Upside to Economic Downturn

Risk management in procurement remains “a white-hot topic,” say researchers at Accenture. In a recent “point of view” paper, analysts add that the global recession made companies significantly more aware of the need for advanced risk management practices.

It is Accenture’s position that the need for a structured risk-management capability within (as well as beyond) the procurement organization is significant.

To validate its view that risk management in procurement requires efforts beyond what most companies are doing—and to identify leading practices, metrics and solutions—Accenture partnered with Professor David Simchi-Levi of the Massachusetts Institute of Technology (MIT) in Boston on a Procurement Risk Management Research Study.

“Is it possible that the recent economic downturn actually spawned some good news?” researchers asked. “In procurement risk management, that might be the case.”

According to survey results, the global recession made companies significantly more aware of the need for such advanced practices.

Accenture’s survey, which was conducted last year, noted that 85 percent of respondents believe that volatility will remain high in the near future, thus implying that formal and sustained risk management efforts should be enacted to countermand that trend.

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