An investigation into the implementation of enterprise risk management in Senwes to reduce procurement risk
Abstract
The study is based on gathering information on employee perception about risk in
procurement and the application of an ERM framework on procurement to reduce related
risks. ERM is an important part of an organisation when the company wants to remain
competitive and relevant in their industry. Firstly they need to understand and know the risk
they are exoposed to, and secondly they need to proactively manage identified risk on a
continuous basis, in an attempt to incresase shareholder value and embed ERM into their daily
operations. Procurement is one of the risks that companies are exposed to, starting by
identifying the supplier to the quality rendered by the identified supplier and to the
commitment displayed by the board and everyone intrumental to the procurement process. The
study is qualitative and explores probable procurement risk and the need for the procurement
practitioner to know and understand their purchasing mandates. Probability, snowball
sampling was used. Data were collected through structured questionnaires, and loaded into
the Statistical Package for the Social Sciences (SPSS), a software for analysis.
This survey has shown agreement from respondents that the board is at the top of setting the
tone in Senwes. This is vital in developing and maintaining the ethical integrity of the
business. Without it, the ability to mitigate the risk of something going wrong is significantly
impaired. This is encouraging news and positive affirmation that organisations are responding
to the emerging and increasing risks around conducting business on an ethical basis across the
enterprise.
Managing risk becomes a very strong competitive advantage when an organisation can
identify risks and opportunities earlier than competitors, and when they are better at managing
foreseeable and unpredictable events.
Enterprise risk management framework should be applied in procurement planning up to the
level of selecting the best suppliers.