Cybercom is exposed to several risks that could affect the Group’s results. Cybercom evaluates, identifies, and continually manages these risks. The risks deemed most significant to the company are categorised as operational, market, or financial risks.
Operational risks
Competition and price pressure
Cybercom offers business-critical solutions, mainly in telecom and selected technologies. Competition is tough in this market. High fluidity in this market means that the players, offerings, and pricing models constantly change. To balance the risks, Cybercom specialises and positions itself in the market to create its own solid customer base.
Major customers
Cybercom’s 10 largest customers account for 63% of its sales. Cybercom has long-term working relationships with its customers – many have been on the customer list for several years. As mentioned above, Cybercom specialises and positions itself in the market to always be the obvious choice for its customers. Cybercom also actively works on achieving a broad customer base from various industries and markets.
Frame agreements
Frame agreements (master contracts) have become more significant in recent years. Cybercom perceives that customers now select fewer suppliers and select them with care. Besides quality and sophisticated technical expertise, a robust financial position is crucial for ranking among the companies that customers choose as their frame agreement suppliers. Cybercom now has frame agreements with virtually all its major customers. To reduce risks of non-renewal of these agreements, the key is to deliver quality and results and maintain fruitful dialogue with customers.
Capacity utilisation
Cybercom sells services; most of its revenue is based on sold consulting hours. So reduced demand for consulting hours is a risk for Cybercom. Many possible reasons account for reduced demand, for example, economic
downturns and mismatches between skills and market demand. Through strategic recruitment and continual skills development of employed consultants, Cybercom aims to ensure it has the right consulting skills to meet market demand. As an international group, Cybercom also has the option of working abroad. This enables staff flexibility and gives the company an opportunity to counter a partial drop in demand.
Employees
Because Cybercom is a service company, it depends on the motivation and skills of its employees. Qualified consultants are a requirement for successfully implementing customer projects and satisfying customers. Employee attrition or loss of key talent could create a risk for the company, so Cybercom actively works to ensure employees’ job satisfaction. In addition, resources are earmarked for training and recruitment activities.
Market risks
Structural changes
Many of Cybercom’s customers comprise large international groups that in turn request few, yet large, international suppliers. Cybercom has risen to this challenge by actively working toward greater internationalisation, which has mainly been achieved via strategic acquisitions. Cybercom operates in China, Denmark, Estonia, Finland, India, Poland, Romania, Singapore, and Sweden. As a global company, Cybercom has greater opportunities for working in larger international projects or for assuming responsibility for an entire function at the customer site as a partner.
The economy
The current recession has a general impact on prevailing demand for IT services. Cybercom’s efforts to minimise the recession’s impact on the company include reviewing its cost structure and reducing dependency on individual customers and markets.
Financial risks
Cybercom’s financial risks rose due to the Plenware acquisition.
Cybercom has identified these financial risks, which could affect results:
- Liquidity and financing risk
- Market risk
- Interest rate risk
- Currency risk
- Credit risk