I would like to express my gratitude to Professor Chitra Weddikkara and CSCT Faculty for providing me with all the facilities required during this research.
The priority of risk management in the construction sector is growing increasingly owing to the high-risk existence of the business, the intensely competitive market and the avoidance of adverse effects on project targets such as time, expense and efficiency. Regardless of the scale of the project, it is noticeable that Risks have a major effect on building ventures. Risks are known for future events which are unpredictable and uncertain. Risk will affect project both negatively and positively. Current day the role of the profession Quantity surveyor and quantity surveying is recognized to handle and monitor the budget of the building project. During the quantity survey process, he is one person accountable for obtaining and recognizing the whole life cycle of the building project, such as technological factors, project management, cost control, and even liable for project risk management in relation to this analysis. This literature review highlights risks linked with construction projects, how to involve quantity surveyors in decision-making from initial project level to work site level, risk evaluation techniques for risk management. And also determine how defined data may be utilized by Quantity Surveyor to reduce project expense and achieve strategic goals with expected time and quality. The major goal of this review is to define the risk factors in faced in the construction industry and to examine whether the quantity surveyor performed cost forecasting and cost management of Defined Risks building projects.
Keywords: Risk Management; Construction Industry; Quantity Surveyor Performance
Project risk management is, controlling the risks which can affect the particular project in a proper methodical way in order to maximize its profit when undertaking a project. But eliminating all risks is not a possibility. Only thing that can be done is properly managing them (Michael, 2006). No matter the size of the project, risks has a huge influence in it. In any particular construction project, there can occur various project specific risks which cannot be prevented (Hughes, Will, Champion, Ronan, Murdoch & J.R., 2015). Risks can be recognized as unpredictable and uncertain future events. Quantity surveying has become very popular over the years. And it’s vital for a Quantity Surveyor to acquire a proper understanding and about technical aspects, cost handling, project management and overall having a certain understanding about the total cost of the whole life cycle of the project (Towey, 2017). The probability of a project succeeding can be increased up to a considerably high value by ensuring the completion cost effectively and in a timely fashion, and identifying the risks using risk management plan and understanding them all throughout the process is a necessary parameter which helps the successful completion of the project (Singh, 2017). So when managed poorly, the result could affect the overall performance of the construction project as well as the practice of quantity surveying. Construction projects can become very complicated with most of the uncertainties that can occur (Surahyo, 2018). Each and every party involved in the construction project can be benefitted by considering the uncertainties and risks via a risk management plan (Baxter, 2011).
This study was conducted in order to identify the risk in the field of construction and to obtain a clear and overall understanding about the influences caused by the particular risk and at the same time to acquire a comprehensive awareness of the process and methodology which is used in managing those risks. And in this, the risks which are intertwined with the construction
project is identified and at the same time, it will be discussed how the Quantity Surveyor involves in solving these risks which are occurring all throughout pre-construction stage to post construction stage. And the evaluation methods which are used will be identified. So it is necessary to always assess risks, and implementing management practices in an efficient manner, in order for the construction project to succeed (Hopkin, 2013). So during a construction project, when assessing and managing risks is done properly, it becomes easy to achieve project goals in the planned time period. The main task of the Quantity Surveyor is controlling and managing the budget of a construction project (Towey, 2017). So in order for a construction project to be completed with a minimal cost and wastage, proper risk managing methodology should be used. And reducing the cost, using pre-meditated time, the quality of work, and most importantly it will be discussed how the Quantity Surveyor would use identified information and details in order to reach the project ambitions properly.
A risk can be defined as an unexpected situation which happens in a random time, if something like this happens, it directly affects the outcome of the project (RICS, 2015). Generally, in the construction industry it always is a possibility for the project to be exposed to frequently undesirable, unexpected, unknown, and often unpredictable situations. Even though this unpredictability is not limited only to construction projects, naturally these unexpected scenarios have a significant effect more than it has on other industries. A risk can be defined as a measurement of the potential for a loss. Moreover, when the construction project gets bigger and more complex, the effect of risks goes higher as well. As construction projects are exposed to different sources of risk, these risks affect the quality, cost, duration and safety of the project. Managing Risks should be considered as a serious business. Every risk should be managed. Exposing the project to a possible loss can be considered as a risk (Suretyleran, 2014). When risk outcome is considered, it can be better or worse than the expected outcome. Project Specific risk management strategies should be used for different projects.
Quantity Surveyors are specialists in managing cost and value of the construction industry (Towey, 2017). Their responsibilities encompass give guidance to clients in use cost and value insinuate of design decisions and the governing of construction costs. In most projects, much focus is placed on cost management, especially regarding the whole life costing (prendos, 2020). Project managers should take or suggest actions that eradicate risks before they happen, or bring down the ramifications of risks or uncertainties, and manage them if they occur when possible and cost-effective (Nigel J.Smith, Tony Merna, & Paul Jobling, 2014). They try to reduce project costs and increase the value of money, while trying to achieve the desired standards and quality. Quantity surveyor can participate in process of risk management more efficiently using their estimation and analytical capabilities. It is concluded that a realistic prediction is an estimate that takes into account the risks and uncertainties that can be estimated from experience and prediction (Nigel J.Smith, Tony Merna, & Paul Jobling, 2014). A quantity surveyor should be able to perceive and distinguish the root cause investigation in the risk and reduce them well.
There are risks popping up in every project, so by managing those risks properly, money and time can be saved immensely. Barger (2014) stated that risk management contains four key components: risk identification, measurement and analysis, risk treatment, and evaluation (Barger, 2014). These particular risks should be managed and controlled properly by identifying, monitoring and assessing them (RICS NRM 1 – Order of cost estimating and cost planing for capital building works, 2012). In this detailed literature review about risk management in construction industry, risk problems, ethics and governance, contractual issues and models of solutions are discussed. Risk management has gained a significant place in the industry as it considers all threats and opportunities (RICS, 2015). In order to properly manage these risks, it is very important to identify all the possible risks during the earliest stages of the project (Surahyo, 2018). Chapman (2011) mentioned that all risk management process framework states that risk events (upside and downside) must be identified at the outset of the activities (Chapman, 2011). Furthermore, Singh (2017) stated that in a risk management plan, in that particular process, the steps mentioned risk identification, risk assessment and analysis, risk control, risk cost allocation, risk monitoring, risk planning should be included in project organization documents (Singh, 2017).
Risk identification is the first stage in managing the risk. Wolke (2017) stated that only the risk can be planned and controlled which can be identified or measured (Wolke, 2017). Raftery (2003) stated that risk identification is, using the experience to the full extent and using all the information that can be found when making a decision (Raftery, 2003). Risk management is most efficient if used at the early stages of the project to identify and manage risks. It should be applied from the beginning to the use throughout the project cycle that is (RICS, 2015). To identify project risks, it is a smart way to use Risk Breakdown Structure (RBS). The RBS identifies the major seven risk environments, following examples, according to RICS Management of risk, 1st edition 2015. (RICS, 2015). For a responsible character of the project cost and expense, the risk identification process may involve a quantity surveyor (Towey, 2017).
There are many application frameworks for identifying and structuring the risks. All the responsible participants in the building sector join together one place and identify possible and current risks by offering their suggestions regarding particular project (Ghazaryan, Brainstorming as a Risk Identification Technique for Scrum, 2017). Interviewing professionals and getting their insights and experience on different issues occurring in the project will be a huge support in preventing or resolving previous project problems repeated throughout the project (Chapman, 2011). Chapman (2011) suggests that the SWOT analysis of the action plan should be used as a review tool prior to important decisions, while the decision fits what the analysis suggests (Chapman, 2011). Project risk diagramming is a useful technique for identifying and responding to certain risks (Singh, 2017). Tree diagramming methods that can use Quantity Surveyor to classify risks are considered in this research paper. Ishikawa diagrams sometimes known to as Fishbone diagrams. The word fishbone comes from the visual representation of it. The diagrams originally created by “Mr. Kaoru Ishikawa” back in Japan in 1968. It also uses possibilities for the prevention of quality defects (Singh, 2017). Relevant risk effects are described on
the horizontal axis, and risk causes toward each risk effects are defined (macadamian, 2017). Quantity surveyor responsible in project character will actually use PFD to display success of the activity diagram in risk management process to the operation diagram process (Jorion, 2010).
Krause (2006) noted that the most frequently used risk analysis approach combined information on the loss and probability (Krause, 2006). The key purpose of this process is to allow the identified risks a priority (Singh, 2017). The quantity surveyor aims to find solutions to the more issues of using qualitative risk analysis (macadamian, 2017). Wolke (2017) stated that as a basis for building up a quantitative risk management, several definitions and delineations for a total concept are also required (Wolke, 2017). In the Quantitative Risk Analysis Framework, it is suggested technique and method to use estimating each decision Expected Monetary Value and creating decision tree (Dash, 2017). On the following formula, EMV simply can show. EMV=Impact X Probability. It is recommended to use the EMV method and take final decisions, as this method is straightforward and transparent (Allan Ashworth, Keith Hogg & Catherine Higgs, 2013). In Quantity Survey Experience “Decision Tree” can be included in the Risk Assessment Process to evaluate processes (Dash, 2017). Simulation Monte Carlo will use Quantity Surveyor to clearly see all the potential consequences of the actions and determine the impact of risk, providing for improved decision taking under uncertainty (Singh, 2017). Sensitivity Analysis (SA) do basically determines uncertain project incidents that will significantly impact the result of the project (Jackson, 2000).
Hopkin (2013) suggest that the Planning the components of the risk response starts with consideration of the range of available responses. Risk responses are also often called terminating, treating, transferring, projects are as follows; Risk Avoidance, Risk Transfer, Risk Reduction (Wolke, 2017). The Quantity Surveyor will provide the project manager or client specific guidance to avoid these incidents using their expertise in risk assessment and analysis (Towey, 2017). Transfer of identified risk is a successful solution for dealing with the exposure to financial risk (Krause, 2006). Barger (2014) suggested that reduces risk by eliminating gaps and increasing compliance (Barger, 2014).The quantity surveyor should check the efficacy of risk control strategy and maintain the risk register at regular intervals. (Hopkin, 2013). It is necessary that monthly progress reports be identified and objectively analyzed by quantity surveyor, such analyses and the expected responses to reduce, eliminate or reassign (transfer) the risks that retaining is avoidable / not desirable (Edwards, 1995). It is officially named a Register of Risks. Chapman (2011) stated that as a basis for building up a quantitative risk management, several definitions and delineations for a total concept are also required (Chapman, 2011). It will be best if any guidelines on how to present this evaluation to participants is provided. To this end risk registers are often used (RICS, 2015).
To summarize, since risk is defined through unpredictable, unforeseeable occurrences. Risks will assert huge differences in construction project cost, quality and time duration. In these modern times, the quantity surveyor has a more essential role in risk management in construction projects as being one of the main responsible character of managing project costs. Risk management method may define the three key components as: Risk Identification, Risk Analysis and Risk Response. Those three components of risk mitigation and how this method may be involved by Quantity Surveyor are systematically analyzed in this research. And risk identification also is the first step in the process of risk management. But the identification of all the risks in a project is quite complicated. The RBS describes possible risk factors in seven risk situations, such as natural, economic, government, social, client, construction, project, according to RICS Risk Management, 1st edition 2015. Use of risk breakdown structure (RBS) to classify project risks for quantity surveyor is recommended.
This research describes and defines the risk characteristics of contemporary construction environment and investigates how to engage the quantity surveyor of cost forecasting and cost management of building projects. The quantity surveyor should have experience of frameworks for defining risks and structuring them. Brainstorming, utilizing Expert Systems / Previous Experience, using SWOT Analysis, interviewing, utilizing Tree Diagram Methods are several mechanisms that can be considered by quantity surveyors to define risks in construction. Upon defining risks, the quantity surveyor needs to use suitable and accurate method of study to be identified and implemented to risk study. Risks, such as qualitative risk analysis and quantitative risk analysis, may be analyzed by two methods. The use of diagramming approaches is a quick and reliable strategy for identifying and responding to project risks. In this literature review, Quantity Surveyors may use Process Flow Diagrams, Ishikawa (Fish bone) Diagrams, and Influence Diagrams to understand the risks. The risk has been estimated by every decision taken in the construction sector. Monte Carlo simulates one of the strongest quantitative risk analysis methods that can be used by Quantity Surveyor clearly to identify the potential consequences of future actions and determine the risk impacts. Under uncertainty this method allows for better decision taking. Risk reduction, risk transfer and risk avoidance, and are the three forms “Project Management Institute” has proposed to react to risk in projects.
This Research has understood that Quantity Surveyor has an enormous role to play in the management of construction risk. However, quantity surveyors have to link the gaps between the techniques and theories employed in the phase of risk management. Quantity Surveyor wants to ensure that risk management strategies are applied as per the requirements. This research has established the need to develop Quantity Surveyors in practice and inform clients as an essential part of project performance in the gains of applying risk management practices.
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