Operations Risk Management Spending Will Increase In 2007

The number one risk factor is failure of supply chain.

In the next 12-24 months, 46% of companies surveyed by AMR Research report that they are planning to either implement or evaluate technology to aid in risk management.

"As firms move to leaner operating models and leverage global sourcing models, uncertainty in both supply and demand is growing along with supply chain complexity," said Mark Hillman, research director, AMR Research. "As a result, the need to manage risk, specifically in supply chain, is on the rise."

External events are driving firms to invest in this technology. The report found that supplier failure is the number one risk factor for 28% of firms.

Additional survey results include:

  • 33% of firms say they have dedicated budget line items for supply chain risk management activities.
  • 54% of firms plan to increase their budgets for risk management over the next 12 months. Of those firms, the average spending increase will be 17% year over year.
  • The top areas of application spending to support supply chain risk management are sales and operations planning, inventory optimization, business intelligence and supply chain analytics, and supply chain visibility and event management applications.

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