Any industry has its fair share of risks associated with its in-and-out operations, but managing construction risk is a whole different universe. This is mainly because there are so many variables at play for construction projects that requires proper management.
Failure to properly assess, manage and mitigate potential risk could place construction projects in jeopardy. However, with an efficient construction risk management plan, there’s a high certainty that you’ll grow and thrive with each project you complete.
An Introduction to Construction Risk Management
Before anything else, let us dive into the types of risk that need to be adequately managed in the construction industry:
- Environmental: Though Mother Nature does present a risk, we’re not just talking about the climate and weather when it comes to environmental threats in managing construction. There are also safety issues, natural disasters, and other external conditions that need to be accounted for and managed.
- Logistical: Completing projects on budget and on time is the main objective, but not always the reality. Therefore, communication issues, scheduling issues, and procurement issues can restrict a project team’s effectiveness and efficiency on the job site.
- Design: Design changes or change orders should be expected on any construction project, but improper management techniques of such can be a burden, possibly leading to extending project scheduling and extensive rework.
- Financial: While cost is a big part of any industry, significant fluctuation in market changes, material costs, and cash flow play a substantial role in separating profitability and bankruptcy. Additionally, construction operates on low margins generally, which means that contractors need to be more vigilant about monitoring financial risk.
- Labor: We all know that labor-related issues are a big challenge in construction, no matter what generation. The shortage of skilled trades workers can lead to productivity and quality issues on work sites. Additional to hiring challenges, another common problem is labor disputes.
That leads us to the question: what’s one way to help mitigate all the possible risks in construction? Technology.
The top two common factors that influence a contractor’s decision about technology are use and cost. However, when it comes to construction risk management on worksites, there are times when you have to spend money to make money.
Furthermore, consider that many benefits of technology so far outweigh its cons—you need to ensure it’s the correct type of technology that you’re administering for construction risk management.
Suppose you’re among the professionals still relying on outdated systems. In that case, it’s time to adopt the advancements in technology to streamline construction risk management and enhance operations and boost profit in the process. Here’s a look at construction technology and tools that can help get you there:
1. Mobile Technology
If you haven’t adopted mobile technology out in the construction field, there’s no better time than the present. It’s because mobile technology does more than collect data and streamline communication; it can also considerably reduce risk—and it does this by making information and data more accessible to project stakeholders and other team members.
By incorporating mobile technology into your construction operations, teams can access documents, files, and information they need with a finger tap. They can also update any documents on the go as they work, even remotely. This, in turn, helps improve job site efficiency, construction crew management, and overall decision-making on any construction project. As a bonus, using mobile technology can even help reduce insurance premiums, and when this happens, it’s a vital indicator that overall risk has been dramatically reduced. Moreover, reducing insurance premiums will benefit your company’s overall profitability, as one of your overhead costs is trimmed.
2. Cloud-Based Technology
Mobile technology solution is one thing; the cloud is another—and you can’t function mobile on project sites without being in the cloud. Cloud-based construction technologies allow project team members to make changes in real-time, as documents and other essential information are stored in one space that all users have immediate access to.
Here’s a quick look at some of the benefits of cloud technology and how it can mitigate risk on your project site:
- Accessibility: As long as you are connected to a server or have access to an Internet signal, the cloud is there to assist you. Cloud technology is perfect for construction teams working in remote areas or hard-to-reach locations.
- Visibility: The entire construction team, and not just one or two stakeholders, have access to all documents and information. In addition, they can see and make updates occur as they happen.
- Security: It’s always programmed to be secured, so all your documents are always protected.
And finally, when it comes to risk management on project sites, the cloud is especially beneficial because it permits easy documentation. With this, potential construction disputes and even legal litigation can be avoided by simply ensuring that information is being appropriately documented.
3. Building Information Modeling
Building Information Modeling, most commonly known as BIM, has already left its mark on construction project design, but bringing BIM models into mobile devices is still a work in most construction companies. Think about it this way: If BIM isn’t easy to access in the field, it can be challenging for teams to have the plans and information they need to build correctly. The lack of this essential information can potentially lead to issues on the job, extending established deadlines, and blowing up a budget.
4. Communication and Collaboration Tools
One should not underestimate the power of good communication when it comes to risk management in construction. Therefore, we highly suggest investing in good collaboration software and tools in your company. These technologies allow competitive individuals to connect on information and workflow to reduce various labor risks. Additionally, these tools allow for increased visibility for project stakeholders to strengthen accountability and, ultimately, productivity.
5. Tasks Management and Schedule Tracking
Getting off track or behind is never ideal for any construction project, especially when considering how it can open up industries to significant financial and labor issues. This is why we strongly recommend investing in applications and software designed to enhance collaboration and monitor tasks and project schedules. Not only does doing so help manage construction risks, but it also helps teams make better quality decisions on how to carry out certain aspects of the project, especially if they need assistance getting back on schedule. What’s more, is these construction tools also aid in improving accountability between the members of the project.
6. Automation Tools
Traditional manual data entry isn’t just daunting and time-consuming—it also leaves construction teams open to the significant risk brought by human error. It doesn’t matter how detail-oriented your employee is or how many times you double or triple-check your data. Mistakes are still bound to happen when their information is entered in this conventional manner. It’s why you should never let your company rely on manual data input, as one seemingly minor mistake could lead to a train of problems in the future.
The good news is there are various quality construction tools to help automate and streamline work operations and support data-driven companies. Automation can also help enhance construction workflow and lead to higher levels of effectiveness and efficiency.
7. Machine Learning and Artificial Intelligence
Can you predict the future of construction project risk? Being proactive—and not reactive— plays a big role in construction risk management. Artificial intelligence and machine learning can help define Jobsite risks that humans might not be able to point out and assess. While the construction industry has yet to adopt the technological advances of many other industries, these are undeniably the future of construction. Machine learning and artificial intelligence are surely going to shape the future of the industry.
8. Collaborative Technology Ecosystem
So you’re ready to begin the construction job, and all of your software tools are in place. Now the question is, do your software tools talking to one another? Don’t put your data on different platforms, as this can create more unnecessary confusion than unison. That’s the considerable value of construction scheduling software like Pro Crew Schedule, as it can help you connect your data to ensure a more efficient and safer job site. Pro Crew Schedule is intentionally designed to help construction teams quickly access data, communicate with each other and automate daily tasks.
Take Charge and Mitigate Construction Risk Management
We highly suggest you take a proactive approach to construction risk management, as the alternative option has the potential to not only slow project progress but cripple a company altogether. It’s why risk management shouldn’t be considered as an afterthought but prioritized and adequately managed with the right software and tools. While some construction risk management advancements come at an upfront price, the long-term savings in overall productivity, insurance premiums, worker’s compensation, and stress are sure to make any investment in construction technology worth it in the long haul.
