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.