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Over 40 Per Cent Of Middle Eastern Companies Lack Risk Policy - CMCS Risk Survey
Published Aug 11, 2010
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- Comparative study of UK & ME organizations shows significant gap in risk management adoption.
- 59 percent of risk-conscious ME firms develop complete risk management plans for each project.
- More frequent updates to region’s corporate risk databases needed.
A comparative survey of UK and Middle Eastern companies conducted by Collaboration, Management and Control Solutions (CMCS) shows that 59 percent of Middle Eastern respondents have a risk management policy in place, as opposed to 73.5 percent in the UK. Of those Middle Eastern organizations that do have policies, 59 percent fully implement the policy and adhere to pre-defined procedures for risk management, compared to 73.4 per cent in the UK. The results highlight the need for more improvements to the region’s risk management attitudes and practices. A risk policy is an indication of whether senior management considers risk management important to their business success or not, and has to do with the commitment to adopt risk management across the organization.
The CMCS study, which focused mainly on project-based construction firms, analyzed the degrees of adoption of formal risk management policies and procedures and the importance given to risk management as a tool for business success. Among the key findings from the Middle East were that 45 percent of firms with formal risk management policies have a dedicated Risk Management Officer to handle the risk management process (UK: 51 percent), 49 percent do not start projects without a complete Risk Register (UK: 69.6 percent), 61 percent assess each risk against the probability of occurrence and impact (UK: 79.2 percent), and 69 percent of management identify risk response actions for high-exposure risks (UK: 72.3 percent).
“Although our survey indicates an upward trend in risk management adoption in the Middle East, it also shows more room for improvement in terms of policies and practices. Project-based companies are especially encouraged to enforce better risk management frameworks in light of the volatility of their markets. While projects are inherently risky, a better understanding of potential hazards and how to prevent or deal with them puts a company in a more advantageous position, which makes sound business sense,” said Bassam Samman, CEO and Founder, CMCS.
Survey results also showed that, among Middle Eastern firms with risk management provisions, 53 percent develop a complete risk management plan for each project (UK, 69.3 percent); 53 percent formally implement their plans and conduct periodic risk assessment reviews (UK, 71.5 percent); and 46 percent update their risk database after project completion (UK, 39.6 percent). Risk management studies are of significant value to the region, where project and investment failures commonly trace back to poor risk management strategies.
UAE-based CMCS is a leading regional provider of project portfolio management solutions for project-driven businesses. It uses advanced solutions from Oracle Primavera, Hard Dollar, Deltek, EcoSys, ADePT, eTimeMachine, and Synchro to meet the unique needs of various sectors such as Engineering & Construction, Power, Energy & Process, IT & Telecommunication, and Government.
The company is a registered education provider for the Project Management Institute, the Association for the Advancement of Cost Engineering, the Construction Specifications Institute, and the International Institute of Business Analysis. Aside from the UAE, CMCS also serves Qatar, Bahrain, KSA, Egypt, Kuwait, Jordan, Oman, Libya, Kenya, India, Italy and Greece.
Posted by
VMD - [Virtual Marketing Department]
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