Indonesia Conference Directory

Introduction and Research Problem PT XYZ needs to design and implement risk management. One of the urgency for designing and implementing risk management system is because the soul of the parent companys business is in the construction field and wants to diversify its business into new business fields as energy investments that entrusted to PT XYZ. New business fields in the energy sector will certainly be faced with the high risks. Coupled with minimal experience makes the risk faced will be even higher. The need for the design and implementation of risk management at PT XYZ is also indicated by the occurrence of cost overrun in current projects. In carrying out each project, PT XYZ must pay a pre-development cost whose value is quite high. However, after PT XYZ spent the costs, the planned project may not be able to be proceed to the next stages. Therefore, PT XYZ has potential to pay sunk costs. Design and implementation of the risk management system is expected to make the usage of project pre-development costs will be more efficient. Methods The design of risk management systems in this study uses the ISO 31000: 2018 approach. To find out the current implementation of risk management at PT XYZ, an assessment of the risk maturity level that refers to the Chapman model (2011) was conducted. Furthermore, the risk management system then implemented by PT XYZ which includes several stages. The external context determination stage uses the PESTEL analysis and stakeholder analysis while the internal context determination stage uses the 7s McKinsey analysis. The Risk Breakdown Structure method through Work Breakdown Structure is used to identify the risks. In addition, root cause analysis be used to compose risk treatment plans. Results and findings This study-s result are risk management system design such as: risk management policy, proposed organizational structure, SOP and risk management processes templates that include communication and consultancy; determination of the scope, context and criteria; risk assessment; risk evaluation; risk treatment; monitoring and review; recording and reporting. The risk maturity level assessment shows that currently PT XYZ is at the basic level. In implementation of risk management design, the scope of risk management process is limited to PT XYZ and has not been integrated with its subsidiaries. From the process, 128 risks in PT XYZ have been identified, consisting of 59.4% strategic risks; 32.0% financial risk; 4.7% HR risk; 1.6% reputation risk; 1.6% legal risk; and 0.8% operational risk. In addition, the result of the risk evaluation shows that PT XYZ has 8% extreme risk. Conclusions, implications and significance The risk management system has been designed at PT XYZ. The risk maturity level of PT XYZ shows that the risk management system is designed as an effort to improve the business. Beside, risk treatment plans are composed to reduce the level of likelihood and / or level of impact of ex