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An enterprise risk management knowledge-based decision support system for construction firms
journal contributionposted on 06.12.2017, 00:00 by Xianbo Zhao, B-G Hwang, SP Low
Purpose– The purpose of this paper is to develop a knowledge-based decision support system for enterprise risk management (KBDSS-ERM) for Chinese construction firms (CCFs) to facilitate their ERM implementation. The specific objectives of the KBDSS-ERM are: first, assess the ERM maturity in a CCF; second, visualize the ERM maturity assessment results; third, provide action plans for improving the ERM implementation along the maturity continuum; and finally, generate a printable ERM maturity assessment report.Design/methodology/approach– Microsoft Visual Studio 2010 was used to develop the KBDSS-ERM. Based on literature review and structured interviews, 191 action plans for improving ERM implementation were identified and included in the knowledge base. A fuzzy ERM maturity model, including 16 maturity criteria and 66 best practices, was embedded into the KBDSS-ERM. A total of ten experts from ten different CCFs, who were not involved in the survey or the development of the action plans, were invited to validate the KBDSS-ERM.Findings– The validation results indicated that the results of the KBDSS-ERM were consistent with the expert judgments, and that the KBDSS-ERM had the accuracy ranging from 92.9 to 83.7 percent in assessing the maturity criteria and the overall ERM maturity of CCFs. In addition, the experts recognized the KBDSS-ERM as being a robust, convenient and useful tool for ERM implementation in CCFs.Research limitations/implications– First, the maturity criteria and ERM best practices that were identified in this study may not be exhaustive even though close attention was paid in the research methodology adopted to circumvent this risk. Additionally, as the applicability of the best practices and the importance of the maturity criteria were checked in the context of CCFs, one should be cautious when the KBDSS-ERM is being applied in other construction firms outside of the CCFs domain.Practical implications– Using the KBDSS-ERM, the management can clearly understand its ERM implementation as well as the strengths and weaknesses, and obtain the action plans recommended by the KBDSS-ERM. Thus, with the information from the KBDSS-ERM, the management would make better decisions relating to ERM. In addition, while using the KBDSS-ERM, the staffs need to read the ERM best practices, which allows them to learn the ERM fundamentals and produce practical or innovative ideas relating to ERM. Thus, the KBDSS-ERM would contribute to the organizational learning of companies.Originality/value– The primary contribution is the provision of 191 specific action plans that could be followed to enhance ERM practice. These action plans are arguably the first to be presented for the construction industry and therefore add to existing knowledge of ERM, now embedded in the KBDSS. In addition, the KBDSS-ERM is also the first computerized ERM tool developed specifically for construction firms. Although the KBDSS-ERM is primarily designed for CCFs, the implications of this study are not limited to CCFs because researchers and practitioners could adopt the research method of this study to develop KBDSSs for other construction firms.