Assess Project Risks Research Articles

Development of a New Method for Assessing Project Risks in Sustainable Building Construction Projects in Developing Countries: The Case of Jordan

Sustainable buildings contribute significantly to achieving sustainable development and provide many benefits. However, sustainable building construction projects are riskier than traditional construction projects. Thus, this research aimed to identify and assess the risks in sustainable construction projects in Jordan based on their probabilities of occurrence and impacts on time and cost. For this purpose, a literature review and structured interviews were performed to identify the risks. Additionally, questionnaire surveys were conducted, and the relative relevance index and analytic hierarchy process were utilized to assess the probabilities and impacts of these risks on time and cost. After that, a focus group discussion was conducted. According to the the risks’ probability and impacts on time and cost, the top-scoring risks include changes to the original design, budgeting inaccuracies owing to a lack of experience with sustainable building projects, additional costs incurred as a result of the use of sustainable building construction materials and equipment, inadequate or inaccurate sustainable design information, insufficient funds from clients, inadequate project planning for a sustainable building project, a tight project schedule for a sustainable building project, and insufficient identification of sustainable construction’s scope. This research contributes to the body of knowledge and practice by providing a novel integrated method for assessing risks in sustainable building construction projects in Jordan.

Модель управления трансграничными проектами в строительстве на базе сквозной оценки проектных рисков

The article aims to determine the requirements for a new conceptual model of project management, which allows for the systematic implementation of artificial intelligence technologies to prepare and make management decisions at the accelerated pace of industry development, and to design the model. The methodological basis for the study was the theory of portfolio management and the systems approach to management. Working methods are narrative analysis and system synthesis in order to overcome the main problems that reduce management efficiency. As a result, a system of integration control buses in management has been proposed, introducing end-to-end hierarchy and relational interconnection of project indicators at all stages of the life cycle using digital scenario modeling techniques and allowing to organize the presented system model of project management. The mechanism for monitoring and controlling project risks when managing integrated systems and elements is shown, including the use of a universal project control tool for organizing external digital control using a methodology for identifying and assessing project risks, expressed in target assessment indicators, analyzed by creating a digital twin of the object. A model for managing the multidimensionality of design tasks based on the integrated use of neural networks is described. The potential for the development of a business ecosystem for project management is shown to make it possible to make predictive value-oriented management decisions taking into account risk management. The theoretical results of designing a system model of project management can be used as technical specifications for creating a software product for the management of various areas of project management. Keywords: system model of project management, risk management, end-to-end management bus, development project management, cross-border construction, information modeling technologies, neural networks.

The Nexus Between Construction Contract Risk Assessment and Big Data in China

The construction market in China is currently showing an increasing trend in terms of project size, complexity, and technical difficulty. With large initial investments and long capital payback periods, construction projects are vulnerable to the external environment during development and risk control is particularly important. Contracts are at the heart of project management and every step of project development revolves around the content of the contract signed by the contractor. Signing contracts to protect the rights of both parties has become the most effective way of controlling project risk. And with big data technology being rapidly developed and widely used, and the amount of data created and accumulated by the internet growing exponentially, big data has the potential to be used for analysis, forecasting and decision making in the construction industry. The aim of this study is therefore to develop a risk identification list for construction project contracts in China, to score the risks within the list according to their incidence and importance, and to find practical applications of big data technology in contract risk assessment. To achieve this goal, this study used qualitative research and in-depth interviews with experts within the Chinese construction engineering industry. The results of this study form a list of risks in Chinese construction contracts, indicating that late payment and government intervention are the most important risks in Chinese construction contracts. This study also identifies TianYanCha, a commonly used big data enterprise risk identification platform in China, which provides big data support in three areas: evaluating owner integrity, enterprise risk identification, and owner relationship knowledge. At the practical level, this study helps contractors to assess project risks and improve contractual contents during the preparation phase of construction projects, thus improving the success rate of projects. At the theoretical level, this study fills the gap in contractual risk assessment for construction projects in China and provides insights for subsequent risk assessment of construction projects based on the contractor's perspective.

TRANSFORMATION OF VALUES OF THE HIGH TECHNOLOGY PROJECTS FROM A VUCA TO A BANI ENVIRONMENT MODEL

The article is dedicated to the study of impact of a BANI-world conditions to implementation of the high technology industrial projects and in particular of the nuclear industry projects. The purpose of the article is to analyze tendencies of changes of different factors related to the high technology nuclear project implementation against the changing conditions of the environment. The object is the project management methodologies in the BANI environment. The subject is theoretical analysis of the values differentiation in between the VUCA and BANI worlds, key aspects of BANI impacting implementation of the nuclear projects. Tasks to be solved: to analyze the transformation from the VUCA model to the BANI model, to present values and their differentiation as the basis for survival in the new world order, to develop a method for assessing project risks in the BANI environment. Methods: practical empirical analysis of nuclear project risks in comparison with BANI-model forecasts, applied research, project risk management methodology, probability theory. The following results were obtained: the differences between the values of s VUCA and BANI are determined, an understanding of the general changes that have arisen due to the functionality of the environment is provided, the project management methodology applicable in the BANI environment is analyzed, a qualitative and quantitative risk analysis based on BANI projections is implemented on the example of a nuclear project in Ukraine, and the grounds for determining the most influential BANI forecast are proposed. The main results of the research are identification and analysis of values and their differentiation in the process of transformation from the VUCA to the BANI world, proposals for the project management approach which could cover the needs of the nuclear project and the consequences of this transformation. To estimate risks, it was proposed to use qualitative and quantitative methods of risk assessment. The case study of one of the nuclear projects in Ukraine, and a mixed classic-Agile methodology for the management of the nuclear project was performed. Conclusions: risk management of the nuclear projects has to be carried out based on the impact of the BANI-projections to identified risks.

RISK MANAGEMENT IN THE IMPLEMENTATION OF PROCUREMENT PROCEDURES FOR THE NUCLEAR POWER PLANTS CONSTRUCTION

In this paper, the authors consider approaches to risk management in the nuclear industry and carry out a risk analysis in the implementation of procurement procedures for the nuclear power plants construction. The problem under study is relevant on the scale of the construction of typical large industrial facilities, goods, works and services for which they are supplied through the public procurement system. This study is significant both in the practical field of application of existing methods for assessing project risks, and in the theoretical field of studying various combinations of methods for qualitative and quantitative risk measurement. The risk analysis was carried out on the basis of data on equipment purchases made during the construction of the Leningrad NPP-2. The authors made a forecast of the delay from the date of delivery of equipment under the contract. To develop recommendations on the formation of a temporary reserve for the supply of equipment, three concluded contracts for the supply of equipment for the construction of power units of the Akkuyu NPP (Turkey) were selected. As a result of the study, recommendations were formulated for risk management of the NPP construction project implemented through the public procurement system.

Assessing Project Risks

Assessing Project Risks

The interaction between non-technical and technical risks in upstream natural gas project schedule overruns: Evidence from Australia

Upstream natural gas projects are extremely complex and encounter a range of non-technical risks (NTRs) and technical risks (TRs) that frequently get in the way of timely project delivery. Despite their economic and social importance and the massive investments underpinning them, these projects are frequently plagued by significant schedule overruns. Risks are considered during project planning, but the interactions between NTRs and TRs on project performance remain largely anecdotal and theoretically underdeveloped. In this paper, we apply structural equation modelling to data collected from natural gas projects in Australia to empirically investigate the relationships between NTRs, TRs, and project schedule delay. The results indicate that NTRs are much more significant than TRs in influencing delays, and have a stronger influence on TRs, thereby exacerbating delays. The moderation effect of project complexity related to project size is also found to have a significant effect on the relationship between risks and delays. These findings provide insight on the direct, indirect, and mediating effects of risks that decision-makers should take into consideration when assessing project risks. By shedding a useful amount of new light on these interactions and complexities, this contribution will deepen the theoretical understanding of these phenomena and help practitioners to improve project schedule performance within the extractive industries.

System of Comprehensive Assessment of Project Risks in the Energy Industry

The article proposes to consider the problem of comprehensive assessment of project risks as applied to the energy industry. The authors of the research focused on the description of the applied solution. A real investment project on replacement of a bark boiler at Mondi Syktyvkar enterprise was chosen as an object for testing the results. We proposed to divide the risks accompanying the project into 2 categories: risks for which there is necessary and statistical information for their quantitative assessment and risks for which this information is absent. As a technique of a quantitative assessment of risks from the first category it is expedient to apply a method of Simulation modeling of Monte Carlo. In this case, the authors of the article conducted a significant analysis of existing methods for assessing project risks and the choice of the Monte Carlo methodology is due to the practical orientation of the study. In practice, the real enterprise is quite problematic to use more complex methods of assessment, such as methods of Real Options or methods of fuzzy logic, neural networks, etc. As a method of qualitative risk assessment (from the second category) the method of expert evaluation with subsequent calculation of risk premium in the discount rate was chosen. This method is common in practice and easy enough to implement. According to the results of the analysis (statistical and expert) the most dangerous risks of energy projects were identified: Production and technological risks (the risk of choosing the wrong technological scheme, the risk of reducing the quality of internal controls, the risk of incorrect calculation of the design capacity of energy production, the risk of industrial safety), security risks (the risk of hacking attacks on information systems of energy enterprises), as well as country risks. Among the most influential risks (based on the analysis of their impact on the main technical and economic indicators of the project) are: the risk of rising prices for purchased gas (fuel), the risk of high volatility of the dollar exchange rate. The results of the study were used in a real project and the risk assessment methodology was implemented in the project activities of Mondi Syktyvkar enterprise.

A simulation-based risk interdependency network model for project risk assessment

Project risks are mostly considered to be independent in risk management, ignoring interdependencies among them, which can lead to inappropriate risk assessment and reduced efficacy in risk treatment. This study introduces a new Monte Carlo simulation-based risk interdependency network model to support decision makers in assessing project risks and planning risk treatment actions more effectively. The Interpretive Structural Modeling method is integrated into this model to develop a hierarchical project risk interdependency network based on identified risks and their cause-effect relationships. The Monte Carlo method is used to model the stochastic behavior of risk occurrence and to generate numerous possible risk scenarios through simulation. To evaluate single risks and overall project risk level while considering risk interdependencies, five major risk indicators are therefore proposed, namely simulated occurrence probability of a risk, simulated local and global influence of a risk, as well as total risk loss and total risk propagation loss of a project. An additional sensitivity analysis is also included to examine the effects of input uncertainties of this model on risk assessment results. Moreover, two case studies are provided to demonstrate the application and effectiveness of the proposed model. The findings accentuate the significance of considering risk interdependencies in project risk assessment and validate the model's robustness and feasibility in risk management of projects with complex interrelated risks.

Identification and assessment of risk in construction projects using the integrated FMEA-SWARA-WASPAS model under fuzzy environment: a case study of a construction project in Iran

Nowadays, focusing on risk management is one of the core objectives of any organization. Failing to assess project risks during the planning stage could be hazardous throughout the entire project lifecycle. Therefore, risk assessment is so important and various methods have been developed for it. One of the most important risk assessment methods is Failure Mode and Effects Analysis (FMEA). Despite the widespread applications of this method in various industries and organizations, FMEA is associated with some shortcomings that can lead to unrealistic results. In order to identify and evaluate the risks affecting construction projects and cover some shortcomings of the FMEA technique suggested an integrated model based on FMEA, Stepwise Weight Assessment Ratio Analysis (SWARA), and Weighted Aggregated Sum Product Assessment (WASPAS) methods under fuzzy environment in this research. To this end, a case study about the construction projects of the Iranian Road and Urban Development Organization is presented to illustrate the potential benefits and application of the proposed integrated approach. The results suggest that the new integrated model is more capable and accurate in identifying and prioritizing risk compared to the conventional FMEA technique and can provide useful information to help manage the risks of construction projects.

Investment and Construction Projects Management by Monitoring the Ecological State of Urban Space

The authors carried out the analysis of the current state of the Russian investment and construction market, theory and practice of project analysis, which made it possible to determine the specifics of housing construction projects development during the crisis and highly uncertain external and internal factors of its implementation. Urban agglomerations development is a continuous process of transformation of the existing urban environment, where daily living activities are carried out, connected with changing social requirements. It includes various components of the integrated organization of the city’s space: ecological, functional, architectural and artistic, socio-cultural aspects, as well as the organization of population activities. At the same time, taking into account the peculiarities of the city as a whole, urban development, in particular, is today the dominant task in urban planning practice. The mechanism of indicative risk assessment was used to develop the author’s matrix for the processing of specific project risks during the crisis. Values of factor risk premiums are based on it, and they are taken into account when calculating the project efficiency. The use of this methodology makes it possible to identify and assess project risks with minimum resources, correct the parameters of the project’s commercial efficiency and, taking into account the results obtained, draw a conclusion about the feasibility of further project implementation. One should choose a certain classification of environmental risks focusing on the goals and objectives of projects. This allows choosing the right methodology for assessing environmental risks at the stage of information collection and analysis, which in the future will make it possible to make the most complete and balanced decision. The use of the proposed recommendations makes it possible to take into account the impact of commercial, financial, legal, production and management risks during the crisis and, as a result, more accurately calculate the commercial efficiency of a development project.

Assessing project risks from a supply chain quality management (SCQM) perspective

PurposeProject-driven supply chain risks pose a significant threat to the success of complex development projects, in terms of achieving key performances such as quality, time and efficiency. The purpose of this paper is to adopt a supply chain quality perspective in order to explore and better understand the unique attributes of risks associated with project-driven supply chains for continuously improving the quality of both processes and products.Design/methodology/approachTheoretically grounded in the framework of Bayesian Belief Networks and Game theory, this paper develops a structured process for assessing and managing risks in project-driven supply chains. The application of the proposed approach is demonstrated through a simulation case study conducted on the development project of Boeing 787 aircraft.FindingsThe conflicting incentives amongst stakeholders in a supply chain can jeopardise the success of a project and therefore, assessment of this category of risks classified as “Game theoretic risks” needs special consideration. Project-driven supply chain risks pose a significant threat to the success of complex projects. The results of the study clearly revealed that without mitigating the game theoretic risks, the main objective of timely completion of the Boeing 787 project was not materialised. Further, the lack of management expertise was the major factor contributing to the overall project costs including cost of quality.Originality/valueThe proposed process and analyses present a significant and original insight in terms of capturing the key determinants of both product and service quality such as product performance, convenience and reliability of service, timeliness, ease of maintenance, flexibility, and customer satisfaction and comfort. Propositions are developed for ascertaining the significance of information sharing in a project-driven supply chain, and a fair sharing partnership is introduced to help supply chain managers in managing game theoretic risks in order to achieve the goals of quality, time and efficiency.

Improving the financial investment system as an object of business economics

Subject. This article explores the economic relations of economic entities concerning effective investment activities, combining elements of investment control and assessment of related risk. Objectives. The article aims to analyze and logically substantiate the stages and types of investment activities of enterprises and investment projects in-progress, as well as define a methodological approach to assessing project risks. Methods. For the study, we used a structural and logical analysis, and deductive reasoning. The methodological base of the study is based on the principles of the theory of finance, investment and risk management. Results. The article defines stages of assessing the financial condition of enterprises and proposes a methodological approach to assessing certain risks of an investment project based on the risk ranking by degree of probability and significance of an event through applying the expert assessment method. The article also presents a practice-oriented risk map for investment projects and clarifies the concept of Investment Control. Conclusions. The results of the study can help address the significant for the Russian economy issue of stimulating and developing investment activities at enterprises, as well as implementing and evaluating the effectiveness of investment projects at the micro-and macro-levels of the country's economy.

Організаційно-методичний механізм оцінки проєктних ризиків підприємств будівельної промисловості

Організаційно-методичний механізм оцінки проєктних ризиків підприємств будівельної промисловості

Project risk management of the construction industry enterprises based on fuzzy set theory

The construction industry is a crucially important element of the Ukrainian economy, since its development and performance affect other industries. The economic recession consequences and the unforeseen recent events, caused by different types of risks, have adversely affected the construction industry development and necessitated the search for modern methods of risk management. The study is based on a sample of five projects from five construction industry enterprises and covered the period of 2010–2018. A set of project risks, investigated by the group of experts, was analyzed based on fuzzy set theory, and included seven phases of the fuzzy set model construction to assess project risks of construction industry enterprises. Based on the identified elements of a fuzzy set model and a set of significant project risks, a value classifier of significant project risks for construction industry enterprises was developed. This allowed to estimate the current values of project risk indicators and to identify them by levels of their fuzzy subset membership. Besides, a classifier for the quantitative assessment of the total project risks level for investment projects was developed, which allowed estimating the value of the aggregate indicator. In order to improve the existed methodology, the study suggested introducing probabilistic values for the risk of project failure depending on the significance of the overall project risks. Accordingly, the paper identifies the probability of significant project risks simultaneous occurring during the project implementation. However, the higher the likelihood of risk, the higher the probability of investment project failure.

Risk Analysis of Construction Project Life Cycle Information Management Based on System Dynamics

Information is the chain in which the project management system operates. When assessing project risks, traditional methods often have difficulty balancing the integrity of the project. This paper analyses the risk elements of information management in the whole life cycle of construction projects, attempts to use the system dynamics method to establish the causal diagram of each stage, and describes the impact of information risk elements on project schedule, quality, cost and safety. The results show that the negative feedback loops of the whole system is mostly. Besides, the influence between the targets can be transformed, and the system itself can achieve a relatively stable state through self-regulation.

Особенности идентификации и экспресс-оценки рисков инвестиционных проектов в современных условиях

Objective: When assessing the risks of an investment project, it is necessary to take into account the uniqueness of each project, which requires the search for completely new solutions, the application and combination of various tools and assessment methods for the effective implementation of the project. The objective is to develop and test an algorithm for express risk assessment of an investment project using an integral risk factor. In order to achieve this the following issues are considered: the development of the risk theory and the main stages of its development, the modern concept of risk and risk classification in the context of investment projects, modern methods for assessing the risks of investment projects and their problems. Next, the concept of an integral risk factor is introduced and an express assessment of risks of a local investment project is carried out using an integral risk factor. Methods: The classical methods of identifying and assessing project risks (the method of expert estimates, the Monte-Carlo simulation method), the comparative method, analysis, and synthesis are used in the study. Results: The basic characteristics of the concept of “risk” inherent in the modern understanding were formulated. A new concept of the integral risk factor and the method of its calculation were proposed. Alternative scenarios for the implementation of the investment project using the integral risk factor were developed. An algorithm for complex risk express assessment of an investment project on a multi-brand dealer auto center construction was developed by means of an integral risk factor and Monte-Carlo simulation method. Practical importance: The developed algorithm can be used by managers to identify and evaluate or carry out an express assessment of complex risks of investment projects in the process of operating real projects, as well as to provide background for developing new and more advanced methods of project risks assessment.

Risk Factors in IT Public–Private Partnership Projects

Project managers from both the public and private sectors have always known that better project management is often synonymous with better risk management. As such, all projects are subject to risk factors that make their management more or less complicated. In this article, we contend that successful project managers need tools to better identify and assess project risks and we try to provide such a tool in the form of grid of specific risk factors. This article analyzes risk factors in IT projects conducted using public–private partnership (PPP) procurement from the public partner’s perspective. Our research uses, as empirical case studies, three projects undertaken by the Tunisian government in partnership with IT and engineering companies. The results reveal 13 specific risk factors, which are classified into three generic risk factor categories: strategic, operational, and key resources. The adverse effects of risks materializing are also identified and analyzed.

Innovation project tool for outlining innovation projects

The paper presents the innovation project tool (IPT) which aims at outlining common characteristics of innovation projects in terms of project management and using these specifics for creating a tool for categorisation of innovation projects. The IPT might be useful for researchers and practitioners alike in their management in order to prevent them from making mistakes, to decrease unpredictability and ambiguity of such projects and to improve innovation projects' performance and success. The IPT can be also used as a checklist for categorisation of innovation projects; as a pre-defined watch list during project work; a risk management tool for better analysing and assessing project risks and integration management supporting tool for better scoping all possible ingredients in innovation projects. The IPT provided 51 specifics of innovation projects with ranking of their specificity and impact on innovation projects. The research is based on two iteration interviews with 60 highly experienced project managers from different industries.

Risk management to ensure the exploitation reliability of high-rise buildings

The paper presents the results of a study of design risks affecting the exploitation reliability of high-rise buildings. The aim of the study was to study and optimize risk management strategies. The relevance of the work is justified by the statistics of recorded violations in the design of high-rise buildings, which affects their quality in the process of exploitation, leading to disastrous consequences. Existing methods of risk assessment take into account natural and man-made hazards. The consequences of risk are human victims. Damage to risk is estimated from material losses. The paper suggests refinement to the methodology for assessing project risks. As a criterion of the consequences of risks, the deviation from the normative technical condition is proposed. As a criterion of damage, the value of operating costs, as well as the amount of costs for eliminating not the consequences of risks, but the costs of eliminating their causes at the design stage are proposed. The risk classification was carried out according to the design stages, according to the source of occurrence. The ranking of risk criteria was proposed to establish the priority of their elimination. The algorithm of risk management proposed by the authors can serve as an addition to existing quality control systems for the stage of designing high-rise buildings.