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Development of a risk assessment tool for post-project appraisal

Anaç, Caner
As competition in the business environment increases, knowledge management becomes a critical success factor. Firms should be able to gather, analyze and reuse knowledge to support their strategic decisions. Construction firms should also analyze information in hand (completed and on going project data) and make it a part of their learning mechanism. Post-project appraisal is an organizational learning mechanism aiming to form an organizational memory. Organizational memory is a remedy for organizational amnesia, which is a very common problem in the construction industry due to the project-specific nature of the industry and lack of systematic ways to manage knowledge. Particularly, information about risks and their consequences is an important piece of knowledge that the firms should refer to in the forthcoming projects in order not to do the same mistakes. v Risk management comprises of risk identification, analysis and formulation of risk response strategy to maintain an optimum risk-return structure in a project. It is agreed upon by many researchers that, although risk management is accepted as one of the critical success factors for construction projects, project participants generally do not have sufficient knowledge pertinent to risk management concept and the number of tools which facilitate the risk management process is rather low. Typically, companies carry out a risk assessment exercise at the start of a project and the obtained risk ratings are used to determine contingency. However, after the project is over, a final assessment is not usually carried out. The main idea in this study is that, in order to improve the risk assessment process in forthcoming projects, risk assessment should be a part of post-project appraisal. Risk events that actually happened may be classified according to their sources and impacts (monetary/nonmonetary) as well as the effectiveness of utilized response strategies. Consequently, companies may learn from what had happened in previous projects and prepare more realistic risk management plans in the future. The major objective of this thesis is to develop a project risk management information model for risk assessment using historical data in order to improve risk assessment process in forthcoming projects. The framework is modeled to ensure information continuity throughout the project life cycle by storing and reusing project information that resides in risk event databases. The applicability of the developed database system is tested on a real construction project and potential benefits are discussed.