A construction–specific extension to a standard project risk management process

Abstract

Project processes are affected by risks in many ways, and this is particularly true in today's highly competitive world. Construction projects usually take much longer than typical projects in other sectors. In this sector, it is important to follow some kind of standardised risk management process. There is much literature on different approaches to project risk management, and this paper reviews the most prominent sources that suggest procedures that are widely used in practice. Nevertheless, standard risk management still faces some shortcomings, and professionals call for a more sophisticated solution. This research aims to expand the general risk management process based on the frameworks of the prestigious stand-ardisation institutions and associations (mainly on Project Management Institute's (PMI's) risk management standard considering the approaches of Institute of Risk Management (IRM), National Forum for Risk Management in the Public Sector (ALARM), Association of Insurance and Risk Managers (AIRMIC) and International Organization for Standardization (ISO), as well as Association for Project Management (APM)). The suggested two new processes are justified by in-depth interviews conducted with interviewees working on large and complex construction projects, and are supported by a thorough literature review. The novelty of the research is that these two processes added to the standard processes, namely, risk analysis verification and validation and risk plan experimentation. The research expectedly improves the risk management process in the construction sector and emphasises the need to clearly articulate and communicate the organisation's risk appetite and the necessity for risk management training to employees. Therefore, the research reconfirms the concept of project risk management by the standards, and justifies the proposed new phases.