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Tech firms spending more on risk management
By siliconindia
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Tuesday, 17 November 2009, 22:09 IST |
3 Comments
Bangalore: The slowdown has forced many IT companies to increase their focus on risk management and made them value it more highly, according to a study conducted by a risk management and insurance brokerage company.
"It is not surprising that over a third of participants expect spending on risk management to increase over the next 18 months," says the Risk Management Study conducted in the European market unveiled by Marsh India Insurance Brokers.
"Though the study was conducted for the European market, the report has relevance for India considering that 80 percent of business for IT/ITeS companies in the country comes from the U.S. and European markets. It is critical that Indian technology companies understand the risks they face in these markets as well as the changing attitude towards managing these risks," says Sanjay Kedia, Country Head and CEO, Marsh India.
For technology companies, issues around supply chain form the biggest component of risk. "The number of steps needed to process raw materials and components, turn them into products and put them in the hands of customers is increasing, and with them, the interdependence of customers, suppliers and technology. Increasingly sophisticated intangible and tangible assets within the supply chain, such as fit-for-purpose software, the Internet and intellectual property, only serve to create further complications," says the report.
Most companies were reviewing their coverage now, and so 'the quality of coverage for most companies has improved'. "Besides, most companies are also reviewing the limit which they were buying, which means that companies are now allocating greater resources to buy larger limit to protect against unforeseeable changes," says Kedia.
According to Kedia, mid-size and smaller companies in the technology space are a lot more aware now.