Newforma Commissions Study on Risk Mitigation in AEC

3 Jun, 2008

Survey explores executives' views on risk exposure and current practices.

A newly released survey has found consensus among leading AEC principals, counsel, and professional liability insurers that many of the industry's current practices, despite being designed to shield architecture and engineering firms from risk exposure, are in fact increasing the likelihood of project failure. The research is available in a white paper titled Mitigating Risk in AEC Project Execution: Perspectives from Principals, Counsel and Insurers by Spar Point Research.

Newforma commissioned Spar Point to conduct the research based on Spar Point's successful completion of a previous Newforma-sponsored white paper titled Improving AEC Project Execution: Lessons from 11 Industry Leaders. The focus of the most recent survey was to investigate the challenge of risk mitigation in project delivery.

The participating executives agreed that more frequent and deeper information sharing across the entire project team can improve the team's clarity of understanding, reduce the likelihood and severity of problems, and increase control over a project's outcome, according to the study. However, opinions on how best to achieve the transparency and knowledge-exchange necessary for this type of "informed control" were divided between the newly emerging data-centric design and construction processes supported by building information modeling (BIM) and a more people-oriented investment in developing and supporting high-level project management methods and skills. Spar Point president of research Bruce Jenkins attributed this duality to the underlying process intensity of AEC projects.

"While BIM technology offers unquestionable improvement in clarity around the design, the processes required to manage the project 'outside' the model are still being defined," said Jenkins. "At transitional times like these, the need for experienced project managers with the necessary skills to identify gaps or anticipate new work processes is even more accentuated."

Several executives stated that they are looking ahead to new technologies, essentially, extensions to current BIM technology that would also improve the process and clarity of project communications outside the building model in order to prevent other risks to project success.

"What's surprising is the degree to which the industry has recognized software technology as an accepted, if not expected, path to improvement in communicating design intent, but is still in the early stages of investigating technology for challenges such as poor management of client expectations, inadequate project risk assessment, nonstandard practices, and other sources of project risk identified in this study," Jenkins said.

Firms interviewed for the study include Ames & Gough, Barry B. LePatner & Associates, Burns & McDonnell, Hanson Bridgett, HOK, NBBJ, Perkins+Will, Noble & Wickersham, Victor O. Schinnerer & Company, Walter P Moore, and XL Specialty Insurance Company.

The full research paper, which includes detailed quotations from interviewees on every area of risk mitigation, is available to those who register on Newforma's Web site.