How to develop a Quantification model to determine Risk Scores in design activities

 How to develop a Quantification model to determine Risk Scores in Design activities & a way forward to minimize Risk Score

List of activities performed by Architects, interior & MEP designers

Below is a list of 225 activities usually performed by designers (for a typical mid-size construction project) during various design development stages.

Architects: 118 design activities identified (For the design of the structure=7, building architect=65, Façade=22, external development=12, and softscape=12)

Interior designers: 37 design activities identified (For the design of finishing works, fixtures & equipment, and artwork)

MEP designers: 70 design activities identified (For External &internal electricals=32 and Airconditioning using VRV and basement ventilation=38)

A brief narration of these 225(118+37+70) design activities can be seen in annex 21A(2),21A(3 )&21A(4) respectively at the website https://www.ethicalprocesses.com 

The number of activities can be more or less than 225 at the discretion of designers/organisation, depending on the type of organisation structure, project size, number of design packages and software used, etc.

Types of Risks in the building design processes (Architecture or Interior or MEP)

Following are the 6 (six) types of critical risks that can occur in case design is not performed correctly or diligently or by inexperienced designers.

1. Not meeting customer’s requirements

2. Quality of building attributed to poor design causing occupant dissatisfaction

3. Safety of building, e.g. Earthquake, fire hazards, etc

4. Not meeting building codes or zoning regulations, or environmental requirements related to pollution, sewerage disposals, etc 

5. Project Cost overruns and leading to non-competitiveness and funds constraints

6. Delays in construction and Project delivery due to design errors needing reworks

How to determine risks

The ultimate objective of risk assessment in design functions is to prevent risk occurrences by initiating countermeasures for avoiding risks.

The activities to assess risks include

i. Designate Risks Assessment team (CFT-Cross-functional team)

ii. Identify aspects that can contribute to core activity level risk

iii. Design a risk assessment template for the core activity level

iv. Software programming of risk templates.  

v. Populate the “Risks” template by the design functions in consultation with CFT

 Proposed Quantification Model for risk assessment -

The quantification template will be populated by assessing the impact on the following in case design activities are performed incorrectly or without due diligence.

The impact is to be ascertained on the following scales.

i)           The severity of impact in case of risk occurrence (10-point scale)

ii)         Detectability stage of risk being found out (10-point scale)

iii)       Occurrence -the likelihood of risk occurrence (10-point scale)

The severity score: Determined based on 10 a point scale based on impact /adverse implications on aspects as below:

i)Severity - adverse impact on:

a) Profitability

b) Statutory compliance

c) The strategic value of the company/company image affects customer retention

d)Financial statement accuracy

e) Reliability/effectiveness of the design process being assessed

Assigning severity scores

·               One is the lowest adverse impact on business.

·               10 being the highest adverse impact on business

ii)The detectability score: Determined based on a 10-point scale based on the detectability of adverse impact at which stage as below:

Detectability stage (any 1 of 5 stages)

·      Stage 1) At the very 1^st stage, i.e., by the designer himself/herself while initiating or creating the design   

·      Stage 2)At the design review /peer review or approval stage within the design function or outsourced consultant vetting design  

·      Stage 3) At the subsequent process/intermediate stage, e.g., the construction stage of the building  

·      Stage 4) At the corporate (or in-house audit by the Project head) stage within the organization

·      Stage 5) At the customer end after the handover of the building area (outside the organization)

Assigning detectability scores

·               One is the lowest adverse impact on business (eg. Detection at Stage (a) above

·               10 being the highest adverse impact on business (eg. Detection at Stage (e) above

iii) Occurrence /likelihood score: Determined based on a 10-point scale based on design activity going wrong considering below cumulative factors:

a) Skill level of the designer performing an activity

b) Segregation of duty for activities/role confusion

c)Completeness of execution of design activity

d)Validation at each stage of the design activity

d)Correctness of source data (e.g., customer requirements, Quality standards, statutory requirements)

e) Adequacy of internal controls

f) Robustness of systems and updated SOP

g) Authorisation norms for design activities creation, editing, deleting, viewing, and approval

h) Designing Process Logic correctness/accuracy of design assumptions  

i) Other aspects: the complexity of business, change management, ethics

Assigning occurrence scores

·      1 being very low i.e.least number of causes from the below list

·      Ten being extremely high, i.e., a large number of causes from the below list

Determining Risk score  

For this Impact, the exposure matrix is to be developed based on the score to be computed as per the methodology below:

·      Determining Impact score on a 100 Point scale (based on multiplication of score at (i) &(ii) above as per activity

·      Determining Exposure score on a 10 Point scale (based on the score at (iii) above as per activity

In case, according to the design team, any of the activities marked as a), b), c), and so on onwards in points i), ii), iii) in the templates that influence the score -determination are not relevant/not applicable, the same need not be considered for scoring.

Illustration Template for one Key Core Process:

The below illustration is based on design activities performed for one package, i.e., “Designing of the building structure,” but precisely 100% of the same template/model can be adopted for assessing risks vis a vis any package in Design of architecture or Interior design or MEP design

The impact scores or exposure scores indicated in the above template are hypothetical and only for the reader’s understanding. The scores may vary considerably as per the actual situation at the designer's end based on the type of construction project, design software, and organisation.

 Way forward to Minimize the Risks Score  

·      Engaging professionally qualified designers

·      Ensuring design activities incorporate national &international quality standards

·      Reviewing design activities from health & safety perspectives before approving

·      Ensuring transparency (amongst designers) of design calculations

·      Applying good design practices

·      Using licensed software

·      Building internal controls to prevent giving and taking bribes

·      Developing and following SOP

·      Developing profiles at the granularity levels

·      Attaching profiles diligently

·      Implementing S-O-D (Segregation of duties) concepts while assigning roles

·      Assigning roles judiciously based on competency

·      Encouraging self-audit by designers

·      Continuous competency enhancement of designers at each level

·      Introducing performance measures through KPI 

Handbook of the author 

A template illustrating risk classification as High, Medium, or Low at the core activity level is included in chapter 10 (annex 13E) in the handbook of the author and titled” ETHICS in the real estate and hospitality industry, Volume 1- Architectural, Interior design, and MEP services. “