Managing construction risk
The risks faced by the construction industry are numerous and varied but in the simplest terms, “risk is the effect of uncertainty”. In a recent webinar on ‘De-Risking Construction’ (watch below) we brought together a panel of experts and industry leaders to discuss how organisations deal with and mitigate risks in the construction process, specifically where risk and technology intersect.
Early in the webinar, Matthew Nicholas from ProBuild highlighted how risk, and the potential impact, are subjective – they depend on the circumstances of the person assessing the risk.
Indeed, the potential of a loss of £1000 will pose a much greater risk to a small, one-man company than it would to a multi-million pound conglomerate. And so, the many risks which could be highlighted on a construction project will have a greater or lesser impact depending on the company making the assessment, and therefore may or may not be classified by them as a risk.
The real test is how the identified risks are dealt with and this will give a company the edge over their competitors by being able to pre-empt and deal with potential risks early on. As Matthew said in the webinar, “Risk management is the practice of understanding uncertainty and taking action based upon tolerance and appetite for that risk.”
Unfortunately, the construction industry tends to work in silos, and with the common occurrence of disputes and conflict, companies tend to keep their risk management strategies shrouded in secrecy. A degree of transparency and collaboration within this area could go a long way to de-risking the industry.
Watch the ‘De-Risking Construction’ webinar below
Digital transformation – construction software to reduce risk
Digital transformation in the industry is a much talked about area at the moment, with the Covid-19 pandemic accelerating the move towards digitalisation. While some could see the introduction of new technologies as a risk, partly due to a fear of the unknown, this new software can actually help to reduce uncertainty and therefore reduce risk.
Companies embracing secure, cloud-based software and connected construction management solutions are gaining a competitive advantage over their peers. That’s not to say digitalisation comes without risks of its own. As pointed out by Andrew Tucker, Senior Product Manager at Viewpoint, cybersecurity and compliance are two major risks which need to be considered.
But when you consider the advantages of using a connected software solution – more accurately recorded data, immediate access to data and various reports and assessments available at the touch of a button – the benefits in reducing traditional risk far outweigh any negatives.
Having the data available to you, and then organising and using it in a useful manner, are two different things however. Data can be recorded from several different sources for the same aspect of a project, and that data needs to be sorted and aggregated in order to find the one source of truth.
Only by doing this will you truly be able to reduce your level of risk. Software like Payapps, provides that one source of truth for a specific area, in this case supply chain applications for payment.
So, are digital solutions the ultimate answer for de-risking the construction industry? Of course not. Construction is such a multi-faceted industry that one solution will never be able to cover all bases. However, digital software can go a long way to begin the journey of reducing risk.
Accurate, up-to-date information at your finger tips allows for educated decisions and informed action. A software solution not only stores the data for you but provides consistency and visibility across the board… a formidable power tool to have in your kit!
Complete the form to watch the webinar – ‘De-risking Construction’