The UK's largest technology businesses are living dangerously if
they continue to focus only on internal risks, according to
consultant
BDO Stoy Hayward.
A BDO analysis of the annual reports of the UK's top 50
technology companies identified that directors were placing a
stronger emphasis on internal risks instead of focusing on external
risks.
When identifying their
key risks, the UK's largest technology companies highlighted
internal issues such as talent management (60%) and
innovation/development of new products/services (58%) as the most
common risks they are seeking to tackle.
However, said BDO, these are all very inward-looking risks and
fail to take into account potentially significant external issues,
such as reliance on key markets (22%), protection from hackers
(14%), data integrity (14%) and infrastructure risks (11%), all of
which fell far further down the list.
Julian Frost, head of technology at BDO Stoy Hayward, said, "We
were very surprised at the limited external focus displayed by the
UK's largest technology companies.
"Internalising can cause companies to miss the most obvious
external risks as well as opportunities. This is particularly
important given the current tough economic environment."
He said, "We were very surprised that only 14% of the largest
technology companies are highlighting the importance of ensuring
the integrity of their data/intellectual property or protecting
themselves from hackers. These are highly important areas,
especially as we see the issue of data integrity appearing on a
weekly basis in the media."
In addition, the research highlighted that global economic
conditions and interest rate risks came in at a lowly 22% and 14%
respectively. However, even more surprising, said BDO, was that
just 10% considered risks associated with international operations
a priority.
"I suspect that some
companies are currently regretting not having prepared for the
risks arising from global economic conditions or interest rate
risks. In fact, a focus on these areas in recent years would
actually present an organisation with a number of great
opportunities now," said Frost.
The research also compared the UK's results with the top 100
technology companies in the US, and found a similar lack of focus
on external risks.
Infrastructure risks, reliance on key markets, interest rate
risks and data integrity risks all failed to even make the list of
top 20 factors in the US, unlike in the UK at least.