Sopra Steria - 2019 Universal registration document
2 RISK FACTORS AND INTERNAL CONTROL Risk factors
Detailed presentation of risk factors 1.3.
RISKS RELATED TO STRATEGY AND MARKET DEVELOPMENTS
ADAPTATION TO MARKET DEVELOPMENTS AND DIGITAL TRANSFORMATION ❙
The business activities of the Group’s clients are changing and are being transformed as a result of digitisation and the emergence of new rivals, new businesses and new organisations. Clients are seeking to become more agile, and to do so they are reinventing their business models, organisational structures and resources. These developments concern all of the Group’s businesses. If the Group is unable to understand, satisfy and anticipate clients’ needs, an unsuitable market positioning and/or difficulties in implementing its strategy could potentially impact its financial performance. Furthermore, although some of the Group’s activities involve multi-year contracts (maintenance activities, facilities management, outsourcing of business processes), its consulting and integration activities as well as its licence sales are characterised by short cycles, making it difficult to prepare forecasts for levels of activity, order intake and future revenues.
The management of this risk is integrated into the development of the Group’s strategy as well as its effective implementation. Each year, the Group conducts a comprehensive strategy review and update, under the supervision of the Strategy Department, the Chairman and the Chief Executive Officer, with the assistance of the Group’s Executive Committee, covering all business lines and markets in which it operates. This exercise, which draws both on external studies and internal feedback from stakeholders in contact with clients, leads the Group to take a certain number of decisions, in particular involving the transformations to be undertaken or the acquisitions strategy. These decisions are applied, on the one hand, by the central functions, responsible in particular for investing on behalf of the entire Group in support of the planned transformations and, on the other hand, by all Group entities (countries and subsidiaries) as part of the updating of their three-year strategic plans. The Group-wide implementation of the transformations initiated by the central functions as well as the progress made on each entity’s strategic plan are monitored on a regular basis by the Chairman, the Chief Executive Officer and the Strategy Department, in liaison with the Group’s Executive Committee. By way of example, the following were initiated and closely monitored in 2019: the transformation of Consulting (in line with the launch in France of the new “Sopra Steria Next” brand, designed to spearhead the Group’s digital transformation activities on behalf of its clients); the transformation of the Group’s Services and Solutions to better harness the power of digital and cloud technologies, and deliver the end-to-end offerings needed by clients; the upgrading of management and employee skills; the transformation of the production model to support digital offerings and sustain the Group’s competitive advantage; the reinforcement of the technology and sales partnership with Axway; and the review of the acquisitions strategy. In order to track technology advances in a proactive manner, an organisation anchored by the Chief Technology Officer (CTO), together with Vertical Leaders and experts, has been put in place within the Group and in relation to each of its vertical markets. The goal is to plan ahead as effectively as possible for developments driven by new technologies as well as their use in connection with transformations affecting our clients’ businesses.
SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019
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