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"Risk Management"
Companies fail to take threats to intellectual property seriously
Companies are failing to take dangers posed by threats to their intellectual capital as seriously as they should, according to new research.
A survey by BrainNet in association with the European Leaders Network, found that the possibility of losing original ideas was potentially the most damaging kind of risk faced by organisations. Yet fewer than half of the senior procurement professionals questioned said it was an area their company focused on.
BrainNet, based in Bonn, Germany and operating in Europe, China and the US, says procurement leaders must take action to deal with threats by various kinds of risk. The report's authors argue that risk is closely linked to opportunity. They say the extent to which an organisation is successful in managing risk is one of the most important indicators of its performance.
The potential for damage caused by a variety of risks is rising and that CPOs and other business leaders must become more aware of the challenges they face, BrainNet says. These include risks created by fluctuating prices for raw materials and energy to geo-political risks. In the report, Risk Management Reloaded, BrainNet calls for a rethink in the role of procurement within organisations.
As well as the skill of generating savings and buying in innovations, they say, risk management is now one of a procurement organisation's core skills. Yet the prevailing focus of procurement risk management today is on the “traditional themes of supplier management, supply and compliance”. Procurement's role simply as a “supplier manager” is no longer adequate.
In future, it will need to be a risk and “relationship and interface” manager, not only with suppliers but with other stakeholders. It says procurement leaders should be involved in managing risks and processes not yet within their sphere of influence.
The survey follows the results of an earlier study by BrainNet, released in February, showing that risk management was now one of the most pressing concerns for CPOs. The management of strategic issues including risk were now key to gaining competitive advantage, it said.
The latest survey was carried out among more than 200 senior executives who are responsible for procurement and supply management at mainly large companies across all major sectors.
It discovered that the loss of intellectual property was perceived as a serious risk by 55 per cent of those questioned. This was followed by risks associated with outsourcing, considered serious by 53 per cent. Supply risk was the third most serious, highlighted by just over half of those questioned.
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