BT 2015 Annual Report Download - page 44

42 BT Group plc
Annual Report 2015
Risk description Impact Link to strategy
Security and resilience
The resilience of our IT systems, networks and associated
infrastructure, including our core data centres and exchanges,
is essential to our short and long-term commercial success.
e face a variet of haards that could cause sinificant
interruptions to the deliver of our services. hese include
coponent failure phsical attac theft of copper cable and
euipent fire eplosion ood power failure overheatin
or etree cold probles encountered durin uprades and
aor chanes and the failure of e suppliers.  cber securit
incident or loical attac could also trier service interruption.
e also have a responsibilit to an illions of custoers
both business and consuer to ensure their electronic
inforation reains confidential accurate secure and available.
he sae holds true for our own data inforation and
intellectual propert.
 breach of our securit or coproise of data or resilience
aectin our operations or those of our custoers could
lead to an etended interruption to our services or even
aect national infrastructure. he ipact of such a failure
could include iediate financial losses due to fraud and
theft terination of contracts iediate loss of revenue
where orders and invoices cannot be processed contractual
penalties lost productivit and unplanned costs of restoration
and iproveent prosecution and fines.
dditionall reputational daae a arise underinin
aret confidence and eopardisin future revenues.
Ultiatel the welfare of individuals iht be put at ris
where services cannot be provided or personal data is
isappropriated.
 eliver superior
custoer service
Major contracts
We have a number of complex and high-value national and
multinational customer contracts.
he revenue arisin fro and the profitabilit of these
contracts are subect to a nuber of factors includin variation
in cost achieveent of cost reductions anticipated in the
contract pricin both in ters of scale and tie delas in the
deliver or achieveent of areed ilestones owin to factors
either within or outside of our control chanes in custoers
reuireents their budets strateies or businesses and the
perforance of our suppliers. n of these factors could ae
acontract less profitable or even loss-ain.
he deree of ris enerall varies with the scope and life of
the contract and is tpicall hiher in the earl staes of the
contract. oe custoer contracts reuire investent in the
earl staes which is epected to be recovered over the life of
the contract.
aor contracts often involve the ipleentation of new
sstes and counications networs transforation of
leac networs and the developent of new technoloies.
he recoverabilit of these upfront costs a be ipacted b
delas or failure to eet ilestones. ubstantial perforance
ris eists in soe of these hihl cople contracts.
ailure to anae and eet our coitents under these
contracts as well as chanes in custoers reuireents
their budets strateies or businesses a lead to a
reduction in our epected future revenue profitabilit and
cash eneration. Unepectedl hih costs associated with the
deliver of particular transforational contracts could also
neativel ipact profitabilit.
arnins a be reduced or contracts a even becoe
loss-ain throuh loss of revenue chanes to custoers
businesses business failure or contract terination.
ailure to replace the revenue and earnins lost fro these
custoers could lead to an overall reduction in roup revenue
profitabilit and cash ow.
 eliver superior
custoer service
 Transform our costs
 nvest for rowth
rend indicates anaeents perception of how the
pre-itiation ris has oved ear on ear
re-itiation ris is
increasinworsenin
re-itiation ris
is at a siilar level
re-itiation ris is
lesseniniprovin
Our principal risks