Running the risk

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Prorim, a new risk management e-learning programme, has been designed to assist small to medium-sized enterprises but will it be a runaway success, asks Rachel Gordon

Some of the smartest risk managers in the business have put together Prorim, a new e-learning programme designed to reduce the risk of loss and failure among small to medium-sized enterprises. There are ambitious plans and a potentially massive audience of 23 million to reach but will the target audience get the opportunity to hear about it?

Prorim, which is short for Professional in Risk Management, is an intelligent system but its success will partly depend on whether millions of firms across Europe and beyond find out about its existence. Despite being formally launched at a conference in Brussels last month, details are not easy to find. Type in the website address - www.prorim.org - and what appears is the website of the Federation of European Risk Management Associations, the umbrella organisation that oversaw Prorim's development.

However, from this point on, it is difficult to find out more. Click on the area where Prorim is listed under Ferma's 'priorities and projects' and access is restricted. There is a video detailing the launch of Prorim but since some PCs may not have sound, this is of limited use. So, for the average punter, finding out how to obtain the e-learning programme is not straightforward.

Putting these issues aside, there is evidently plenty of need for the Prorim message to be heard. A recent study by Professor Jean-Noel Ezingeard from Henley Management College revealed that approximately half of SMEs in the UK do not have suitable crisis planning in place.

The research, conducted with insurer Axa, found that more than one-third of senior managers have relied on luck when making an important business decision. In addition, some 76% of SMEs have not reviewed business approaches since last July's terrorist attacks in London, and this is endemic of a much wider failing of small businesses to make adequate provision against business interruptions.

Risk control

According to Professor Ezingeard: "Many SMEs tend to focus on the day-to-day aspects of the business but never look at risk control. Something like Buncefield, where businesses three miles away were affected, should bring it into focus. Every business owner should be looking at the effect an incident could have."

Business continuity planning is a key part of Prorim but one of the biggest challenges and the first hurdle for its backers to overcome is awareness. Several major composites were contacted to gauge their opinions on the new risk management programme but their risk management staff had not heard of Prorim and so were unable to comment.

"I've never heard of Prorim," adds Stephen Alambritis, spokesman for the Federation of Small Businesses. "However, we would welcome any project that could make insurance more affordable. We have concerns about the costs of liability cover, and terrorism is also posing an increased threat."

So, it would seem there is some work to be done by Prorim's marketing team. After all, there is a range of other risk management toolkits available and companies can find out information from sources including books, other online programmes and consultancy services. In addition, the number of brokers offering risk assessments has increased in recent years.

So, what exactly is Prorim and what makes it different? One of the key differences about Prorim is that it has been created as a result of pan-European collaboration. It is the work of the national risk management associations in France (AMRAE), Germany (DVS/Bfv), Italy (ANRA) and the UK (the Association of Insurance and Risk Managers); is available in all four languages; and was produced with the assistance of the University of Verona and the UK's Institute of Risk Management. Funding came in part from the European Union Leonardo da Vinci fund for initiatives in the SME sector.

Ferma's vice-president, Paul Taylor, who chaired the Prorim working group, said at its launch: "SMEs are no different from other organisations but their size makes them particularly vulnerable to the impact of things going wrong, and they rarely have the resources to support a dedicated risk management professional. They have to understand and manage their risks to help achieve their business objectives. Without this management, risks will manifest themselves, which will prevent businesses from achieving their objectives."

He added that the project demonstrated risk managers and their associations in Europe could work together effectively. "It has been an enormous challenge, with many of those involved giving a lot of their own time. However, the result will speak for itself - I am confident that we have a programme that is deliverable in different cultures and languages and that will provide a consistent approach to risk management."

One of the key figures involved in Prorim's development was David Gamble, Airmic's executive director. "I spoke to people across Europe and there was a lot of belief in the project. The European Union also supported the concept and provided us with a grant of £208,000. This was boosted to around £600,000 by supporting organisations."

The EU set the Prorim team a two-year deadline to complete the project. Ensuring everyone was working together was not easy and there were also language issues. "It was initially envisaged that someone from each of the countries involved would write a module. In the end, however, it made more sense if one person wrote them so that there was continuity," Mr Gamble explains.

He volunteered himself for the task and certainly has the credentials, having a thorough understanding of the SME market and being a former languages teacher. On top of his day job, he managed to produce approximately 45,000 words of text contained in the initial launch product.

Risky business

Prorim was turned into its current format by online publishers Must Have Knowledge. Director Raymond Breen comments: "There is a lot of text but we knew it had to be in a simple format. There are plenty of interactive exercises that require users to think about the risks in their business." It is recommended that around 10 minutes a day are spent using Prorim. "Of course, we hope people will spend longer but simply doing some study during a coffee break will make a difference," he adds. The cost for the initial licence is £260 and so the price should also not be prohibitive for most firms.

Mr Gamble adds that Prorim has been thoroughly tested with user groups. "Feedback has shown it's at the right level. We feel it has unlimited potential that goes way beyond Europe; for example, there is a lot of interest from India and South Africa."

He says that one of Prorim's aims is for businesses to feel empowered from using the programme, so they feel that they can take on higher retentions - which could mean cheaper insurance.

The e-learning programme already has one strong supporter in Norman Sinclair, senior risk consultant with Marsh. "This is a great idea and, from what I've seen, it's practical," he says. "It may appear to be fairly low level but scratch beneath the surface and you'll find there is a lot to it. We need more education in this area and it's excellent that this has been developed through sharing knowledge and best practice. I hope it succeeds."

Palisade Europe, which provides risk analysis software and training, is also among its early admirers. Managing director Craig Ferry comments: "We applaud the launch of Prorim, as the understanding of risk is inadequate across most industries, even in insurance. At the same time, business risks today are more complex and you need to consider the multiple dimensions of risks, including operational, regulatory, and legal and implementation.

"There needs to be greater knowledge of basic risk principles to go along with such analytical tools to really get a handle on risk. Organisations, especially in insurance, are increasingly recognising this need and are investing in risk training programmes."

Pauline Pembry, employment services manager for First Assist - which provides a range of services linked to health and employee well-being - says she has not been able to find access to Prorim, although she has heard of its launch. "It's good news, as is anything that raises standards."

She adds: "Small employers hate paperwork and anything prescriptive. They also don't have time to analyse things in detail. In my view, they need quick updates on key issues; for example, if there is a piece of legislation they need to be aware of. The one thing that would probably guarantee the programme would work is if SMEs could know they would receive a reduction in premiums if they implement the guidance."

International audience

Ms Pembry also says that phone support is essential for programmes such as Prorim. However, this may not be easy to provide, given that Prorim is aimed at an international audience. First Assist's Business Care, which is also aimed at SMEs, is an online programme offering guidance on legal, health and safety, employment and tax issues. "Health and safety is particularly pertinent to managing risk and we also have a UK-based call centre where further advice can be given," she says.

More brokers are also offering risk assessments for their clients and some have developed their own toolkits. For example, Suffolk-based broker Alliance Corporate Risk Management - which brands itself on "not just offering insurance policies" - has recently launched www.alliancerisk.co.uk, a website that provides health and safety news, advice and support for a £300 a year subscription.

John McLaren-Stewart, chief executive officer at Alliance Risk Corporate Risk Management, comments: "Smaller companies are often neglected. This service helps them grow to a size where they can take advantage of our full corporate risk management and insurance support."

Prorim itself is now up and running and time will tell if its plays a central role in helping SMEs manage their risks better. Mr Taylor, however, is bullish: "The result will speak for itself - I am confident that we have a programme that is deliverable in different cultures and languages that will provide a consistent approach to risk management."

PRORIM

The online part of Prorim is comprised of five modules, which are designed to show small to medium-sized enterprises how to manage the risks inherent in these areas. It is aimed at business people with little or no experience in systematic risk management and incorporates one day of face-to-face training followed by an online programme.

It aims to give SMEs the understanding and the tools to identify and manage their business risks. The Federation of European Risk Management Associations claims it is user friendly and can be undertaken in small, manageable chunks, which gives managers a tool that they can use in their day-to-day work. The modules are as follows:

- Strategy

- Sales and marketing

- Finance

- Human resources

- Business continuity.

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