risk management in indonesia construction project a case study of a toll road project

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Home > Books > Risk Management Treatise for Engineering Practitioners

Risk Management in Indonesia Construction Project: A Case Study of a Toll Road Project

Submitted: 27 September 2017 Reviewed: 12 June 2018 Published: 28 November 2018

DOI: 10.5772/intechopen.79457

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While project risks are generally acknowledged merely from owner and contractor perspectives, other parties also play important roles in the project. The aim of this study is to analyze the application of risk management in the toll road project from stakeholders’ perception, such as contractor, owner, design consultant, supervisory consultant, and community surrounding the project. Data of risk factors were collected through interviews with each stakeholder, including the probability of occurrence and their impacts. Risk Breakdown Structure (RBS) has been adapted to breakdown project risks from various stakeholders. Risk level of each risk factor is obtained by multiplying the probability and the impact. The overall results of risk analysis show various risks as perceived by each stakeholder due to different roles and interests in the project. This research provides an understanding of how project risks need to be fully comprehended for the success of the project.

• risk management
• construction risk
• project stakeholders
• risk breakdown structure
• toll road project

Author Information

Mochammad agung wibowo.

• Diponegoro University, Semarang, Indonesia

Jati Utomo Dwi Hatmoko *

Asri nurdiana.

*Address all correspondence to: [email protected]

1. Introduction

Indonesia’s economic growth continues showing improvement over the last 9 years (2009–2017 period) with the latest rate of 5.05% in 2017. One of the challenges faced in escalating Indonesia’s economic growth and improving economic competitiveness is the development of infrastructure. The rapid infrastructure development has been running in various sectors, from energy systems, road transport, office buildings and schools, telecommunications, and water supply networks, all of which require reliable infrastructure support [ 1 ].

Risks are closely linked to infrastructure projects, and toll road projects are no exception. Risk is a consequence of an uncertain condition which quite often cannot be predicted accurately. It is therefore necessary to have risk management from the beginning of the construction project, to reduce the impact of possible risks. PMBOK Guide 5th edition (2013) describes the stages of risk management, that is, risk identification, risk analysis, risk response, risk monitoring, and control.

Risks in construction projects are actually borne by many parties that involved in the project. Generally, risks are identified just from the owner and contractors perspectives; however, some other parties are also involved in the project. The aim of this study is to analyze the application of risk management in the toll road project from stakeholders’ perception, such as contractor, owner, design consultant, supervisory consultant, and community surrounding the project.

2. Reviewing risk management framework

2.1. risk management at construction project.

Risks of the project can be defined as an elaboration of unfortunate consequences, both of finance and structure of project, as a result of decisions taken or due to environmental conditions on the project location. Risks in construction projects are the matter that cannot be eliminated, but their impact can be minimized [ 2 ].

A construction project is unique, specific, and dynamic, and therefore projects have different levels and combinations of risks, hence different responses are taken to minimize those risks and different consequences affect the project performance. Risk categories in building projects are external risks, economic and financial risks, technical and contractual risks, and managerial risk [ 3 ]. This risk identification can be seen in Figure 1 .

Hierarchy of risk at building project in Indonesia. Source: Wiguna and Scott [ 3 ].

It is important to manage the multifaceted risks associated with international construction projects, in particular in developing countries, not only to secure work but also to make profit [ 4 ]. To effectively manage risks in construction projects, it is crucial to correctly identify the important risks and properly allocate them to the contractual parties. Stakeholders’ perceptions of risk vary due to different interests in the project [ 5 ].

Figure 1 shows risk category and risk identification on a construction project. Risks are identified in each risk category. The risk category in the construction project can be within the scope of financial risk, time risk, physical risk, personnel risk, design and technical risk, contractual risk, political and regulation risk, and safety risk [ 6 ]. The risk categories for construction projects are determined based on several considerations, including the types of construction works, the parties involved, the construction methods, the project resources, the construction issues, and others.

2.2. Risk management of toll road projects

Basically, risk management of toll road projects goes through several stages such as risk identification, risk analysis, and risk response. What distinguishes toll road projects from other projects is the identified risks. Risks will vary depending on the stakeholders’ perceptions on the project.

The identified risk on toll road construction projects was [ 7 ]:

2.2.1. Major risk

Traffic risk: traffic during the construction process. Inconvenience for the commuters to travel.

Toll risk: due to the lower traffic density, the collection of toll reduced. Toll risk lead to the failure in recovery of construction cost. Total construction cost increased.

Constructional risk: the project is to be completed in certain costs and time, hence the risk in the increase of material cost increased.

Operational and maintenance risk: due to the delays of the project, the operational and maintenance cost increased which affected the commencement of operation to cover the estimated maintenance expenditure.

Land acquisition: delay in the project due to land acquisition lead to increase in the estimated construction cost.

2.2.2. Minor risks

Utilities: nonavailability of fuel, electricity, and utilities not relocated on time causing delays to some works.

Noise: repetitive, excessive noise causes long-term hearing problems in labour and can be a dangerous distraction.

Material and manual handling: materials and equipment are being constantly lifted and moved around on a construction site, whether manually or by the use of lifting equipment. Different trades will involve greater demands, but all may involve some degree of risks.

Political risks, such as discontinuation of concession, tax increase, inappropriate tariff implementation, inappropriate tariff increase, new government policy enforcement, etc.

Construction risks, such as inappropriate design, land acquisition, project delay, project site condition, contractor’s failure, etc.

Operation and maintenance risks, such as toll network condition, operator’s incompetence, construction quality, etc.

Legal and contractual risks, such as concession time warranty, flawed/inconsistent contract document, etc.

Income risks, such as inaccurate traffic volume estimate, inaccurate toll tariff estimate, construction of a competing alternative road, etc.

Financial risks, such as inflation, devaluation, interest rate, changes in monetary policies, limited capital, etc.

Force major, such as weather condition, war, natural disasters, etc.

Risks of toll road projects will be different when viewed from different stakeholder perspectives. From the investor point of view, the most risk in toll road projects is related to land acquisition. Other major risks are related to government policy [ 9 ].

2.3. Concepts of risk and risk management

The risk arises because of the uncertainty of an event that has not happened yet. In such an uncertainty, risk will always be inversely proportional to profit. Uncertainty can usually increase the risk factors that can be seen from potential occurrence of an undesirable negative state of an event [ 10 ]. In many cases, the greater the likelihood of risk, the greater the likelihood of profit. But there are also some cases where the level of risk is small, but the likelihood of profits is great. The ability to understand one’s risks and benefits is not always the same will depend on the experience and knowledge.

Analyzing risk is an important thing in a business. In construction, risks can be seen in every aspect of the job, such as work location, resources, or project execution schedule [ 11 ]. Risk analysis aims to determine from the beginning of the possibility of losses and benefits.

Risk management can be defined as the identification, measurement, and control of the economic perspective of the risks that threaten the assets and income. Risk management aims to identify the source of risk and uncertainty, determine its influence and determine its response appropriately. The goal of risk management is not just to reduce risk. Risk management can be used by a decision maker in estimating risks and benefits that can turn a risk into a large income. The risk management divided into five stages, that is, risk classification, risk identification, data elicitation, risk analysis, and risk response [ 10 ].

In the book, A Guide to The Project Management of Body of Knowledge 5th edition, a more detailed description of the risk management process consists of more than five steps as shown in Figure 2 . In the following diagram, it is shown that the risk management process consists of six stages, that is, risk management planning, risk identification, risk analysis that divided into two: quantitative analysis and qualitative analysis, risk management action planning, and supervision and control.

Step of risk management. Source: PMBOK 5th edition, 2013.

Another simple, common and systematic approach to risk management is suggested by Berkely and others [ 11 ]. Risk management has four distinct stages: (a) risk classification, (b) risk identification, (c) risk assessment, and (d) risk response. In the first stage, risks should be classified into different groups with certain criteria in order to clarify the relationships between them. The second stage entails the identification of the risks pertaining to risk management. The third stage is to assess and evaluate the effects of these risks. In the final stage, appropriate risk response policies should be developed to reduce and control the risks.

3. Research method

The object of this research is Semarang-Solo toll road Section I in Indonesia. In this case, the risk perceptions of the stakeholders are from contractors, owners, design consultant, supervisory consultants, and community surrounding the project. Differences in stakeholders’ perspective on the project and the different interests in the project lead to differing views on project risks.

Primary data were collected by interviews and questionnaire surveys. Primary data were the identification risk and also the impact and probability risk from all stakeholders. The questionnaires were distributed to all five stakeholders. From contractor side, the respondents were the general superintendent, deputy project manager, construction manager, and project engineering manager of the project. From owner side, the respondents were the chairman of the control section 1, the chairman of the control section 2, and the chairman of the control section 3. From design consultant side, the respondents were the team leader project and the expert in the case study project (two person). From the supervisory consultant, the respondents were resident engineer, quantity engineer, soil material engineer, and chief inspector. From the community around the project, the respondents were the urban village heads (two persons) and the proxy of community (two persons). All respondents are decision makers who are directly involved in this case study project and have a lot of work experience.

Secondary data were obtained from the data collection conducted by other study, for example, reference books, magazine articles, and journals related to the topic of study. The secondary data were the toll road technical document, project document, and risk management that will generate output risk and its response to the construction of toll road development.

The method of data processing used risk breakdown structure as described in Figure 3 .

Data processing methods.

3.1. Risk management model

A Management Model is simply the set of choices made by executives about how the work of management gets done about how they define objectives, motivate effort, coordinate activities, and allocate resources [ 7 ]:

Level 1: planning.

Level 2: risk identification.

Level 3: risk analysis.

Level 4: mitigation.

3.2. Planning

Planning is the first step of any project which includes planning, organizing and controlling, and execution of the project. Project planning is the function in which project and construction managers and their key staff members prepare the master plan. Then this master plan is put into time schedule by scheduling people which is later called project scheduling. Project planning and project scheduling are two separate and distinct functions of the project management. A project planning is mostly responsible for the success or failure of the project, therefore planning of the project should be done very carefully and under expert advice [ 7 ].

3.3. Risk identification

The most important step in risk management is to identify the risks involved. The overall risks must be identified to be able to analyze and know the risk response that will be taken. Decision makers believe that the most important advantage in risk management is to identify it rather than analyzing it [ 10 ]. According to the book, A Guide to the Project Management Body of Knowledge (PMBOK), the steps in the risk identification are document review, information gathering technique, checklist analysis, assumption analysis, and diagram engineering.

3.4. Risk analysis

PMBOK (2013) mentions that in the risk analysis, there are often used methods such as risk probability and risk impact assessment. Estimating possible risk investigates the possibility of occurrence of some specific risk, and estimating the risk impact investigates the potential effects of a project that may affect the project’s objectives such as time, quality, price, and scope of work which include both negative and positive impacts. Risk probability and risk impact are used to calculate the risk level of risks. Risk level is calculated using Eq. (1) [ 11 ].

Risks are ordered based on the multiplication of frequency and impact scales, composed from the largest to the smallest. To quantify the values of the risk probability and risk impact, a scale of 1–5 representing low to high probability and impact is used.

3.5. Risk mitigation

Risk response planning is a process of developing options and determining the most effective actions to increase the opportunity and reduce the risk from the negative effect. The types of response to risk can be divided into four, that is, risk avoidance, by altering the project plan to eliminate risks or conditions or to protect the project objectives from the effects/consequences; risk transfer, by seeking the exchange of consequences or risk effects to third parties together with the ownership of the response; risk mitigation, conducting investigations to reduce the probability and/or consequences of adverse risk events to acceptable levels; and risk acceptance, shows that the project team decides not to change the project plan or is unable to identify other appropriate response strategies.

4. Risk identification

Rigid pavement 4/2 along 3.525 m

Three main bridges

Six box culverts

Four overpass

Toll facilities and plaza toll

Particular attention to this project construction is the three major bridges where the land has hilly contours, while the bridge structure has a high pillar (up to 54 m), which in its execution requires special resources (formwork pillar with jump form system and slip form, support system for pier head formwork, and girder launching unit for erection girder job). The geographic and hydrological conditions of Semarang city with high rainfall and unfinished land acquisition conditions are challenges that must be addressed with careful planning and implementation, so that projects can be completed on time, meeting quality requirements, and within the budget.

Risk identification on toll road projects is divided into categories according to stakeholder interests in the project. Risk in the toll road project is divided into four, that is, planning phase, land acquisition phase, operation and maintenance phase, and redelivery phase. The most significant risk is in the phase of land acquisition [ 12 ].

Risk perceptions of each stakeholder will differ due to the different interests within the project. Table 1 presents the results of interviews in the identification of risks from different stakeholders in this project. The identification of risk from the perception of contractor, owner, community surrounding the project, design consultant, and supervisory consultant are divided into eight risk categories. The risk categories are economic risk, contract and legal risks, construction risk, risk of income, risk of operation and maintenance, political risk, social risk, and force majeure risk. Risk identification was carried out for each risk category. Each stakeholder carries different categories of risk, depending on the interests of stakeholders in the project.

Risk identification of Semarang-Solo Section I toll road project.

Risks as viewed from contractor’s perception were risk at economic risk, contract and legal risks, and construction risk. Risks from owner’s perception include risk at construction risk, risk of income, risk of operation and maintenance, and political risk. Risks from local community’s perception were economic risk, contract and legal risks, construction risk, and social risk. Risks from design consultant’s perception were economic risk, contract and legal risks, construction risk, political risk, and force majeure risk. Risks from supervisory consultant’s perception were economic risk, construction risk, political risk, and force majeure risk. From this risk identification of each stakeholder, it can be seen that stakeholders have their own risk characteristics, for example, risk of income is only relevant for the owner, and social risk only exist in the community surrounding the project.

5. Risk analysis

Risk analysis was done using risk breakdown structure method. Risk level was obtained by multiplication between the risk probability and risk impacts. The results of the risk analysis suggest that the rank of risks from each stakeholder varies, as shown in Table 2 .

Risk analysis of Semarang-Solo Section I toll road project.

Table 2 shows the risk priority of each stakeholder. It can be seen that for all stakeholders, the highest rank of risks is within the construction risk. For the contractor, the most significant risk is the job delay. For owner, the most risk is the delay of land acquisition. For local community surrounding the project, the most significant risk is the risk of having pavement in that area damaged by construction activities. For design consultant, the highest risk is the error of price estimates for bidding. For supervisory consultant, the top risk is the improper design from design consultant.

6. Risk mitigation

Low risk ➔ risk acceptance

Moderate risk ➔ risk mitigation

High risk ➔ risk avoidance

Based on the results of analysis and interviews with stakeholders, the risk response obtained is shown in Table 3 .

Risk responses of Semarang-Solo Section I toll road project.

7. Discussion

For Semarang-Solo toll road project Section I, risks as perceived by stakeholders are categorized as: construction risk, economic and political risks, legal and contractual risks. These three risk categories are presented in each stakeholder risk analysis with several assumptions and conditions. For the owner, the economic risk is the risk of income. The economic risks refer to macroeconomic risks, related to economic policies such as inflation and devaluation, as well as the micro-economic risks associated with financial stakeholders. The categories of political, legal, and contractual risks are made into one category, because these three risks are considered to be related.

Table 4 shows the top risk levels for these three risk categories. It can be seen that based on the risk analysis, the biggest construction risks are on the owner side, while the biggest economic risks are on the contractor side. For political, legal, and contractual risks, the biggest risk level is also on the contractor side. Compared to previous studies, where the highest risks are in the categories of construction risk, legal and contractual risk, income risk, and financial risk [ 7 , 8 ], this study found that the top risks are in the categories of construction risk, economic risk, and political, legal, and contractual risk, and the degree of importance differs between stakeholders.

The top risk level of each stakeholders with risk breakdown structure method.

8. Conclusion

From the application of risk management at Semarang-Solo Section I toll road project, it can be seen that each stakeholder has different perceptions of risks. It is mainly because each stakeholder has different interests in project. The risk categories in this project are economic risk, contract and legal risks, construction risk, risk of income, risk of operation and maintenance, political risk, social risk, and force majeure risk. Each stakeholder carries different categories of risks. The top risks as perceived by all stakeholders are construction risks.

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CRITICAL RISK ANALYSIS OF TOLL ROAD PUBLIC-PRIVATE PARTNERSHIP (PPP) PROJECT CONSTRUCTION PHASE

• Fahira Rhomianti Putri School of Master Program in Civil Engineering and Planning, Faculty of Engineering, Sriwijaya University, 30128, Palembang, South Sumatera, Indonesia
• Betty Susanti School of Master Program in Civil Engineering and Planning, Faculty of Engineering, Sriwijaya University, 30128, Palembang, South Sumatera, Indonesia
• Mona Foralisa Toyfur School of Master Program in Civil Engineering and Planning, Faculty of Engineering, Sriwijaya University, 30128, Palembang, South Sumatera, Indonesia

Limited funding in meeting the financing needs for the provision of toll road infrastructure makes the government need to look for alternative financing so that the project can still be carried out. Public Private Partnership (PPP) is an alternative option to overcome this problem. However, infrastructure projects with PPP schemes require large investments and a relatively long concession period, thus allowing risk uncertainty to arise as a result of decisions made during the project. Risk identification in a construction project is important at the beginning of the project. This study was aimed at identifying critical risks, determining risk allocation and risk mitigation strategies, and analyzing the interrelationship between critical risks. The case study was conducted on the Trans Sumatra toll road project in South Sumatra. Quantitative data (questionnaire survey) and qualitative data (interview) were collected from the toll-road private sector. The results of the study identified five critical risks in the construction phase (CP) of the toll road project along with the allocation of risks, namely the risks of geographical conditions (shared), delays in work progress (private sector), design errors (private sector), force majeure (shared) and weather conditions (shared). The mitigation strategy for the risks of geographical conditions and design errors was to redesign the construction structure by adjusting with the land conditions of the toll road. Force majeure (Covid-19) causing delays in work progress required rescheduling and recalculation of construction costs. Weather conditions (heavy rain) occurring on swampy land caused puddles/floods; this condition caused delays in construction work. The mitigation strategy that could be carried out was by coordinating with the Indonesian Meteorology, Climatology, and Geophysics Agency (BMKG) in the region and preparing disaster management Standard Operating Procedures (SOPs). The cause and effect of each risk showed that the critical risks in the construction phase of the toll road project were interrelated to each other which the risks would finally contribute to the increase in the construction costs of the toll road project.

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Table of Contents

Understanding project risk management, definition and explanation of project risk management, 4 key components of project risk management, risk identification, risk assessment, risk response planning, risk monitoring and control, 5 project risk management case studies, gordie howe international bridge project, fujitsu’s early-career project managers, vodafone’s complex technology project, fehmarnbelt project, lend lease project, project risk management at designveloper, how we manage project risks, advancements in project risk management, project risk management: 5 case studies you should not miss.

May 21, 2024

Exploring project risk management, one can see how vital it is in today’s business world. This article from Designveloper, “Project Risk Management: 5 Case Studies You Should Not Miss”, exists in order to shed light on this important component of project management.

We’ll reference some new numbers and facts that highlight the significance of risk management in projects. These data points are based on legit reports and will help create a good basis of understanding on the subject matter.

In addition, we will discuss specific case studies when risk management was successfully applied and when it was not applied in project management. These real world examples are very much important for project managers and teams.

It is also important to keep in mind that each project has associated risks. However through project risk management these risks can be identified, analyzed, prioritized and managed in order to make the project achieve its objectives. Well then, let’s take this journey of understanding together. Watch out for an analysis of the five case studies you must not miss.

Risk management is a very critical component of any project. Risk management is a set of tools that allow determining the potential threats to the success of a project and how to address them. Let’s look at some more recent stats and examples to understand this better.

Statistics show that as high as 70% of all projects are unsuccessful . This high failure rate highlights the need for efficient project risk management. Surprisingly, organizations that do not attach much importance to project risk management face 50% chances of their project failure. This results in huge losses of money and untapped business potential.

Additionally, poor performance leads to approximated 10% loss of every dollar spent on projects. This translates to a loss of $99 for every $1 billion invested. These statistics demonstrate the importance of project risk management in improving project success rates and minimizing waste.

Let us consider a project management example to demonstrate the relevance of the issue discussed above. Consider a new refinery being constructed in the Middle East. The project is entering a key phase: purchasing. Poor risk management could see important decisions surrounding procurement strategy, or the timing of the tendering process result in project failure.

Project risk management in itself is a process that entails the identification of potential threats and their mitigation. It is not reactionary but proactive.

This process begins with the identification of potential risks. These could be any time from budget overruns to delayed deliveries. After the risks are identified they are then analyzed. This involves estimating the probability of each risk event and the potential consequences to the project.

The next stage is risk response planning. This could be in the form of risk reduction, risk shifting or risk acceptance. The goal here is to reduce the impact of risks on the project.

Finally, the process entails identifying and tracking these risks throughout the life of a project. This helps in keeping the project on course and any new risks that might arise are identified and managed.

Let’s dive into the heart of project risk management: its four key components. These pillars form the foundation of any successful risk management strategy. They are risk identification, risk analysis, risk response planning, and risk monitoring and control. Each plays a crucial role in ensuring project success. This section will provide a detailed explanation of each component, backed by data and real-world examples. So, let’s embark on this journey to understand the four key components of project risk management.

Risk identification is the first process in a project risk management process. It’s about proactively identifying risks that might cause a project to fail. This is very important because a recent study has shown that 77% of companies had operational surprises due to unidentified risks.

There are different approaches to risk identification such as brainstorming, Delphi technique, SWOT analysis, checklist analysis, flowchart. These techniques assist project teams in identifying all potential risks.

Risk identification is the second stage of the project risk management process. It is a systematic approach that tries to determine the probability of occurrence and severity of identified risks. This step is very important; it helps to rank the identified risks and assists in the formation of risk response strategies.

Risk assessment involves two key elements: frequency and severity of occurrence. As for risk probability, it estimates the chances of a risk event taking place, and risk impact measures the impact associated with the risk event.

This is the third component of project risk management. It deals with planning the best ways to deal with the risks that have been identified. This step is important since it ensures that the risk does not have a substantial effect on the project.

One of the statistics stated that nearly three-quarters of organizations have an incident response plan and 63 percent of these organizations conduct the plan regularly. This explains why focusing only on risks’ identification and analysis without a plan of action is inadequate.

Risk response planning involves four key strategies: risk acceptance, risk sharing, risk reduction, and risk elimination. Each strategy is selected depending on the nature and potential of the risk.

Risk monitoring and control is the last step of project risk management. It’s about monitoring and controlling the identified risks and making sure that they are being addressed according to the plan.

Furthermore, risk control and management involve managing identified risks, monitoring the remaining risk, identifying new risks, implementing risk strategies, and evaluating their implementation during the project life cycle.

It is now high time to approach the practical side of project risk management. This section provides selected five case studies that explain the need and application of project risk management. Each case study gives an individual approach revealing how risk management can facilitate success of the project. Additionally, these case studies include construction projects, technology groups, among other industries. They show how effective project risk management can be, by allowing organizations to respond to uncertainties and successfully accomplish their project objectives. Let us now examine these case studies and understand the concept of risk in project management.

The Gordie Howe International Bridge is one of the projects that demonstrate the principles of project risk management. This is one of the biggest infrastructure projects in North America which includes the construction of a 6 lane bridge at the busiest commercial border crossing point between the U.S. and Canada.

The project scope can be summarized as: New Port of Entry and Inspection facilities for the Canadian and US governments; Tolls Collection Facilities; Projects and modifications to multiple local bridges and roadways. The project is administered via Windsor-Detroit Bridge Authority, a nonprofit Canadian Crown entity.

Specifically, one of the project challenges associated with the fact that the project was a big one in terms of land size and the community of interests involved in the undertaking. Governance and the CI were fundamental aspects that helped the project team to overcome these challenges.

The PMBOK® Guide is the contractual basis for project management of the project agreement. This dedication to following the best practices for project management does not end with bridge construction: It spreads to all other requirements.

However, the project is making steady progress to the objective of finishing the project in 2024. This case study clearly demonstrates the role of project risk management in achieving success with large and complicated infrastructure projects.

Fujitsu is an international company that deals with the provision of a total information and communication technology system as well as its products and services. The typical way was to employ a few college and school leavers and engage them in a two-year manual management training and development course. Nevertheless, this approach failed in terms of the following.

Firstly, the training was not comprehensive in its coverage of project management and was solely concerned with generic messaging – for example, promoting leadership skills and time management. Secondly it was not effectively reaching out to the need of apprentices. Thirdly the two year time frame was not sufficient to allow for a deep approach to the development of the required project management skills for this job. Finally the retention problems of employees in the train program presented a number of issues.

To tackle these issues, Fujitsu UK adopted a framework based on three dimensions: structured learning, learning from others, and rotation. This framework is designed to operate for the first five years of a participant’s career and is underpinned by the 70-20-10 model for learning and development. Rogers’ model acknowledges that most learning occurs on the job.

The initial training process starts with a three-week formal learning and induction program that includes the initial orientation to the organization and its operations, the fundamentals of project management, and business in general. Lastly, the participants are put on a rotational assignment in the PMO of the program for the first six to eight months.

Vodafone is a multinational mobile telecommunications group that manages telecommunications services in 28 countries across five continents and decided to undertake a highly complex technology project to replace an existing network with a fully managed GLAN in 42 locations. This project was much complex and thus a well grounded approach to risk management was needed.

The project team faced a long period of delay in signing the contract and frequent changes after the contract was signed until the project is baselined. These challenges stretched the time frame of the project and enhanced the project complexity.

In order to mitigate the risks, Vodafone employed PMI standards for their project management structure. This approach included conducting workshops, developing resource and risk management plan and tailoring project documentations as well as conducting regular lesson learned.

Like any other project, the Vodafone GLAN project was not an easy one either but it was completed on time and in some cases ahead of the schedule that the team had anticipated to complete the project. At the first stage 90% of migrated sites were successfully migrated at the first attempt and 100% – at second.

The Fehmarnbelt project is a real-life example of the strategic role of project risk management. It provides information about a mega-project to construct the world’s longest immersed tunnel between Germany and Denmark. It will be a four-lane highway and two-rail electrified tunnel extending for 18 kilometers and it will be buried 40 meters under the Baltic Sea.

This project is managed by Femern A/S which is a Danish government-owned company with construction value over more than €7 billion (£8. 2 billion). It is estimated to provide jobs for 3,000 workers directly in addition to 10,000 in the suppliers. Upon its completion, its travel between Denmark and Germany will be cut to 10 minutes by automobile and 7 minutes by rail.

The Femern risk management functions and controls in particular the role of Risk Manager Bo Nygaard Sørensen then initiated the process and developed some clear key strategic objectives for the project. They formulated a simple, dynamic, and comprehensive risk register to give a more complete risk view of the mega-project. They also created a risk index in order to assess all risks in a consistent and predictable manner, classify them according to their importance, and manage and overcome the risks in an appropriate and timely manner.

Predict! is a risk assessment and analysis tool that came in use by the team, which helps determine the effect of various risks on the cost of the construction of the link and to calculate the risk contingency needed for the project. This way they were able to make decisions on whether an immersed tunnel could be constructed instead of a bridge.

Lend Lease is an international property and infrastructure group that operates in over 20 countries in the world; the company offers a better example of managing project risks. The company has established a complex framework called the Global Minimum Requirements (GMRs) to identify risks to which it is exposed.

The GMRs have scope for the phase of the project before a decision to bid for a job is taken. This framework includes factors related to flooding, heat, biodiversity, land or soil subsidence, water, weathering, infrastructure and insurance.

The GMRs are organized into five main phases in line with the five main development stages of a project. These stages guarantee that vital decisions are made at the ideal time. The stages include governance, investment, design and procurement, establishment, and delivery.

For instance, during the design and procurement stage, the GMRs identify requisite design controls that will prevent environment degradation during design as well as fatal risk elimination during planning and procurement. This approach aids in effective management of risks and delivery of successful projects in Lend Lease.

Let’s take a closer look at what risk management strategies are used here at Designveloper – a top web & software development firm in Vietnam. We also provide a range of other services, so it is essential that we manage risks on all our projects in similar and effective ways. The following part of the paper will try to give a glimpse of how we manage project risk in an exemplary manner using research from recent years and include specific cases.

The following steps explain the risk management process that we use—from the identification of potential risks to managing them: Discovering the risks. We will also mention here how our experience and expertise has helped us in this area.

Risk management as a function in project delivery is well comprehended at Designveloper. Our method of managing the project risk is proactive and systematic, which enables us to predict possible problems and create successful solutions to overcome them.

One of the problems we frequently encounter is the comprehension of our clients’ needs. In most cases, clients come to us with a basic idea or concept. To convert these ideas into particular requirements and feature lists, the business analysts of our company have to collaborate with the client. The whole process is often a time-waster, and having a chance is missed.

To solve this problem, we’ve created a library of features with their own time and cost estimate. This library is based on data of previous projects that we have documented, arranged, and consolidated. At the present time when a client approaches us with a request, we can search for similar features in our library and give an initial quote. This method has considerably cut the period of providing the first estimations to our clients and saving the time for all participants.

This is only one of the techniques we use to mitigate project risks at Designveloper. The focus on effective project risk management has been contributing significantly to our successful operation as a leading company in web and software development in Vietnam. It is a mindset that enables us to convert challenges into opportunities and provide outstanding results for our clients.

In Designveloper, we always aim at enhancing our project risk management actions. Below are a couple examples of the advancements we’ve made.

To reduce the waiting time, we have adopted continuous deployment. This enables us to provide value fast and effectively. We release a minimum feature rather than a big feature. It helps us to collect the input from our customers and keep on improving. What this translates into for our customers is that they start to derive value from the product quickly and that they have near-continuous improvement rather than have to wait for a “perfect” feature.

We also hold regular “sync-up” meetings between teams to keep the information synchronized and transparent from input (requirements) to output (product). Changes are known to all teams and thus teams can prepare to respond in a flexible and best manner.

Some of these developments in project risk management have enabled us to complete projects successfully, and be of an excellent service to our clients. They show our support of the never-ending improving and our capability to turn threats into opportunities. The strength of Designveloper is largely attributed to the fact that we do not just control project risks – we master them.

To conclude, project risk management is an important element of nearly all successful projects. It is all about identification of possible problems and organization necessary measures that will result in the success of the project. The case studies addressed in this article illustrate the significance and implementation of project risk management in different settings and fields. They show what efficient risk management can result in.

We have witnessed the advantages of solid project risk management at Designveloper. The combination of our approach, powered by our track record and professionalism, has enabled us to complete projects that met all client’s requirements. We are not only managing project risks but rather mastering them.

We trust you have found this article helpful in understanding project risk management and its significance in the fast-changing, complicated project environment of today. However, one needs to mind that proper project management is not only about task and resource management but also risk management. And at Designveloper, our team is there to guide you through those risks and to help you realize your project’s objectives.

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Managing Construction Risks of the Toll Road Project in Indonesia

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