Hazardous Industries Ready for a Giant Leap Toward Dynamic and Simulated Risk
In Sphera’s recent survey, industry leaders express need for technology solutions that help achieve operational resilience
Chicago, IL -- Sphera, the leading global provider of Integrated Risk Management (IRM) software, data and consulting services, has released the latest results of its annual Process Safety Management/Operational Risk Management survey.
The 2020 survey marks the industry’s fifth consecutive report on the trends of Process Safety and Operational Risk Management. The results confirm that businesses are making the leap to dynamic, real-time risk identification and management from conventional siloed, static risk assessments. This “leap” into innovative software and technology deployments allows companies to make better business decisions across the organization. An interoperable, data-driven approach to process safety and operational risk promises new predictive insights that were previously unobtainable.
The pandemic along with fluctuation in oil and commodity pricing has impacted operating margins, yet has given many companies the opportunity to consider their technological capabilities related to visualizing, forecasting, simulating and mitigating major hazard events while assessing their operational resilience.
“Being operationally resilient means being able to maintain or optimize operations during unexpected business shocks,” said Scott Lehmann, Sphera’s vice president of product management for Operational Risk Management, who co-authored the 2020 survey report. “Many companies found themselves wondering if they had embraced simulated, dynamic risk management tools earlier whether they would have seen less of a shock manifest itself throughout industry when the pandemic accelerated and oil prices ran out of steam.”
Like the previous surveys, the results highlight the importance of technology to improve Process Safety and Operational Risk Management. Virtually all the respondents (91%) said technology has made their companies and workers safer (up 11 percentage points from last year).
While companies are taking safety seriously—88% say safety is part of corporate value structure—industry leaders report significant gaps (81%) between process safety intent and reality. Half of the respondents (51%) only review risk every 1 to 6 years, 53% are only assessing a portion of their facilities, and only 68% are able to complete their scheduled asset integrity inspections. This results in incomplete, lagging risk indicators with only 37% proactively managing process safety.
Digitalization allows companies to make an unprecedented leap in collecting and analyzing operational risk data in real-time. Unsurprisingly, 6 out of 10 survey respondents said they are investing in technologies to create data-driven business processes across the organization, integrating Environment, Health, Safety & Sustainability (EHS&S) and Operational Risk Management (ORM) data, and half (52%) said they are investing in solutions to map dynamic risk pathways.
“The technology which connects the dots, joins the disparate processes and workflows, and illuminates the operational reality in real time, simply hasn’t existed until now,” added Lehmann. “Companies that embrace these technologies will finally be able to achieve a holistic, end-to-end view of their operational risk.”
The 2020 Sphera Process Safety Management (PSM)/ORM Survey was conducted online between April 27 and June 29, 2020. A total of 192 professionals participated in this year’s survey, of whom 82% have worked in PSM, ORM or asset integrity for more than 5 years. A little over a third (36%) of respondents said they work in the Oil & Gas industry, 19% in the petrochemicals industry and 17% in manufacturing. More than 30% of participants work for companies with more than 10,000 employees and more than 25 plants and industrial facilities. Additionally, 44% said their work is focused in the Americas while 24% said Asia-Pacific, and 32% said Europe, Middle East & Africa.
Sphera creates a safer, more sustainable and productive world. Our innovative cloud-based risk management platform connects an unprecedented amount of information that leads to deeper insights across an enterprise. We operationalize, scale and optimize Integrated Risk Management strategies to help customers identify, manage, and mitigate risk in the areas of Environment, Health, Safety & Sustainability (EHS&S), Operational Risk Management and Product Stewardship.