Peachtree 2015 Annual Report Download - page 43

Principal Risk Risk Background Management and Mitigation
4. Competitive Positioning and Product Development
Sage is unable to clearly
identify its approach to
the market, and support
it with strategies that
drive competitive
advantage, including
product development
Primary strategic alignment:
Winning in the Market
Capacity for Growth
The competitive environment in which Sage operates
has seen significant developments in recent years
with the emergence of new players and a shi to
delivering functionality via the cloud. These new
players include venture capital funded organisations
whose primary goal is to aain market share
irrespective of profit, and a number of US listed
companies with similar goals. Cloud products and
digital sales and marketing strategies (zero touch
sales) are reducing barriers to entry.
Sage must be able to translate market intelligence
into appropriate strategies that target aractive
market segments with relevant products.
Whilst Sage transitions towards global products,
a number of which have been launched, in the short-
to mid-term there remains the need to manage and
evolve the local growth products in tandem with its
longer-term aspirations.
This risk was identified in 2015.
– A Global Marketing team has been established to oversee
competitive positioning and product development
– Product lifecycle classifications have been created, and all
products have been assigned a classification of ‘Heritage’
or ‘Growth’, to define whether research and development
resources may be expended on them
– Governance has been established over the creation of
global products, to ensure effective prioritisation of resources
– Accountability for the maintenance of documented strengths
and weaknesses has been defined, and for global products
this resides with the Global Marketing Operations team
In progress:
– All ‘Growth’ products must have their strengths and weaknesses
against competition documented, and the priority areas for
development identified
– Defined authorisation channels to control all research and
development expenditure, and to ensure these resources are most
effectively targeted
5. Sage Brand
Sage does not deliver clear
and consistent branding to
the market
Primary strategic alignment:
One Sage
Work continues towards building the global
Sage brand following several years of acquisitions
around the world. The Sage brand is currently
well recognised and trusted by customers in
many of its core markets, however, on a global scale
inconsistency exists in brand awareness across
certain territories.
A clear and consistent brand assists customers
in identification of the values Sage stands for, and
provides uniformity of message to the market. The
importance of such messaging is increasing with
the adoption of global products.
Activity has continued during 2015 to both strengthen
the brand and drive greater consistency in messaging.
This risk is an evolution from 2014.
– All countries must comply with Sage’s Brand Governance and
Brand Guidelines, which have been designed to execute the Sage
Masterbrand Strategy. Timeframes for compliance of all products
are defined, and any exceptions must be approved through the
Global Brand team
– Ongoing review of customer experience is performed
(Net Promoter Scores), and output reviewed across countries
and products to identify variance
– Where no specific brand guidance has been provided by
the Global Brand team, a defined approval route is in place
through the team, and approval must be obtained in advance
of publication
In progress:
– All branded assets must be uploaded to the Brand Library,
and any exceptions from brand guidelines reported to the
Chief Marketing Officer and Audit and Risk Commiee
6. Strategic Partnerships
Sage fails to identify, build
and maintain strategic
relationships
Primary strategic alignment:
Revolutionise Business
In the federated model, Sage countries operated
in a semi-autonomous manner, with limited global
direction, or co-ordination, and relied on internal
resource to go to market.
However, the market and Sage’s competitors have
become ever more agile, and specific resources
harder to aract.
As such, there are an increasing number of instances
where developing strategic partnerships may be of
benefit to Sage. Those instances where the use of
strategic partners is permied, and the governance
around such engagement, needs to be controlled as
well as the on-going management of any eco-system.
This risk is an evolution from 2014.
– A Partner Management team has been established to
oversee the selection and management of Strategic Partners
– Definitions are in place to ensure clarity over what constitutes
a Strategic Partner
– All contracts must comply with the Material Contracts policy, and
be approved through legal
– Inclusion of defined legal provisions is required. Any variance from
such provisions must be recorded as part of the formal contract
approval process
– All Strategic Partners are assigned an individual within the Partner
Management team who is responsible for actively managing the
relationship
In progress:
– In line with the business model transition and revised working
practices, a Strategic Partner Management policy is planned
during 2016 to enhance the consistency of selection and
on-boarding of all our Strategic Partners
The Sage Group plc | Annual Report & Accounts 2015 41
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