Five Globalization Risks and How to Manage Them

By Melissa Centurio Lopes on May 06, 2013

Globalization may offer enterprises exciting new growth
opportunities in emerging markets, but it can also introduce a
complex array of operational risks. The challenge is that without
the right infrastructure in place to confront these risks,
international projects can immobilize an organization and lead to
the biggest consequence of allputting the company out of
business.
Investing in the Unknown? is a new report produced by The
EPPM Board that explores five key challenges facing global
project delivery. Produced for enterprise project portfolio
management (EPPM) professionals, the report examines the
challenges of operating across borders, and details the role of
EPPM solutions in maintaining effective visibility and control.
A shifting risk profile. The increased scale of globalized
operations is matched by the increased level of risk, ranging
from fluctuations in interest and exchange rates to supply chain
piracy. As these risks become more strategic, they frequently
involve greater levels of uncertainty that can impact capital
investments. Organizations therefore need access to a more
comprehensive risk framework, and the ability to analyze
different scenarios and model specific risks and costing options.

Regulatory obstacles. Fast-changing regulations and local

policies can have a dramatic impact on the profitability of crossborder investments, heightening uncertainty in rapid-growth
markets. By adopting a global platform for managing the project
portfolio, greater visibility can be gained into the procedures for
overcoming regional barriersand for developing suitable
contingency plans.
Cultural differences. Managing workforces when operations
are separated by thousands of miles, international time zones,
and cultural and religious differences can be an exacting
challenge. To cope, the central organization must be able to
refine portfolio management and create an infrastructure that
maintains the diversity of international teams while also
empowering local delivery.
Resource constraints. Increased competition for local talent
often results in skills shortages in key functions. This creates
increased demand for effective planning processes allied to
dynamic resource management capabilities. While the tools exist
to support these activities, the trick is to review intelligence
from a consolidated global perspective. EPPM solutions provide
a framework for adopting this perspective and for balancing the
risks of individual projects across the portfolio.
Problem flexibility. The growing interdependence of
international value chains makes the consequences of major
systemic disruptions difficult to manage. Increased visibility into
value chain performance, and processes for creating a

collaborative, two-way flow of information are the vital

ingredients for retaining flexibility and responsiveness. In
addition, executives must be able to select the type and
frequency of data they review and zoom in on any critical
obstacles.