ListofTables
Table 1 – Literature Review
Table 2 – EEFs identified in the Battersea Power Station Redevelopment Phase II project
ListofFigures
Figure 1 – Factors influencing complexity in construction projects, (Wood and Ashton, 2009)
Figure 2 – PESTLE analysis for the Battersea Power Station Redevelopment project
Figure 3 – SWOT analysis for the Battersea Power Station Redevelopment project
Figure 4 – OPAs identified for the Battersea Power Station Redevelopment Phase II project
Figure 5 – Rich Picture showing the objectives of Battersea Power Development Company
Abstract
This report uses the Battersea Power Station Redevelopment - Phase II project in London as a case study to investigate the idea of risk complexity in construction projects. The report begins with the definition of risk and the chapterproceeds by defining complexity and how it relates to risk. The effects of risk complexity on a project are discussed, including the requirement for greater resources, expertise, and stakeholder participation, as well as more complex risk assessment and mitigation strategies. The project management framework is studied with the APM Golden Thread focusing on the construction industry. The report additionally looks at the PESTLE and SWOT analysis to identify the factors affecting the risk complexity in context with the Battersea Power Station redevelopment project.
Keywords: Risk, Risk Complexity, APM Golden Thread, EEF’s & OPA’s.
Introduction
AccordingtothePMBoKGuide (PMI2017,p.720),theriskis“anuncertainevent orcondition that, if it occurs, has a positive or negative effect on one or more project objectives.” As a result, uncertainty relates to both the possibility that a risk event will occur and how it will affect the objectives if it does. Two categories of uncertainties have the potential to result in risk occurrences. While stochastic changes in a parameter's future state are represented by aleatory uncertainty, epistemic uncertainty refers to ambiguity brought on by incomplete knowledge or information (Aven 2016). On the other hand, various researchers consider project complexity as the source of risk events (Qazi et al. 2016). Because complexity and uncertainty have conceptually similar links to risk, these phrases are often used interchangeably. (Padalkar and Gopinath 2016; Erol et al. 2020).
Uncertainty is related to a risk event’s occurrence and its effect on project objectives. There are two types of uncertaintiesthat cantrigger riskevents: aleatoryuncertaintyand epistemic uncertainty (Erol et al 2020). Project complexity is considered a source of risk events where according to one perspective, uncertainty is a driver of project complexity, while the second perspective advocates that complexity is the consequence of uncertainty.
The Battersea Power Station Redevelopment project is a significant mixed-use development located in London, United Kingdom. The project involves the transformation of the decommissioned Battersea Power Station into a new development consisting of residential, commercial, and retail spaces. It aims to create a new destination for London that is centred around the iconic power station and its historical significance. It also aims to provide significant economic benefits to the local community by creating new jobs, increasing tourism, and improving local infrastructure. The project is led by a consortium of private developers and has been in development since 2013.
Mace and the Battersea Power Station Development Company had several objectives for the site's redevelopment. These included relocating two peregrine falcons to a purpose-built tower, creating employment opportunities and building skills for local people, sensitively restoring and conserving the Grade II* listed building, implementing clean energy solutions, reducing emissions from construction vehicles, and providing on-site medical care and
education on health and wellbeing for workers and the local community. These objectives were achieved through partnerships with Wandsworth Council, Heritage England, King's College London, and other stakeholders.
Literature Review
Authors Purpose
Johansenet al.(2014)
Definingcomplexity forriskassessment
Woodand Ashton (2009)
Factorsof complexityin constructionprojects
Bertelsen (2003) Complexityconstructionina newperspective
Baccarini (1996) Theconceptof projectcomplexity
Luo,etal. (2017) ConstructionProject Complexity
Type of Source Summary
Journal Paper
Lackofawarenessofoutcomes,especiallythose ofsub-activities,andlimitationsin comprehensionofthesociotechnicalsystem's dangersunderlieanactivity'scomplexity.
Journal Paper Constructionprojectsmaybecomecomplicated asaresultofpoorcommunicationand inaccurateorpartialinformationgeneration.
Conference Paper Inthepast,constructionprojectshave producedpoorresultsintermsofcost, scheduling,andquality.
Journal Paper Understandingprojectcomplexityiscrucialto ensuringsuccessforallpartiesinvolvedas buildingprojectsareextremelycomplexand difficulttomanage.
Journal Paper Successfulconstructionprojectmanagement requiresanunderstandingofandabilityto manageprojectcomplexity,andsolutionsfor reducingcomplexitycanassistreduceriskin majorinfrastructureprojects.
Fangand Marle2013
Dealingwithproject complexityby matrix-based propagation modellingforproject riskanalysis
What is Risk Complexity?
Journal Paper Riskmanagementtools,suchasanalytical designplanningtechniques,matrix-based methods,andflexiblemanagerialframeworks, canbeusedtocontroltheinterdependentrisks causedbyprojectcomplexity.
Despite having great knowledge of the effects of its sub-activities, an activity is deemed complicated if we have little understanding of its overall effects. (Aven and Flage 2018). Complexity is an acknowledgement of limitations in understanding the sociotechnical system in allitsoperationalcontextsandhowriskcanbeassessed,basedontheavailable knowledge and assumptions about the system elements. A broad phrase used here to describe specific inputs, components, processes, risks, events, situations, and so forth is called an element (Aven and Flage 2018, Johansen et al. 2014). This approach establishes a clear connection between complexity and risk.
How Risk Complexity Affects a Project
Thelikelihoodandpotentialimpactofarisk,thenumberofstakeholdersinvolved,thedegree of ambiguity or uncertainty surrounding the risk, and the availability and calibre of data and information to guide risk management decisions are just a few examples of the many variables that can affect how complex a risk is. More resources, knowledge, and cooperation among stakeholders may be needed to manage complex hazards, along with more advanced riskassessmentandmitigationtechniques.Althoughtherisklandscapemaychangeovertime and necessitate continual monitoring and adjusting of risk management techniques, complex hazards may occasionally also necessitate more adaptable and flexible risk management approaches.
Risk Complexity in Construction Sector
Construction is a very broad topic area with a wealth of knowledge pertaining to it and still, there is little published literature when it comes to complexity in the construction sector (Wood and Ashton 2009). Construction projects have historically had poor cost, timing, and quality outcomes (Bertelsen, 2003). It is widely accepted that the explanation for the weak performance is that the design and construction process was especially challenging for a variety of reasons. Early project complexity assessment is essential for efficient project management and minimising the risks posed by complexity. The project will therefore be better understood as a result.
According to Baccarini (1996), the construction process may be the most complicated endeavour in any industry, as seen in Table1, however the industry has had a lot of difficulty keeping up with the complexity of large-scale construction projects. Understanding project complexity and how it may be managed is essential for ensuring that projects are successful for all parties involved.
Factors Influencing Complexity in Construction Projects
Itispossibleforconstructionprojectstobecomplicated,andavarietyoffactorscaninfluence this. Wood and Ashton (2009) listed many criteria in their research, analysing these with respect to project management rather than technical, some of them are rated in Figure 1
according to their index of diminishing importance. Poor communication channels are one of these, and they can result in misunderstandings and mistakes when carrying out tasks. Problems in construction projects can also result from poor information generation and usage. Decisions may be made based on incomplete or faulty data without accurate and timely information, which could cause rework or delays.
The strong interdependence between tasks in many overlapping project components is another consideration. The failure of one activity can have an impact on the progress of the entire project because activities are interdependent. Similar to this, a task's high degree of interdependence across different trades' tasks can add to the complexity of the project. In these situations, trade experts must collaborate and coordinate their efforts in order to properly fulfil assignments.
The complexity of a project can also grow when someone is performing or managing a function for the first time since inexperienced team members may need more assistanceand direction. Complexity can also be increased by the rigidity of sequence between multiple operations inside a package, between various packages within a phase, and between numerous jobs within an operation. This means that any modifications or disruptions to the anticipated order of tasks can have a big impact on how rapidly the project moves along, and it might be difficult to make changes right away. Project managers can identify potential causes of complexity and take action to reduce their consequences by being aware of these issues, in general.
During the past two decades, an increasing number of studies have been prompted by the construction industry's rapid rise of complex projects. These studies contend that project complexity comprehension is a critical element of successful construction project management (Luo, et al. 2017). The complexity of a project creates a network of interdependent risks that are related to each other (Fang and Marle 2013). Researchers have tried to manage project complexity by using risk management techniques. Some examples include adopting analytical design planning techniques, matrix-based methods for modelling risk interactions, and flexible managerial frameworks. Complexity reduction strategies have also been found to be beneficial in managing risk in large infrastructure projects (Luo, et al. 2017).
Golden Thread Narrative
The APM (Association of Project Management) Golden Thread report is a framework that providesguidancefor effectiveprojectmanagement,which includesriskmanagement asone of its key components. The framework emphasizes the importance of developing a “Golden Thread” of project information that connects the project’s strategic objectives, benefits, scope, and risks to its delivery and operational activities. The APM Golden Thread has several objectives, including providing a common understanding of project management principles and terminologies across various sectors such as construction, transportation, and IT. It emphasizesthesignificanceofprojectmanagementasacriticalskillsetforbothorganizations and individuals and promotes the use of consistent approaches, tools, and techniques to
improve project delivery and outcomes. The report also focuses on integrating risk management into project management practices, highlighting the importance of learning from both project successes and failures to continuously improve project management practices and outcomes. Finally, the report encourages the use of digital technologies and data-driven approaches to support project management.
The construction industry is identified as an important industry for the project profession in the APM Golden Thread study, which emphasises the value of project management in this field. According to the report, 20% of employees in the construction industry work in project management, making it one of the industries with the highest concentration of project professionals.The research alsoemphasises the importance of the construction sectortothe UK economy, which generates an estimated £370 billion in annual revenue and accounts for 6% of the country's GDP. In order to guarantee that projects are executed on time, within budget, and to the appropriate quality standards, the report emphasises the significance of competent project management in the construction industry. According to the report, enhancing project management in the construction industry may lead to significant cost savings, decreased risk, and improved project outcomes.
The APM Golden Thread report emphasizes the importance of integrating risk management into project management practices. This is because risk management is essential for identifying, assessing, and mitigating potential risks that could impact project delivery and outcomes. The report recommends that risk management be incorporated into all stages of the project lifecycle, from project initiation to project closure. The report also stresses the importance of having a clear understanding of risk management terminology and principles, as well as effective stakeholder engagement and communication in risk management. This includesinvolvingstakeholdersinriskidentificationandassessment,communicatingrisksand mitigation strategies, and monitoring and reviewing risks throughout the project lifecycle.
Mace is a global construction and consultancy firm that has a strong focus on risk management in its projects and places great importance on effective project planning and delivery. Mace specialises in construction management and offers client speed, agility, and flexibility when handling challenging projects across a range of industries and geographies. They manage projects from design through delivery in collaboration with clients and expert teams, with a special emphasis on risk-sharing, adaptability, and integrated teamwork to achieve the highest levels of effectiveness, quality, and value engineering. To successfully manage the many project components while putting a strong emphasis on openness, cooperation, and mutual gain, effective leadership and management are essential.
An example for Mace’s construction management project is the Battersea Power Station, for which Mace is the project manager for its second phase.
Battersea Power Station Redevelopment – Phase 2 Background
After being decommissioned in 1983, the Grade II* listed Battersea Power Station on the south bank of the river Thames received a significant renovation. The Power Station was converted into a mixed-use development with retail, food and beverage outlets, an events venue,officespace,andresidentialhousesaspartofPhase2oftheredevelopment,forwhich Mace served as the construction manager. A six-acre public riverside park and an energy centre are also included in the plan. The project preserved the power plant's historical characteristics while giving it a new, modern use that generated over 25,000 jobs. One of the new office buildings is Apple's new campus in London.
A six-acre public park, 18 acres of new public space, 5000 square feet of office space, 200 shops and restaurants, 254 apartments within and above the power station, and other amenities are all part of the £750 million Phase II of the Battersea Power Station Rehabilitation project. The four 101-meter-tall chimneys of the power plant will also be disassembled and rebuilt, with a glass viewing platform on one of them so guests can obtain a 360-degree view of the city. There is also an auditorium with seating for 2,000 people.
PESTLE Analysis
PESTLE analysis is a pragmatic method for examining external variables that may have an impact on a project or organisation. It stands for Political, Economical, Sociological Technological,LegalandEnvironmentalaspects.Hence,theexternalfactorsidentifiedforthe redevelopment of the Battersea Power Station Phase II are shown in Figure 3.
SWOT Analysis
The identification and analysis of internal and external elements that may have an impact on aproject,anorganisation,oraproductaredoneusingtheSWOTanalysis,astrategicplanning tool. Strengths, Weaknesses, Opportunities, and Threats is referred to as SWOT.
Opportunities and threats are external elements outside the organization's control, whereas strengths and weaknesses are internal factors under the control of the organisation. In order to build strategies and plans for accomplishing the organization's goals and objectives, a SWOT analysis is used to determine the organization's strengths and weaknesses as well as
the opportunities and threats in the external environment. Therefore, the external and as well as the internal factors are identified using the SWOT model in the Figure2.
EEF’s and OPA’s
According to the PESTLE and SWOT analysis above, additional factors are identified to understand the project environment.
Enterprise Environmental Factors (EEF’s) refer to conditions, not under the control of the projectteam,thatinfluence,constrain,ordirecttheproject.Theseconditionscanbeexternal and/or internal to the organisation. EEF’s are considered as inputs to many project management processes and they may enhance or constrain project management options, meaningtheymayhaveapositiveornegativeinfluenceontheoutcome(PMBoK,2017).EEF’s asidentifiedinthisreportfortheBatterseaPowerStationRedevelopment–PhaseIIarelisted in Table 2
EEF Type Factor Influence
Regulatory Requirement
Regulations and legislation protecting listed buildings, such as the UK's Planning (Listed Buildings and Conservation Areas) Act 1990, need to be followed by the project.
Infrastructure
An old structure like the Battersea Power Station would require extra care while working and may not have the connectivity of electrical requirements
External
Internal
Site Location and Access
Community and Stakeholder Concerns
Environmental Regulations
Availability of Skilled Labour
The location of the building and its accessibility could impact the project timeline and budget.
The building's historical significance is of great importance to the neighborhood, and the renovation plans should take this into account.
The environmental impact of the project including energy consumption, noise pollution, waste disposal and the nearby river should be considered
A Grade II* listed building rehabilitation requires specialist skills, and the availability of such personnel may have an impact on the project's budget and timeline.
External
Internal/External (Multiple stakeholders)
External
External
Organisational Process Assets (OPA’s) are the plans, processes, policies, procedures, and knowledge base specific to and used by the performing organization. These assets influence themanagementoftheprojectanditsperformance.OPA’smayincludetemplates,checklists, etc, that have been developed and refined through experience (PMBoK, 2017). OPA’s for the Battersea Power Station Redevelopment – Phase II project are identified in Figure 4.
Rich Picture
According to the Positive Energy (Issue 4) report by The Battersea Power Development Company, they have been creating sustainability plan and evaluating results in relation to their social and environmental aims since 2012. Their drive to transform sustainability strategy into an even more comprehensive ESG strategy, including all Environmental, Social, and Governance issues across the project, began in 2021. They are concentrating on four interconnected sustainability themes in order to realise their vision:
• Economy: encouraging and supporting small companies in your community and making a positive impact on the local, national, and global economies.
• Environment: conserving resources, reducing climate change's effects, and upholding our duty as the Battersea Power Station's heritage's custodians.
• Community: talking to people about the changes taking place at Battersea Power Station, supporting neighbourhood organisations, and developing a town centre with amenities accessible to all.
•JobsandEducation:providinginformationaboutemploymentprospectsatBatterseaPower Station, creating thousands of jobs, and providing training programmes to ensure that local residents can take advantage of these changes.
TheseimportantideashavebeencreatedanddiscussedwithawiderangeofBatterseaPower Station regeneration stakeholders by a Rich Picture depiction. Rich Picture is a flexible graphical technique which is used as part of the soft systems methodology (Checkland et al. 1990).
Bibliography
GradeII*listedbuilding: A building's particular architectural and historic interest is recognised and celebrated through listing, which also subjects it to the planning process so it canbepreservedforfuturegenerations.5.8%oflistedbuildingsareGradeII*buildings,which are important structures of greater than special interest. (Historic England n.d.)
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