Manage Risk and
Protect Your
Capital Program
With margins already thin, organizations must create clear
strategies to mitigate risks and define guidelines for their
teams to follow.
Risks can come from anywhere, but generally capital
program risks fall into the categories below.
Material cost / Inflation / Estimation
errors / Unmanaged cash flow
Changes in laws and regulations /
Increases in taxes
Weather / Access to the site / Natural
disasters / Pollution
Design changes / Labor productivity /
Disputes
Financial
Types of Risk
Socioeconomic
Environmental
Construction
"68% of organizations indicate they have recently
experienced an operational surprise due to a risk they
did not anticipate."
2019 The State of Risk Oversight: An Overview of
Enterprise Risk Management Practices by NC State
Poole College of Management
Create a Risk
Management Strategy
Technology
Risk Assessment
Organizations can assess risk using
three steps. First, identify potential risks
and then assign each risk to the phase
they could impact. Next, calculate a
risk rating based on the severity and
probability of the risk. Lastly, take note
of budgetary or schedule impacts these
risks could have.
Risk Status
To understand the impact of risks,
track the progress of risk mitigation
and provide a risk status. This helps
communicate whether a risk has been
successfully mitigated or not. These
insights will ensure early visibility of
delays or changes.
Risk Mitigation
Organizations should assign individuals
to a specific risk with plans to help
avoid the risk or decrease the severity.
For optimal future learnings, they
should associate a resolution status to
each risk once it has been closed to
refine the risk mitigation processes.
Risk Resolution
To find the best method to resolve risk,
organizations should use risk resolution
to analyze which strategy best fits
their decision-making process. The
strategies include risk acceptance,
risk avoidance, risk protection, risk
reduction and risk transfer.
The right technology platform
should conform to an organization's
governance—controls and business
strategies. Kahua's project management
information system will adapt to any
governance and empower people to plan
and react to risks. The flexible platform
will increase transparency, increase
productivity, and decrease risk.
To learn more about managing capital program risk
download our Risky Business eBook here.