Experian 2012 Annual Report Download - page 28

26 Experian Annual Report 2012 Business overview
Other risks
Increasing risk _ No change
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Risk and impact Mitigation Change
From 2011
Commentary
Product/service or technology obsolescence
Without the timely introduction of new or enhanced
products and services our offerings will become
technologically or commercially obsolete over
time. In addition, without continued investment in
our technology infrastructure, we may not be able
to support changes in the way our businesses and
customers use and purchase information. In either
case, there can be no assurance that there would not
be a material adverse effect on our business, results of
operations and/or financial condition.
Product innovation is a key driver of growth for
Experian in all our markets and we have continued
to invest strongly in new data sources and new
analytical products, together with the platforms
that support their worldwide delivery. Over 10%
of our revenues come from products developed
during just the past five years. In addition, 20% of
our global costs are in information technology and
data. Detailed competitive and market analysis
are performed which provide the foundation
of a rigorous product and services investment
identification and selection process.
_Related global strategy:
•Optimise capital efficiency
•Drive profitable growth
Further information:
•Business overview section – examples of how
businesses are delivering innovative solutions
•Group strategy and objectives – examples of
product innovation
•Business overview section – discussion of how
we extend our global lead through product
innovation
Interruptions in business processes or systems
Our ability to provide reliable services largely depends
on the efficient and uninterrupted operation of our
computer network systems, data and call centres,
as well as maintaining sufficient staffing levels.
System or network interruptions, or the significant
reduction in key staff or management resulting from
a pandemic outbreak, could delay and disrupt our
ability to develop, deliver or maintain our products and
services, causing harm to our business and reputation
and resulting in loss of customers or revenue.
We have strict standards, procedures and training
schemes for physical security. Comprehensive
business continuity plans and incident
management programmes are maintained to
minimise business and operational disruptions
including pandemic incidents. We maintain
full duplication of all information contained in
databases and run back-up data centres. Support
arrangements, strict standards, procedures and
training schemes for business continuity have
been established with third party vendors. We also
monitor potential pandemic threats and adjust
action plans.
_Continuity of services is a core focus and built into
the development of new and existing products.
While we experienced limited disruptions during the
fiscal year, events such as the Japan earthquake/
tsunami provided real time validation of established
plans and processes. We continue to execute
periodic exercises to ensure that documented
procedures are accurate and suitable for each
specific environment.
Related global strategy:
•Optimise capital efficiency
•Drive profitable growth
Dependence on recruitment and retention of highly skilled personnel
Our ability to meet the demands of the market and
compete effectively with other IT suppliers is, to a
large extent, dependent on the skills, experience
and performance of our personnel. Demand is high
for individuals with appropriate knowledge and
experience in the IT and business services market.
The inability to attract, motivate or retain key talent
could have a serious consequence on our ability to
service client commitments and grow our business.
Effective recruitment programmes are ongoing
across all business areas, as well as personal
and career development initiatives. Talent
identification and development programmes have
been implemented and are reviewed annually.
Compensation and benefits programmes are
competitive and also regularly reviewed.
_88% of our employees participated in the 2011 global
people survey which is considered to be a ‘high
performing’ response level. The results of the survey
show consistent overall improvement in the degree
of employee engagement, as well as to assess
general levels of satisfaction and involvement at
work. Separately, approximately 60% of our senior
leadership roles have successors ready to cover
these roles in the short, medium and long-term.
Related global strategy:
•Focus on data and analytics
•Optimise capital efficiency
Further information:
•‘Our people, our strength’ section
•Key performance indicators
•Corporate responsibility section –
Be a good employer to all
Risk and impact Mitigation Change
From 2011
Commentary
Exposure to material adverse litigation
We are regularly involved in a number of pending and
threatened litigation claims in the United States and
Latin America, including a number of class actions in
the United States. As is inherent in all legal proceedings,
litigation outcomes cannot be predicted with certainty
and there is a risk of outcomes unfavourable to us.
We vigorously defend all pending and threatened
litigation claims. We employ internal counsel
and engage external counsel to assist in the
effective management and disposal of litigation
proceedings. Insurance coverage is maintained
against litigation risks where such coverage is
feasible and appropriate.
_The exposure to material adverse litigation in the US
remains generally consistent with prior years.
Related global strategy:
•Focus on data and analytics
•Drive profitable growth
Further information:
•Corporate governance section associated with
the identification and monitoring of litigation.
•Financial statement note 45 describing
contingencies for pending and threatened
litigation claims