A quick review of risk management state of the art in construction
Updated: Nov 12, 2020
The need for controlling risks in construction projects is well documented. For instance, Szymański presents an exhaustive list of relevant risks in the sector . In this publication, authors remark on the importance of starting the risk management process even before the signing of a new contract. It also concludes highlighting the need to increase the predictive capacity of risks and to better exploit the analytic capacity in this context. Although the publication is quite recent, from 2017, methods discussed are still based on traditional risk management methodologies, which can handle neither the complexity nor the current dynamism of construction projects.
Different methodologies for risk management currently exist. Traditional approaches based on reliability theory and risk management have proven insufficient ,,, and the lack of digitization in the sector does not allow the exploitation of new AI-based mechanisms. Aymerich and Turró analyzed risk control in construction projects related to transportation . They specifically focus on two aspects solved by our solution: excessive costs and delays. They highlight the lack of the industry’s capacity to capitalize knowledge from previous projects to control risks in new projects and the need for controlling risks in large capital projects. Among the main risk sources noted in the construction industry, psychological reasons are highlighted: both humans and organizations tend to intuitively assess situations too optimistically, which is the most problematic factor . The lack of high-quality information caused by insufficient data or capacity to explore existing data is also a key factor. Finally, continuous control of risks, after initial assessment is also essential . For instance, according to the Department of Transportation of California , risk management should include a risk monitoring strategy to control risk evolution.
However, there is a lack of effective tools to support construction corporations to control risks continuously and in real time. This generates a gap that will need to be filled to enable companies in the construction sector to have a much better control on their operations and related risks.
 Szymański, P. (2017). Risk management in construction projects. Procedia engineering, 208, 174-182  Doloi, H., 2012. Understanding impacts of time and cost related construction risks on operational performance of PPP projects, International Journal of Strategic Property Management 16(3), pp. 316-337.  Turskis, Z., Gajzler, M., Dziadosz, A., 2012. Reliability, risk management, and contingency of construction processes and projects, Journal of Civil Engineering and Management 18(2), pp. 290-298.  Witt, E., Liias, R., 2011. Comparing risk transfers under different procurement arrangements, International Journal of Strategic Property Management 15(2), pp. 173-188.  Aymerich, M., & Turró Calvet, M. (2011). Risk analysis, risk management and implementacion performance in transport infrastructure projects.  Megaprojects and Risk: An Anatomy of Ambition, Bent Flyvbjerg, Nil Bruzelius and Werner Rothengatter, Cambridge University Press, 2003.  Modarres, M. (2006). Risk analysis in engineering: techniques, tools, and trends. CRC press.  Project Risk Management Handbook, Second Edition. California Department of Transportation, 2007.