Digitisation and construction
Costly, complex, and extensive projects like construction are inherently risky. With so many factors that can affect a construction project’s budget, workflow, and outcome, careful planning is essential and should include a well-defined construction risk management plan. Managers, field engineers, safety officers, and other stakeholders must identify all potential risks and develop a comprehensive risk assessment and mitigation system to comply with all safety and quality standards. 

As the demand for more efficient and safer construction project implementation increases, more and more contractors are adopting data-driven solutions to optimise their risk management systems. Digital tools such as construction project management software, building information modelling, and artificial intelligence are pivotal in re-engineering construction risk evaluation, analysis, and control. With better accuracy in risk identification in construction and a more proactive mitigation approach, contractors can more confidently guarantee project success.

What is construction risk management?

Identifying, assessing, and controlling potential risks during the early stages of a construction project is critical for successful completion and turnover. This process—construction risk management—involves a systematic approach to evaluating threats and developing strategies to counter them or at least minimise their impact on the project’s objectives. It usually encompasses budget, timeline, safety, quality, and legal compliance, among other factors.

Construction risk management requires continuous evaluation and adjustment throughout the project’s life. By implementing an effective construction risk management plan that includes digital technology integration, clients and stakeholders can prepare for any uncertainties, which are commonplace in the business. Ultimately, an effective construction risk management plan for construction helps reduce overall costs and meet, if not exceed, the client’s expectations.

Biggest risks in construction

While construction risks are the same no matter where the construction is taking place, each country has its own way of approaching them. In the UAE, for instance, construction risks are classified into three types—internal risks (plan, design, organisational relationships, and management), external risks (legal matters, local environment, politics, and finance), and force majeure (reason beyond the contractor’s control, including natural disasters, war, and pandemic). This classification helps builders simplify solutions for similar or related risks. Below are some of the risk’s contractors must prioritise throughout the project implementation.

  1. Design and planning risks 

The entire construction project is based on the design and plan. Failure to identify miscalculations and errors could result in a massive delay and cost overruns. There may be a need to redesign and demolish already-built structures to correct blunders. Keeping the design and plan realistic and feasible allows project managers to anticipate the most probable risks.

  1. Budget risks

Construction projects involve large sums of money, and most expenses aren’t covered. Therefore, managing the budget, including setting aside funds for contingencies, is critical for the project’s success. Budget risks arise from overspending, changes in scope, and unforeseen expenses. 

  1. Schedule risks 

Every minute counts in a construction project. Delays can significantly impact costs, quality, and client satisfaction. This is why a comprehensive schedule is paramount, which factors in downtime due to plan and scope changes. Construction managers must have excellent planning and organisational skills to eliminate schedule risks.

  1. Resource risks

Resources like labour, equipment, and materials may not always be available. Sometimes, contractors are left with very limited choices, which could impact the safety and quality of the structure. Of course, they can wait for the resources to be available, but that might take time and lead to delays and increased costs. Resource risks can be mitigated through proper planning and coordination with suppliers and contractors.

  1. Safety risks

A recent Emirates 24/7 poll reveals that construction jobs rank second on the list of the most dangerous jobs in the UAE, and it’s not difficult to understand why. Construction sites are replete with hazards that can lead to injuries, fatalities, and legal liability. But these hazards can be mitigated with proper planning, regular training, and all-inclusive safety procedures, which comprise modern construction safety management systems. Therefore, safety risks must be prioritized in every construction risk management framework. 

  1. Environmental risks

Construction projects can significantly impact the environment, but only if planned poorly and no mitigation measures are in place. Environmental risks include soil erosion, water pollution, and habitat destruction. Therefore, comprehensive environmental impact assessments are needed to minimise or prevent damage to the construction site’s surroundings.

  1. Legal and regulatory risks

Failure to comply with legal and regulatory requirements could lead to fines, legal action, and project delays. These requirements are specified in building codes, zoning laws, and environmental regulations. Clients may also add specific riders in the contract that the contractor must fulfil. Proper planning and compliance monitoring can help to manage governance risk and compliance inadequacies.

  1. Quality risks

Meeting the construction project’s objectives means meeting quality standards. But it’s more challenging than it seems. The contractor must only use high-grade materials and hire reputable contractors. Poor workmanship, inadequate quality control measures, and the use of substandard materials are the primary triggers of quality risks. 

How technology optimises construction risk management

The way contractors deal with construction risks has changed significantly since the dawn of the digital age. With advanced tools like PlanRadar, designed to handle big data and streamline flawed and inefficient processes, construction project risk assessment and management systems have never been more reliable, thanks to increased data accuracy and better analytics. Below are some ways technology is transforming contractor risk management in construction.

  1. Improved data collection

Risk identification in construction requires the capacity to handle big data (the byproduct of a heavily connected world). Information, such as site conditions, weather patterns, and worker behavior, is all part of the big data produced and analysed in a construction project. With construction project management software, collecting this data to identify potential risks and develop mitigation strategies is much easier.

  1. More accurate risk analysis

Digital technology has also helped construction companies analyse construction risks more accurately. For example, 3D modelling and virtual reality can be used to identify potential hazards before construction commences. Visualisation is critical in laying out and implementing risk mitigation in construction projects.

  1. Real-time monitoring

Construction project management software expands a contractor’s capabilities. For instance, it allows them to stream surveillance fed to the system through IoT sensors, CCTV, and mobile devices. Stakeholders can also submit reports immediately, making data available on the platform for managers to check in real-time. Real-time monitoring also helps to ensure compliance with safety regulations and quality standards.

  1. Improved communication

The lack of communication channels is among the top reasons for construction blunders. Construction project management software offers a platform where all the teams can communicate and collaborate. This platform also serves as the central storage for documents, so stakeholders can easily access the data they need. It can even be integrated with BIM to support collaboration.

  1. Automation

Many construction processes have been automated thanks to the introduction of new technology. Automation helps reduce the need for human intervention, minimising the risk of errors and accidents. For example, automated machinery and drones can be used to perform dangerous or difficult tasks for workers.



Construction risk management is the nervous system of a construction project. It alerts contractors to potential risks that can impact project outcomes. Contractors can also only ensure the project is finished on time, within the budget, and under all standards and regulations through effective construction risk management.

Technology plays a critical role in creating and implementing modern construction risk management systems, and it keeps evolving. A wave of more advanced tools combining IoT, AI, blockchain, and other digital solutions is expected to hit the market in the next few years. Using scalable construction project management software prepares a construction company for those innovations.

Find out how PlanRadar can optimise your construction risk management system and prepare your company for new advancement opportunities. Start your 30-day free PlanRadar trial, or contact us for more details.