India faring well in managing risks

After surpassing a catastrophic period of 16 months, engineering and construction companies are hoping to significantly reduce project failure, by transforming the way they manage risks across their portfolio. According to a survey conducted by KPMG, companies in India are better prepared to undertake risk management and carry forward with their expansion plans in the construction market. The report, namely, "No turning back, An industry ready to transcend", KPMG's 2021 Global Construction Survey,", suggests a bold approach being considered by construction entities with survey respondents suggesting varied risk management which will be considered from henceforth.

The 13th edition of the Global Construction Survey by KPMG presents an optimistic outlook, with two-thirds of project owners predicting an expansion in their capital programs, and half of all respondents very or somewhat optimistic about the future direction of the construction market.

Reflecting on the surveys findings, Suneel Vora, Partner, Major Projects Advisory, KPMG India said, "KPMG's Global Construction Survey 2021 reflects on the views of over 186 global industry leaders to provide specific answers to these aspects. For Indian companies with major capital investments and construction projects, specific actions include collaborative project teams, improved risk sharing, integrated project information systems, common technology platforms, and leadership level commitment to embrace diversity. The time for reshaping business models for capital investments, program and project delivery, and portfolio decisions is now."

60 percent of the survey respondents said they want to gain a more holistic view of risks, by increasing integration and visibility between enterprise risk management, portfolio risk management and project risk management. Out of these respondents, two-thirds plan a moderate or high level of investment in risk management.

Around 43 percent of survey respondents mentioned that they plan to make significant investment in technologies to enhance delivery of capital programs. The report records adoption of technology as the second most important factor to enable engineering and construction companies to cope with disruptive events. The survey also mentions that fragmented supply chains, and a constant stream of new software, companies can struggle to effectively integrate risk management and project management. KPMG said that only 16 percent of the executives surveyed say their organisations have fully integrated systems and tools.

"Invest in portfolio planning software and a formal, embedded asset management team. This should help ensure that capital allocation decisions reflect the organization's wider interests, and that investments in projects generate the optimum Return On Investment (ROI)," the report suggests on future strategy based on its current industry trends.