk levels while pressuring for cost reductions to meet short-term financial goals

  • there has been an overestimation of the risks by project managers to secure a larger contingency fund and, thus, cover all bases

  • pricing from contractors is low to remain competitive but they may use other means to maintain a profit

  • there is resistance from project managers to processes and procedures that reduce contingencies and risks.

Complex projects increase these risks. Taking control and ensuring transparency from the start helps reduce infrastructure project risks. You can mitigate risks during the contract phase.

Reduce risks during the contract phase

It can take years to fully complete infrastructure projects, so they have long-term project plans and phases. During this time legislation and regulations can change. This needs careful consideration during the contract phase, especially if dealing with European contractors. Consider the following:

  • Are there higher costs related to dealing with a European contractor? Look at the different legislation between the two countries.

  • If there are changes to immigration legislation that impacts the contractor’s access to workers, who is responsible for this?

  • Who is responsible for paying the taxes between the UK and the EU?

You should also consider the risks associated with currency variations, as well as the continuity and cost of a skilled workforce. If sourcing skilled workers from overseas, can you maintain the workforce for the duration of the project?

It is important to mitigate these types of risks at the contract stage. Having these set out in contracts before starting the work can reduce costly potential conflicts during long-running infrastructure projects.

Overcome challenges on infrastructure projects using transparency. Good construction risk management software or Infrastructure project management software can give all stakeholders the transparency required. Planning a realistic acquisition program allows all stakeholders to fully investigate all the options. Once these are clear, you can take a logical approach that accounts for emerging technology and changing economic times.

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Guide to Managing Construction Projects

In this guide to managing construction projects we cover the technical skills along with the deployment of construction project management software to keep projects on track.

This guide to managing construction projects also includes best practice tips to help avoid pitfalls on construction projects. It provides specific advice to help complete a construction project with success.

 

Construction project phases

Construction projects have clear phases within their lifecycles – concept, planning, implementation, control and close out. These give guidance on how to get things done on budget and on time. Skipping any will likely mean your project is running out of control.

This will include setting up the project phases and defining deliverables for each milestone.

Most projects that follow best practice use the following main phases:

  1. Conception. Before you plan anything investigate the feasibility of the project. Complete a project feasibility report. This should include costs, deliverables, timelines, and how and why it will be done.

  2. Planning. Once the project has the go ahead with scope, budgets and timelines set, start planning how to achieve each phase. Complete a work breakdown structure for each part of the construction project. Allocate resources and setup a schedule in construction project management software. Make sure to include every last task with timelines and costs assigned.

  3. Implementation. Implementation begins when people actually start the physical work. This is when the construction of the building occurs. You need to keep on top of:

    1. Time management. Keep track of time. Use the schedule to compare estimated times to finish against actual completion times.

    2. Managing costs. You should already have estimated costs against each task in the schedule. Add in actual costs on completion of each task.

    3. Managing quality. Quality management is vital for the quality of the end product. Without processes and procedures to ensure the quality of every aspect of the build, there is no way to maintain a quality build.

    4. Managing change. Good processes for change management make changes simple to execute. Construction management software can manage the change process for you. This makes it simple for all stakeholders to access with transparency.

    5. Managing risks. Risks should already be logged into a risk register. Keep a close eye on these so you can mitigate them before they occur.

  4. Keeping control. Keeping control is really part of implementation. It is all about staying on top of the costs, risks and meeting timelines to get those milestone payments.

  5. Project close out. Wrapping it up is an important part of the construction project process. To close out a project write a report, address any outstanding issues, file any administrative paperwork for completion and redistribute resources no longer required on the project.

 

Setting up roles and management systems

All construction projects have clear roles with responsibilities assigned, along with management systems to make everyone accountable. It is important for the success of a project that there are clear leaders with good communications skills to lead the construction team.

Assign roles and responsibilities to team members with matching skills. Take advantage of people’s key strengths to get the best outcomes.

Managing quality assurance

How do you manage quality assurance? This takes knowledge of legislation and regulations. You also need to know how to set up processes to maintain quality assurance during each project phase. Construction projects have to meet many standards. Missing anything can mean expensive repairs after completion. And, a loss of your reputation.

Tracking and identifying variances

Tracking is vital to any construction project. It allows for the identification and resolution of project variances. Using construction project software can take care of everything you need. Reports, cost overruns schedule slippages can all be identified and reported on automatically. You need ways of measuring the performance of the project that you can apply to the work breakdown structure and any other parts of the work. Examples of measurements you can use include:

  • Budgeted cost of work. This is the scheduled cost in the budget for the scheduled work.

  • Actual cost of work. This is the cost of work completed at any time according to the organization’s accounting system.

  • Budgeted cost of work performed. This is the earned value of the completed work at any nominated time.

  • Estimated cost at completion. This is the expected cost to complete the construction project calculated at any given point in a project.

By using the work breakdown structure as the basis for project tracking it helps to establish a project baseline. This gives you something to measure against.

These best practices are interrelated. By missing any of these, your project will run into trouble. With the complexity of managing construction projects, project managers need all the tools available. Construction project management software makes it easy to track projects with transparency. It also helps when dealing with the change process and alerting to potential risks all in a central database. We hope you enjoyed reading this guide to managing construction projects.

Project Management Document Control

Project management document control is about managing technical, contracts, manuals, plans and design documents. It also sets out the document control procedures across the construction project. So, a project management document control solution should make it easy, to mange, access, and share key project documents throughout your organization.

 The days of storing construction project documents in filing cabinets are long gone. With any construction project management software it should be easy to digitize your documents to store  in the cloud for access by anyone from anywhere with a internet enabled device.

Documentation control is the backbone in construction management. You need to have this under control to achieve successful construction project delivery. Improving construction project management document control and workflow ensures you deliver your projects on time. As the complexity of projects grow, you need better transparency for tracking a project’s progress during construction.

Using some flavor of construction project management software means all users can share important documents. All relevant stakeholders can access the relevant information the minute someone updates it. This avoids costly mistakes.

Improving document control in project management gives everyone easy access to relevant parts of the project. This eliminates the need to manually update document systems and communicate changes personally. Needing to constantly communicate workflows and updating paperwork is stressful and time consuming. Law of averages says there is likely to be human error that can lead to mistakes, delays and missed milestones.

Integrating construction project management software for document control into your system means it can share the information everyone needs in a timely manner.

When workflows improve across the whole project, it will run smoothly to construction project delivery. Consider the different areas a project relies on updated information to keep the it on track.

Job site and office intercommunication

Communication between the job site and the office is critical. No more can you rely on a pad or clipboard and a pen to record information. The old days of handwritten notes recorded in the system at the end of the week comes with huge risks. Risks of bottlenecks, delays and mistakes. It may be too late when updated project drawings arrive at the end of the week making changes.

The old way disconnects the construction site with the office. Using handheld devices and a construction management software package, workflows will improve. An onsite foreman can document his reports, capture employee information and take photos in real-time. This gives the office daily progress updates and notification of any problems. The office can upload change orders, RFIs, updated plans and new schedules. Work flows better with a real-time exchange of information keeping everyone information flowing.

General and subcontractor communication

Construction project management document control takes the pain out of waiting for updated information. Subcontractors often have to wait for approvals and other paperwork from the general contractor. This can delay their work on the job. How much do these types of delays cost your business?

Construction management software all documentation in a central database. This is a record of all correspondence between everyone involved with the project. Subcontractors can access the system for the paperwork they need instead of chasing the general contractor. No more frustration or delays. It helps to keep your project progressing to project delivery.

Project manager and accounting department communication

With work flowing well in other project areas, take a look at the work system between the project manager and accounting. Things like needing to enter employee times into the system for payment is time-consuming for a manager. Project management software can deal with this. Employees log on and log off the system from a remote handheld device.

When determining construction project controls and project costs, can you access the information you need? Without good work processes and procedures, you will need to request information from accounting. This is time-consuming both for you and accounting staff. Integrating construction management software with accounting gives access to real-time information. No more disturbing other staff members to get the information you need. You can look it up yourself. It saves a lot of time and frustration.

Saves time and reduces risks

As the complexity of construction projects grow, manual systems no longer cut it. Keeping up with phone calls, emails, paperwork and staff demands takes up valuable time. It reduces productivity and stress levels rise. Instead of working on mitigating risks, you are likely to make mistakes trying to keep up with the document trail.

According to the KPMG 2016 Global Construction Survey 67 percent of all participants said construction project risks were rising. This figure rose to 78 percent when related to construction and engineering organisations. This shows the construction industry needs to find a better way to handle the complexity of projects to mitigate the risks of failure and delays.

Technology is the key. But the construction industry is slow to adopt new technology. Maybe because decision-makers have trouble seeing the value construction project management software brings.

Manual systems reduce your productivity. Instead of being out on the job site, it confines you to the office. Spend time investigating the best construction project management software. With more time on your hands you can spend it on site, working on higher-level tasks to mitigate the risks. Get your documents and work flows organized with construction project management document control.

Construction Task and Project Tracking

Construction task and project tracking is challenging at the best of times. There are so many moving parts in a construction project that even one missed task can impact the whole project plan. This can be challenging and made more so without the right use of tools.

Construction task and project tracking is about putting the project manager firmly in control. So, how do construction project managers organize all the moving pieces of a project into one unified plan?

Well, it’s a combination of experience, skill, knowledge  and using project management tools.

How often to do you find your construction project running over time or budget? Without the right tools, it is impossible to keep track of all you need to do. At every stage of a construction project, milestones and budgets need close monitoring to ensure you stay on track. Schedules need regular updating and compared to the baseline schedule over and over again during a project.

This is where the use of construction project management software could prove invaluable. It should make construction task and project tracking easy., plus using the right tools takes the stress out of keeping construction projects on track.

Here are some of the things construction task and project tracking tools can do for you.

Manage project changes

Regardless of the construction project, there are always changes. Change orders if not executed correctly and on time, can be costly. And, when they get lost in the system it can cause serious hold ups to a project. Time is money – remember. Using software that tracks change orders from start to the billing cycle removes this risk from your project.

Subcontractors usually need input into change orders, so storing them in central database for them to access makes it easy. All they have to do is log in to make their changes to the price or submit invoices or updated plans and drawings. These are tracked online with easy access for all involved in the change process. One less thing for a project manager to worry about unless the system alerts to a problem.

The same goes for the general contractor. Construction task and project tracking software can simplify the interactions between them and the stakeholders. The system submits change orders for approval and reduces the time it takes to get things signed.

Better time management

Without an ability for transparent construction project tracking you run the risk of running out of time. You can lose so much time can if you are not on top of everything. Staff waiting for materials, change orders, plans, tools, equipment and instructions are a huge cost to a project if not kept under control.

Use construction project tracking so employees out on the site can enter time-card information while on the job. This gives you the tool to track work productivity daily against the schedule. You can assign the work to the relevant cost code to alert to a billing status.

This provides you with a clear picture of how the project is tracking. It also gives you the information required to make decisions, assign work tasks and quote on future projects.

Construction project tracking means you can see the productivity of your workers. With this information, you make the right decisions.

 

Identify potential problems

Construction task and project tracking will help you to identify potential problems as part of a risk matrix. There can be things like having the right materials on site at the right time, meeting deadlines for inspections and sign offs or even trouble getting the right equipment to the site. All these have the potential to block a construction project’s progress.

Your software can track these by implementing the right tool so the relevant people go through a submittal process so you can avoid the problems. It need to be set up correctly so it functions for your projects. But, you may need field such as the ‘required on site date’ so everyone is aware of turnaround times.

Because an approval process goes through several people there can be places where it gets held up. Your project tracking software can show you where in the process it is held up.

Make punch lists visible

The dreaded construction punch lists. Track a project’s punch list right from the start. The project cannot finish until you complete everything on it. These can be cause for much loss of sleep and stress. When a punch list is not clear it can cause misunderstandings and delays to completing the project.

Use the punch list tools to make a specific list of the what needs completing and how to do it. This type of feature in your toolbox should be mobile compatible and easy to use from a handheld device. Make it interactive so those responsible for completing punch list tasks can make notes against each one. They can even record whether there is an impact to the budget or timeline. Once the system has timelines against tasks, the system sends reminders at appropriate intervals.

This is just a small snapshot of what construction task and project tracking can do for you. When are you going to give your project managers the tools they need for success?

Talk to the experts. Find out how construction project management software can boost your profits with no more missed deadlines.