project management concept

Risk management and value management

11th February 2022   |   Jamie Barrett   |   Reading Time: 3 minutes

The construction project manager’s role

In previous articles we’ve established that the project manager is an integral part in project management of all construction projects, large and small. Robust planning makes for a great project, and the project manager is responsible for ensuring that everything runs smoothly from start to finish.

But making sure projects run smoothly is only part of the story and there are many other factors a project manager has to consider at every stage. Two important such factors are risk management and value management.

This article will help you understand risk management and value management and how it helps your construction project.

What is value management?

Often referred to as value engineering, value management is the process of identifying ways to maximise your construction project budget, without affecting the quality or timeliness of your project. Note that we are talking about value and not cost. An important distinction when value management is often considered purely in terms of cutting costs!

The intention of this process is to achieve the desired project outcomes whilst making the most of the budget available. For maximum impact the value management process should start at the earliest possible stage of your project, as opposed to being introduced after a problem unfolds or money is getting tight.

What is risk management?

Risk is a potential event, either internal or external, that can cause a project to fail to meet its objectives or even fail to complete altogether. Construction projects are fraught with risk, which is why robust risk management is crucial to every project.

Risk management processes help your project manager plan and prepare contingencies to protect the success of your project from the outset. A process they’ll repeat as the project progresses.

How are value management and risk management connected?

Risk and value management are tasks that belong together and are often carried out in parallel. Value management exercises determine exactly how value can be achieved for a client’s project.

Meanwhile, risk management ensures that value management decisions don’t expose your project to new or unidentified risk, and then seeks to eliminate, mitigate or minimise them. Poor risk management is known to be a major cause of project failure, so it’s important to head off any issues before problems set in.

The project manager and their team will often repeat this process of defining value and associated risks until always seeking to achieve a happy balance of value and risk. In balancing risk and value, you project manager’s aim is to protect your best interests and achieve maximum ROI whilst delivering a quality project on time and within budget.

What is the role of the project manager?

Your project manager’s role includes managing budgets, variations, quality, supply chain, contractors and so on, which makes controlling the wide ranging risks a high priority. 
A proven risk management process should be adopted at all levels within the integrated project team, and the risks regularly reviewed and updated throughout the project stages. This will be the responsibility of the project manager and they will need to ensure their decisions are complied with.

What does this mean for you – the client?

Your project manager will strike a balance ensuring your project runs smoothly and achieves your desired quality goals – ultimately delivering a quality end product that offers best value for money, high quality and timely delivery.

How Evolution5 can help you?

Evolution5 is a professional consultancy offering project management, quantity surveying, principal designer, employer’s agent, and contract administration services for projects across London and the South East.

If you have a construction project and would like to explore how the team can help you, click the button below or call 023 8040 5073.