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Who's protecting your blindside?


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This presentation reveals where things can go wrong during real estate construction projects as companies look to expand in Asia’s emerging markets, and how these issues can be avoided by including a Construction Manager from the outset.

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Published in: Engineering, Technology
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Who's protecting your blindside?

  1. 1. Who’s protecting your blindside? Construction Management: Protecting your business from project risk
  2. 2. Risk management continues to top business agendas…
  3. 3. Top Ten Business Risks Aon’s Global Risk Management Survey, 2013 1. Economic slowdown/slow recovery 2. Regulatory/legislative changes 3. Increasing competition 4. Damage to reputation/brand 5. Failure to attract or retain top talent 6. Failure to innovate/meet customer needs 7. Business interruption 8. Commodity price risk 9. Cash flow/liquidity risk 10. Political risk/uncertainty
  4. 4. Many companies leave themselves open to risk in the delivery of real estate construction projects
  5. 5. When things go wrong on your project in terms of TIME, COST, QUALITY and SAFETY Loss of competitive advantage Delays in getting your product or service to market Inability to meet customer expectations Damage to reputation and brand Inability to attract and retain talent Failure to meet compliance requirements Exposure to legal action Reduced corporate profitability Disruption of business operations Impact on cash flow and liquidity
  6. 6. There is a real risk of your project running over time, and beyond budget
  7. 7. KPMG’s Global Construction Survey 2012 records that over half of the respondents see more than 25% of their projects overrun on the initial bid margin In the US, 40–50% of all major construction projects overrun on timing and/or costs, according to a survey by the Construction Management Association of America In Malaysia, a recent survey concluded that a shocking 92% of construction projects overrun on time or budget
  8. 8. When things go wrong… Site flood in India An on-site flood during a fit-out project in India damaged the site, the works under construction and space occupied by others. • Significant delays while damages were rectified • Major cost impact (no single responsibility for the site) • Insurances were limited to individuals • Negative impact on reputation (irresponsible employer)
  9. 9. When things go wrong… Authority approval and air quality issues in China • Loss in profitability and disruption to business Failing to obtain necessary authority approvals and not allowing enough time to purge the work • Increase in sick leave space after construction, caused major delays at • Impact on staff attraction/retention a 50,000-sq ft fit-out construction project.
  10. 10. Risks are hidden throughout the construction journey • Confrontational relationships • Lack of flexibility • Miscommunication • Breakdown between project phases • Unfamiliar local market dynamics • Lack of accountability on site • Transparency/governance issues
  11. 11. Who is looking after the production and direction of your project? PROJECT MANAGER (PRODUCER) • Obtain and interpret the brief • Provide independent advice and reporting • Manage and coordinate the design • Manage and coordinate authority approvals • Interface with your internal team • Administer your contractual obligations with all parties • Link between the construction manager and the design team
  12. 12. Who is looking after the production and direction of your project? CONSTRUCTION MANAGER (DIRECTOR) • Provide schedule, cost, logistics and feasability of construction input during design stage • Interface with stakeholders • Trade contractor identification, procurement and management • Site establishment, management and coordination • Administer trade contracts including claims and payments • Manage the handover to owner
  13. 13. Professional construction management protects your business Where do things go wrong? • Unclear scope • Not enough time or money • Bad planning and scheduling • Unexpected changes • Local market nuances • Poor trade procurement • Contractors cutting corners • No accountability on site • Insufficient technical knowledge • Stakeholder confrontation
  14. 14. Professional construction management protects your business How can a construction manager help? 1. Consultancy 2. Coordination 3. Control 4. Communication
  15. 15. Professional construction management protects your business What are the benefits? • Avoid delays • Prevent cost hikes • Increase certainty of outcome • Save time and costs • Minimise claims and disputes • Reduce HSE incidents • Quality finished product
  16. 16. For more information, please contact: Dave Colverson Regional Director Construction Management, Asia Pacific +65 6494 3786 Kevin Hastings Regional Director Construction Management, Australasia +61 2 9220 8655 Jipu Jose James National Director Construction Management, India +91 9884 032 233 Darren Wee Local Director Construction Management, Singapore +65 6494 3966