Peachtree 2015 Annual Report Download - page 42

Principal Risk Risk Background Management and Mitigation
2. Licensing Model Transition
Sage does not successfully
move to a target
subscription licensing
model, and adapt its
customer approach to
reflect the change to
this model
Primary strategic alignment:
Customers for Life
Sage wishes to continue to shi its licensing
model towards subscription, where customers pay
a monthly charge to use a licence, and in doing so are
entitled to upgrade to the most recent release.
Subscription licensing is perceived as beneficial
within the soware industry for a variety of
reasons, including increased customer contact
and predictability of cash flow. Any transition
process must, however, be controlled in order
to manage potential impacts, including short
term revenue figures.
This risk is an evolution from 2014. Through 2015,
a dual approach has been followed to ensure
achievement of revenue figures, while moving
towards subscription. In parallel to these activities,
the first of a number of Customer Business Centres
have been opened for global products, which
co-locate teams (digital marketing, sales, service
operations) enabling them to operate collaboratively
and serve customers quickly and efficiently.
– New products are being offered on a subscription only basis
– An approvedlicensing model transition strategy is in place,
with defined targets and timescales
– A series of approved targets have been defined, which span
multiple years and support successful delivery of our Strategy
– Ongoing monitoring and review of the approvedtargetsis taking
place at country, regional and global levels in order to proactively
manage the licence transition, and revenue figures
In progress:
– Creation of further Customer Business Centres, with staged
adoption of global products, to beer manage on-going
customer relationships and the sales cycle
3. Market Intelligence
Sage does not understand
or anticipate changes in the
external environment
(including areas such as
customer needs, emerging
market trends, competitor
strategies and regulatory /
legal requirements)
Primary strategic alignment:
Customers for Life
Winning in the Market
Sage has focused resources and management
aention on successfully delivering revenue and
margin growth while at the same time maintaining
a broad product range. This has been underpinned
by local market intelligence.
In order to develop a consolidated understanding
of its market and customer needs, Sage is developing
a global market intelligence capability.
The risk was identified in 2015. The initial focus
has been to develop appropriate structures which
will enable competitive positioning and product
development, and 2016 will see the introduction
of further operational practices to support this.
With a growing emphasis on global products
within Sage, this activity will become increasingly
relevant in the successful development of Sage’s
customer solutions.
– A Marketing Operations group has been established
across the organisation, which has overall responsibility
for Market Intelligence
– Annual completion of a global market intelligence survey,
to identify market opportunities
– Annual completion of a brand health survey to understand
customer perception of the Sage brand and its products
In progress:
– Prioritisation of resources and effort on products with a lifecycle
status of ‘Growth’
– Ongoing development of standard templates for use by
market intelligence managers to allow information capture to
be enhanced across countries, and reported on a periodic basis
– Definition of a feedback loop to allow continual refinement of
standard templates, ensuring they remain effective, and capture
relevant information
Principal risks continued
The Sage Group plc | Annual Report & Accounts 2015
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