Principal Risks

Description

Changing customer requirements, industry and technological innovation contribute to the risk and challenges associated with developing complex software applications.

Mitigation

New product development and the enhancement of existing products both require continual appraisal of investment and returns.
Product development is planned, reported and reviewed frequently. Elecosoft works closely with key customers and channel partners while monitoring industry trends to ensure that new products and features align to the market needs and expectations.

Description

The health of domestic and global economies strongly influences the commercial construction business cycle. A downturn in the construction business cycle can adversely affect Elecosoft’s performance.

Mitigation

The market risk is mitigated through operational spread between countries with plans to expand geographical reach through reseller channels. Elecosoft’s position is strengthened by servicing the maintenance stages of the building lifecycle. Unfortunately it is not possible to predict with any degree of certainty the impact on our business, whether positive or negative, resulting from the current delay of the implementation of Brexit.

Description

The Group earns a proportion of its revenue in currencies other than Sterling. The two largest currencies in which it trades are Swedish Krona (SEK) and Euro (EUR). Changes in these exchange rates can expose Elecosoft to exchange gains and losses.

Mitigation

Our businesses predominantly trade in their own local currencies and have local operational and development staff which creates a natural hedge against currency movements. In addition, we will continue to review foreign exchange contracts to manage risk.

Description

Elecosoft’s success is built upon the development of sophisticated software which requires continual protection from competitive businesses who may seek to copy or otherwise replicate the software.

Mitigation

Elecosoft uses a variety of licensing technologies and defines the rights of customers in licence agreements. In addition, the Group seeks to ensure its intellectual property rights are protected by appropriate means and defends its rights where practicable.

Description

Elecosoft’s reputation depends upon its products and services and, in turn, these are built upon the innovation and dedication of its employees.

Mitigation

Elecosoft endeavours to ensure that employees are motivated in their work and there is regular feedback on their performance. There are pay reviews and a range of incentive schemes to reward achievement over different time periods.

Elecosoft attracts new talent by maintaining its focus on developing new and innovative applications.

Description

There is an increasing reliance on IT systems, local and cloud, to perform the daily operations of a business. Exposure to technology in general is rapidly increasing with cloud offerings and remote connections.

Mitigation

Good, effective technology risk management and close monitoring is essential to robustly handle potential IT security incidents and system failures, as well as ensuring customer information is protected from unauthorised access or disclosure. Continued investment and adhering to regulatory standards mitigates these risks.