REG - Sage Group PLC - Final Results <Origin Href="QuoteRef">SGE.L</Origin> - Part 4
02/12/2015 07:11
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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 BrandSage does not deliver clear and consistent branding to the market Primary strategic alignment: 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
One Sage 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 variances- 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 publicationIn 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 Committee
#6. Strategic PartnershipsSage fails to identify, build and maintain strategic relationships Primary strategic alignment: 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 attract.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 permitted, and the governance around such engagement, needs to be controlled as well as the ongoing 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
Revolutionise Business 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
#7. 3rd Party RelianceSage fails to adequately understand and effectively manage the 3rd party environment that supports its business Primary strategic alignment: Sage offers a set of products and services to customers, for which it will be held accountable should problems occur. Many key parts of Sage's service offerings to its customers are now delivered using third parties, and while activities may be outsourced, the risks associated with their use cannot be. To allow risks to be managed within Sage's appetite, this third party estate must be understood and effectively managed. This risk was identified in 2015. As part of the move to 'One Sage' and the new global operating model, organisational and structural changes have been made during 2015, designed to enhance Sage's global approach to third party management - A global procurement function has been established to ensure key controls are applied in the selection and on-boarding of third parties- The business is
Revolutionise Business responsible for defining its needs and requirements- The global procurement function supports the business with the selection of third parties and negotiation of
contracts- Legal resources are used in contract negotiation- Management review and control is applied through the Delegation of Authority process, and
appropriate approval is required before any expenditure can be authorised In progress: - As part of the transition to the global operating model, and an Excellence
in Governance initiative to support this transition, a Third Party Lifecycle Governance Framework will be established during 2016
#8. Supporting Control EnvironmentSage's underlying control environment (business processes and technology infrastructure) do not support the efficient operation of the business and do not support the control framework Sage has historically grown through a process of acquisition. Each acquisition has arrived with its own control environment (systems and processes, including technology infrastructure).Sage is moving to a new global operating model, and to allow this the control environment (systems, processes, technology infrastructure and applications) must support the efficient operation of the business - through the timely provision of accurate and appropriate information. This risk is an evolution from 2014. - Business requirements are defined across the business- New best in class systems have been installed, including Salesforce CRM and Sage's X3 General Ledger-
Salesforce CRM has been installed for use within the new Customer Business Centres as the primary CRM system to underpin their operation and expansion. All new
customers for Customer Business Centres supported products are being entered directly into these systemsIn progress: - X3 General Ledger has been installed both in
Customer Business Centres and separately for wider General Ledger activities. In scope systems have been identified, and a planned migration by Finance Operations will
occur- Any deviation from the migration plan must be approved through the Finance Implementation Steering Committee- As part of business model transition
activities and the establishment of revised ways of working, an Excellence in Governance initiative is being undertaken to ensure consistency and enhance effectiveness-
Expansion in scope of Customer Business Centre supported products is planned as part of a gradual move to global products
#9. Information Management and Protection (including cyber)Sage fails to adequately understand, manage and protect data During the period of acquisition many established processes, whilst appropriate to smaller businesses, did not develop in line with Sage's growth. This risk is an evolution from 2014. During 2015, organisational and structural changes have been made to manage the risk and to transition to the new ways of working. - Creation of a global 'OneIT' function reporting to the global Chief Information Officer, to support the operation of 'One Sage' through common supporting IT
infrastructure, practices and systems- A network of Chief Information Security Officers oversees compliance with the IT Controls Framework, which defines the key
controls which are required- Maintenance of formal certification schemes, such as PCI, across specific parts of the business, with internal and external validation
of compliance- Ongoing assurance activities are performed across the estate by Internal Audit against the IT Controls Framework. Results are tracked and reported to
the Audit and Risk Committee In progress: - Global incident management procedures including rating of incidents and escalation, as required- Excellence in
Governance initiative being undertaken across revised ways of working and policies to enhance effectiveness
#10. Regulatory and Legal FrameworkSage fails to understand and effectively operate within the legal and regulatory framework applying to its services Sage operates in an increasingly complex external environment, while at the same time continuing to evolve its service offerings to the market. Many of Sage's activities and services are subject to legal and regulatory influences, which continue to develop in parallel. It is therefore essential to monitor the evolving legal and regulatory environment, understand in a timely manner how this applies to the business, and take appropriate steps to ensure compliance. This risk is an evolution from 2014. - All legal resources across Sage report directly to the global Legal Director- The legal function uses internal and external resources to monitor planned and
realised changes in legislation- All product contracts are reviewed and approved through the global legal function- A suite of policies are in place to
support key legislation, including Data Protection and anti-Bribery- A Code of Ethics policy is in place across the business which provides clarity over how
colleagues are expected to behave.- On-line training is provided to support it, and to record levels of understanding- A Whistleblowing facility is in
operation, to allow colleagues to raise issues without fear of recrimination, and to provide early oversight of issues In progress: - Development and communication
of the 'Sage Way' of working, and on-going drive towards a 100% compliance culture
Statement of Directors' Responsibilities
Responsibility statement of the Directors on the Annual Report & Accounts
The Annual Report & Accounts for the year ended 30 September 2015 includes the following responsibility statement.
Each of the Directors confirms that, to the best of their knowledge:
- the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true
and fair view of the assets, liabilities, financial position and profit of the Group; and
- the Directors' report includes a fair review of the development and performance of the business and the position of
the Group, together with a description of the principal risks and uncertainties that it faces.
On behalf of the Board
S Hare
Chief Financial Officer
2 December 2015
This information is provided by RNS
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