Improving Value and Risk Management in Construction Projects

This report provides a detailed analysis of value and risk management within a construction project, specifically focusing on a private residential building. It begins by outlining the requirements of value and risk management in construction, emphasizing the importance of environmental and economic factors, project planning, and human factors. The report then delves into hazard identification, qualitative and quantitative risk analysis, and the impact of IT on construction costs and principles. A critical analysis of risks, including value risks, is presented, followed by proposals for improvements in project value and risk management performance, such as emergency preparedness and adherence to safety protocols. The report concludes by stressing the significance of proactive risk management and continuous improvement in construction projects, highlighting the role of technology and human factors in ensuring successful project outcomes. Desklib offers additional resources, including past papers and solved assignments, to further assist students in understanding and applying these concepts.

Value and Risk
Management

Contents
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
A description and discussion of the requirements of value and risk management in the
construction projects..............................................................................................................3
A description and critical analysis of risks including those value risks associated with a
case example of your selected or assumed project.................................................................5
An explanation and discussion of your proposals for improvements that aim to improve the
performance of project value and risk management..............................................................7
CONCLUSION..........................................................................................................................8
REFERENCES...........................................................................................................................9

INTRODUCTION
Value means to fulfil all the requirement that the project demands. On the other hand,
risk management means to identify the risk and the danger than the project can incur and
control it by determining and forecasting the solution of the uncertainty that might occur. In
construction projects mainly the uncertainties occur due to heavy machines and structure
planning of the buildings. Due to which it is essential for the management to fulfil the
necessities of active risk management by having a significant and a positive impact in the
accomplishment of the project (Ahmad, Thaheem and Maqsoom, 2018). In the report, a
private residential building is being constructed which comprises of measuring the risks and
the factor that can helps in identifying the hazardous situation. Also, the improvement that
can be made in the project value by fulfilling the objectives of the task.
MAIN BODY
A description and discussion of the requirements of value and risk management in the
construction projects.
The project is of constructing the residential building for private use. The acquisition of
the property has taken a huge capital investment for the individual. It involves a high amount
of risk as well as management of the property and its working with full confidentiality and
safety. For this various prerequisites of the risk and value management are to be considered.
The decisions made regarding the project should be extensively prone to the environmental
and economic factors.
Goal: The purpose of assessing the value and risk of the construction project is to analysing
the risk that can be incurred within the project after taking all the critical decisions such as
cost, directions, measurement and many more. It will help in understanding and identifying
the risk. It enables in handling the critical and hazardous situation by minimising the
probability of occurring the negative events of the construction site. Also, through this the
other purpose of the project can be accomplished by meeting all the objective of the task
within the set time period (Ahmed and Arocho, 2021).
Project Planning: In the today time where technology plays a vital role in developing and
completion of the tasks. Likewise, it helps in construction projects also. A chart and design is
prepared by marking all the measures and divisions of the departments on the property. The
project is planned by first allocating the costs and schedule with the set time period. The costs
may involve direct and indirect costs. On the other hand, the schedule for the tasks can be

time oriented and resource oriented. It means that the schedule can be set according to the
activities that needs to be performed simultaneously or separately.
The planning is done to accomplish the predetermined goal within the timeframe. For
this, many activities are to be process with the goal oriented process in residential
construction projects. The start and finish date of the project happens to impact the products
more. Hence, it disperses correlation between the time and various type of costs (Alves and
et.al., 2019).
The project planning for these type of project is done in two pats which are project
development and design and production. In project development the land is acquired and
measured along with the influence of the eternal factors that can impact the project. Then the
zoning process is to be done before starting the project construction. The number of floors,
the building criteria, the purpose and usage of building is determined and have to compete all
these requirements in a legislative procedure. Further, after the permission, an architectural
design is prepared with a detailed design procedure for building the site. The, the production
and construction of the building starts by allocation of the costs and setting the time period
accord to the contractors and the owners. Also, the risk factors are to be considered at the
foremost priority so that the chances of the consequence can be reduced.
Human Factors: The human factors that can impact the risk of the project parameters can be
the decision making of the owners which could delay the process of making the building. The
financial capabilities of the stakeholders or management could also impact with the risk in the
technical knowledge of the owners as well. The behaviour and negative attitude of the project
manager could develop a high factor of risk by temporarily passing the random decision that
are not ought to be good for the project. This could lead to happen due to the lack of
identification of the critical and significant activities about the project. This will
insignificantly impact the planning of the project as well, which will result in the delaying the
project and non – completion of the activities. At fault of the contractors, this could lead off
the project time line to suing of the inappropriate forecasting methods during the main stage
of the project completion (Gul and Celik, 2018). Also, the construction of the building project
that could be done irrationally but with no intensity to involve the risk and value factors in it.
For this al the corrective measures are to be taken on a predetermined basis by predefining
the risk factor which could involve humans and it irrational mistakes during the completion
of the project. Other than these elements, the safety and the leadership commitments of the
managers as well as the staff and the workers working of the construction project site is very

crucial. The learning and ad construction facilities may incur an inappropriate risk which will
enforce the contractors and the owner to develop a compliance procedure.
A description and critical analysis of risks including those value risks associated with a case
example of your selected or assumed project.
Hazard Identification: It is the most important step is identifying the risk management for
evaluating the source and type of risk. Risk management should be implemented from the
start of a building project since understanding the risk source will help individuals deal with
it more effectively. Despite the fact that much analysis has been done just on risk associated
in building projects, housing developments still face a variety of hazards such as cost
overruns, schedule overruns, quality concerns, and contractual challenges, to name a few
(Kamali, Hewage and Milani, 2018). Because it comprised of construction and
subcontractor’s enterprises, designers, engineers, consultant quantity, and component
suppliers, the construction industry should be able to identify various causative factors of
dangers, their affects, and one ‘s repercussions. It is competent of representing a wide variety
of initiatives in construction site, off-shore constructions, engineering, and industrial
facilities. The fundamental goal of risk assessment is to create a comprehensive list of threats
based on events that could slow or speed up the fulfilment of goals. Risks that are not
recognised at this stage of risk management process would not be included in subsequent
investigation. Risks need to be identified regardless not on whether their cause is under
control of the entity is visible. Every risk should be examined for all major source and
impacts. All businesses should use identifying risks tools and approaches that are most suited
to the organisational mission and abilities, as well as the risks that it faces. In order to detect
risks, relevant information should be collected, including acceptable additional info, and
persons with proper competencies and understanding should be engaged. Delphi approach,
brainstorming sessions, survey judgement, checklists, influence diagram, flow chart, and
cause and effect diagrams are all common risk detection techniques.
Qualitative Risk Analysis: It allows the risk factors to be identifies through the session of
brainstorming, checklists or interviews. It involves an evaluation process for labelling the
risks with the probability of high, medium or low and identify the risk occurrences. These
techniques are identified to analyse and estimate the frequency of risks by its occurrence
magnitude (Liu and et.al., 2018). It benefits the management of risk in various construction
project such as residential construction site. It could be identified during the life cycle of the

project and the risk matrix could be helpful in order to communicate the outstanding hazards
for the project.
Quantitative Risk Analysis: These methods are utilised for major projects and are used to
analyse the impact of risks by crunching data and numbers. Decision tree analysis,
probability distribution, sensitivity analysis, Monte Carlo calculations, and other quantitative
evaluation approaches are examples. It necessitates more effort because it necessitates a large
amount of data for a precise and accurate analysis. The diversity of cost and schedule results
is influenced by two independent factors: uncertainty and identified risks. These are the
variables that we're attempting to quantify (Luo and et.al., 2019). Uncertainty is a type of
variability that exists in the absence of identifiable risks. It is produced by the factors which
are the estimating errors, the bias estimation and the inherent variability. The other element is
the identified risk in the residential construction building that will help in measuring the
cause of variability and will assist in knowing the probability of the occurrences of risk.
Risks in IT: Construction costs have changed dramatically as a result of technological
advancements in design, materials, and construction methods. Computer-aided design has
enhanced the ability to generate high-quality designs while also reducing the time it takes to
create alternative designs. Technological advances have improved the performance the
building while also reducing the time it takes to fabricate in the shop and erect in the field.
Building techniques have progressed through several levels of mechanisation and automation,

culminating in the most recent development of project automation (Maio, Ferreira and
Vicente, 2018).
The Web and corporate Intranet counterparts have been the most striking new
technology deployed to construction. The Internet is commonly used to promote project
collaboration among professionals, to discuss bids and outcomes, and to obtain goods and
services needed. Real-time videography from particular building sites is commonly utilised to
show relevant parties how development is progressing. As a consequence, teamwork,
communication, and purchasing have improved (Shao and et.al., 2019).
Due to the obvious strong growth costs of new technologies, the impact of several
technological advances on building costs have already been mixed. It is undeniable, however,
that design experts and construction companies that have not adjusted to technology changes
have been pushed out of the construction industry. Finally, works and cost can be enhanced
by implementing new technologies that have been proven to be effective from both a price
and performance perspective.
Principles: As building any property may affect the environment, so it is very crucial to
follow the protocols that are to be indeed followed by the contractors for minimising the risk.
Because the contractor's rate of return is strongly tied to the risk associated, risk has an effect
on the prices of the job. Furthermore, the anticipated risk has a significant impact on the
decision to carry out specific tasks, and the financial and contractual framework of the job.
When it is not feasible to entirely eliminate a risk, risk mitigation is the practise of
reducing its possible impact. As a general rule, the risk should be borne by the party best
equipped to manage the risk, or the consequences of the risk if it occurs. This could be the
customer or even the construction company.
An explanation and discussion of your proposals for improvements that aim to improve the
performance of project value and risk management.
Emergency Preparedness: For this the UK government has made a list of the worst
scenarios of the construction project and have made a checklist that the essential related
to that certain problems should be available at the construction sites. Also, the
employees as well as the workers should be trained for any emergency situation that
mat occur. The valuable insight for the potential hazards is given an overview and how
to deal as the front line helper in these kind of situations. Also, for better
communication and decision – making, a central command post is established for
making quick and emergency responses faster (Wang and et.al., 2019). Moreover, a

continuity plan is developed for the hazardous strikes for ensuring the safety of the
individuals that are available on the construction site at the topmost priority. Also, it
plans to establish the functional requirement that may cause minimal disruption and
monetary loss to the owner and contractors of the project. Brainstorming is a group
creativity technique by which efforts are made to find a conclusion for a specific
problem by gathering a list of ideas spontaneously contributed by its members. It can
further be explained as a tool that helps to understand what the exact issue is and how
related solutions would help the construction related business to work and function in a
market.
Brainstorming is a process of sharing new ideas and knowledge to solve a particular
problem and encourage employee to think about the solution of the particular problem
without Interruption in between and resolve the problem through their ideas. For example: If
your employee in an organization come up with new idea in relation to the advertisement of
the product this is one of the example of brainstorming. In this brainstorming activity is a
group activity they solve the problem in groups.
Helps to identify the risks and evaluate them:
1. Plan the interviews: In this company first plan the interview, company have to ready
some specific question asking for the candidate and the question should be very
efficient and based on the case studies so the interviewee share their ideas and
knowledge related to that case studies.
2. Brainstorming: In this company have to plan some brainstorming questions in
advance so at the time of interview company can ask some brainstorming questions to
the candidate so the candidate can share its knowledge and ideas and solve that
problem.
3. Checklist of risk: In this point company have to create a checklist of some few risks.
So, the company can use the checklists for some projects and take ideas of the
employees so they can solve that problem or risk with the help of that idea.
4. Affinity technique: This technique is fun, creative and beneficial exercise for the
company. In this employees in the company asked for some brainstorm case study.
Company ask employees to write case on notebook and then solve the risk in groups
by using different ideas and knowledge.

5. Cause and effect technique: This technique is used to identify causes that arise risk.
And if company identify or allocate the risk then the company can eliminate the risk
on time
Guidance and Practice: From the above report and risk management theories, it can be
identified that the risk identification is very significant for any project. The predetermined
risk could be controlled and management without harming the individuals, environment and
the project. It will help in saving the money, cost, time, material, energy and many more
elements. So, for the continuation of the project the risk and value management acts as a
procurement lifecycle. It helps to take several crucial decisions (Wuni and Shen, 2020). For
this, the risk management process should be followed. It is very important to follow as it will
give the idea to identify the risk factors which could be monitored and controlled before the
calamity. Then the risk matrix is prepared which showcase the probability and the influential
outcome probability on the project. Further, the risk response is awaited and finally the action
regarding the risk is taken for controlling and managing it.
Value Management: The next step is of the value management which will be used in
establishment of the value means to customer for the benefit of the business by maintaining
the priority management of the construction site. The determination and identification of the
organisation needs is very important for evaluating the business needs for the residential
building project. Also, choosing and approving the best choice to meet business requirements
by clearly stating and agreeing on the project's goals. The identification and deciding on the
optimal project alternative, with the help of outside advisers to clients. At all stages, a value
management strategy aids decision making (Yan and et.al., 2019). The idea of value is based
on the correlation between meeting a variety of wants and the resources that are employed to
do so. The greater the value, the limited resources utilised the better overall fulfilment of
requirements. Stakeholders may have different ideas about what constitutes value. The
purpose of value engineering is to bridge these gaps and allow an organization needs to make
the most success towards its own primary aims while using the fewest resources possible.
CONCLUSION
The conclusion that can be made from the above report is that the for constructing the
residential building the documentation regarding the management of risk should be improved

in order to increase the chance of making more consistent and predictable risks. This will
assist in eliminating the actualised risk outcome. Also the relation and commutation between
the developer and the contractor should be strengthened which will lead to improvement in
the decision making and will result in the successful project.
REFERENCES
Books and Journals
Ahmad, Z., Thaheem, M.J. and Maqsoom, A., 2018. Building information modeling as a risk
transformer: An evolutionary insight into the project uncertainty. Automation in
Construction. 92. pp.103-119.
Ahmed, S. and Arocho, I., 2021. Analysis of cost comparison and effects of change orders
during construction: Study of a mass timber and a concrete building project. Journal
of building engineering. 33. p.101856.
Alves, A. and et.al., 2019. Assessing the Co-Benefits of green-blue-grey infrastructure for
sustainable urban flood risk management. Journal of environmental
management. 239. pp.244-254.
Gul, M. and Celik, E., 2018. Fuzzy rule-based Fine–Kinney risk assessment approach for rail
transportation systems. Human and Ecological Risk Assessment: An International
Journal. 24(7). pp.1786-1812.
Kamali, M., Hewage, K. and Milani, A.S., 2018. Life cycle sustainability performance
assessment framework for residential modular buildings: Aggregated sustainability
indices. Building and Environment. 138. pp.21-41.
Liu, Y. and et.al., 2018. Promoting green residential buildings: Residents' environmental
attitude, subjective knowledge, and social trust matter. Energy Policy. 112. pp.152-
161.
Luo, L. and et.al., 2019. Stakeholder-associated supply chain risks and their interactions in a
prefabricated building project in Hong Kong. Journal of Management in
Engineering. 35(2). p.05018015.
Maio, R., Ferreira, T.M. and Vicente, R., 2018. A critical discussion on the earthquake risk
mitigation of urban cultural heritage assets. International journal of disaster risk
reduction. 27. pp.239-247.
Shao, B. and et.al., 2019. Fatal accident patterns of building construction activities in
China. Safety science. 111. pp.253-263.
Wang, Z. and et.al., 2019. Precast supply chain management in off-site construction: A
critical literature review. Journal of Cleaner Production. 232. pp.1204-1217.
Wuni, I.Y. and Shen, G.Q., 2020. Critical success factors for modular integrated construction
projects: a review. Building research & information. 48(7). pp.763-784.
Yan, H. and et.al., 2019. Risk assessment for construction of urban rail transit projects. Safety
science. 118. pp.583-594.
EXECUTIVE SUMMARY
It includes the working of business taking in account risk involved in construction of a
building and what can be various methods that would contribute in functioning of
company in long run and on large scale. It takes in account guidance and practices,
Emergency preparation and management of value being served. It focuses on goals,

objectives and project planning as well. Identification of hazards and the related risk
that are prevailing in working and running of construction company.