Business
HOW WELL DO YOU EVALUATE RISK?
By Chris Butler, Principal Consultant, Sungard Availability Services
Did you know the world’s most dangerous animal is not a shark, or a bear, but is in fact a mosquito?
What’s certain is that human perception of risk is notoriously flawed; often, the events that concern and outrage us the most are the least likely to happen.
From political and economic tremors to cyber threats, 2017 represents another minefield of risks for businesses. For organisations, forging a deepened understanding of both threats and risk factors is crucial for remaining robust, resilient, and most of all, ahead of the competition. Part of this involves separating the myths from reality. So, what then are the real risks to business today?
- Reputational damage – This need not necessarily be caused by a fatal accident and ecological disaster like the Deep-water Horizon oil spill after which BP’s reputation and ability to bid for new contracts plummeted following its mishandling of crisis communications. As KitchenAid found to its cost, an employee inadvertently sharing a tasteless joke on the company Twitter account instead of his/her personal handle also has the potential to do damage. (To its credit, the company responded with a swift, credible apology and explanation within eight minutes of the tweet appearing – an excellent example of good crisis communications).
- Communications failure–Our own invocation statistics confirm that, communications failures share equal first with hardware and power failures are the leading reason for customers invoking their recovery arrangements with us. This was the cause of just over afifth (21%) of all invocations in 2016.[1]
- Weak links in the supply chain – It may be an oldie, but our digital age makes it no less true than before; an organisation is only as strong as its weakest link and it is vulnerable to any shortcomings in its third party ecosystem – that is vendors, partners, contractors and suppliers – which can have serious consequences.[2]
- Compliance with new legislation – Looking specifically at the General Data Protection Regulation (GDPR), an organisation’s readiness to adapt to the new challenges of data privacy and reduced tolerance for data breaches represents both an opportunity and a threat. We expect data breaches to increase this year as hactivists or blackmailers expose data privacy failings, leading to GDPR non-compliance issues.
And, of course with Cyber Security – the theme of this year’s BCAW– there is the ongoing and growing threat posed by:
- Malware – Home Depot took six months to discover malware had been installed that allowed hackers to steal the data of 56m customers before the breach was identified. Making a bad situation worse, it transpired that the management’s attitude towards staff raising concerns over poor information security was “We sell hammers”.
- Cyberattacks – Hackers were able to gain entry to French media organisation TV5Monde and take down its social media, websites and emails. The reconnaissance took place over an estimated five months before the attack was launched and it was over two hours before the station regained some control. Overall, 12 TV channels were taken off-air for 18 hours.
Closer to home, Tesco suffered the largest cyberattack ever on a UK bank with some £2.5m stolen.[3] Quite apart from the reputational damage, Tesco faces a potential fine under the EU’s General Data Protection Regulations that could be as high as £2bn. The financial sector is four times more likely to suffer a cyberattack than other sectors and in 2016 there was a 40% increase in cybercriminal activity[4] targeting the financial services industry.
- Ransomware–This continues to increase with the FBI estimating it will become a $1bn industry this year.[5] However, its ‘success’ is largely due to the human factor. Social engineering and phishing are two of the criminal methods that hinge on poor personal behaviours or lack of awareness in the individual.
While many think the elderly are more vulnerable, they are by no means the only target. Younger people may be tech-savvy but they are also more inclined to be more trusting and unaware of the proliferation of threats and means of attack.With one in 20 Twitter accounts estimated to be a fake bot account, we should all be aware of the dangers posed by social media and sceptical of potentially fake sites offering too-good-to-be-true deals on the latest Raybans or tempting links on Facebook.
Despite increasing awareness of the cyberthreats, hazards and risks that abound, human frailties and impulses will continue to provide challenges to business leaders in 2017 and beyond.
[1]Sungard Availability Services Availability Trends Report 2016
[2]http://www.standard.co.uk/news/uk/nandos-diners-fury-as-restaurants-run-out-of-chicken-on-bank-holiday-a3432166.html
[3]https://www.theguardian.com/business/2016/nov/08/tesco-bank-cyber-thieves-25m 8.11.16
[4]https://cybernewsgroup.co.uk/merchants-and-financial-institutions-deal-with-escalating-cyber-attacks/
[5]http://money.cnn.com/2016/04/15/technology/ransomware-cyber-security/
Business
UK delays review of business rates tax until autumn
LONDON (Reuters) – Britain’s finance ministry said it would delay publication of its review of business rates – a tax paid by companies based on the value of the property they occupy – until the autumn when the economic outlook should be clearer.
Many companies are demanding reductions in their business rates to help them compete with online retailers.
“Due to the ongoing and wide-ranging impacts of the pandemic and economic uncertainty, the government said the review’s final report would be released later in the year when there is more clarity on the long-term state of the economy and the public finances,” the ministry said.
Finance minister Rishi Sunak has granted a temporary business rates exemption to companies in the retail, hospitality, and leisure sectors, costing over 10 billion pounds ($14 billion). Sunak is due to announce his next round of support measures for the economy on March 3.
($1 = 0.7152 pounds)
(Writing by William Schomberg, editing by David Milliken)
Business
Discounter Pepco has all of Europe in its sights
By James Davey
LONDON (Reuters) – Pepco Group, which owns British discount retailer Poundland, has targeted 400 store openings across Europe in its 2020-21 financial year as it expands its PEPCO brand beyond central and eastern Europe, its boss said on Friday.
The group opened a net 327 new stores in its 2019-20 year, taking the total to 3,021 in 15 countries. The PEPCO brand entered western Europe for the first time with openings in Italy and it plans its first foray into Spain in April or May.
Chief Executive Andy Bond said its five stores in Italy have traded “super well” so far.
“That’s given us a lot of confidence that we can now start building PEPCO into western Europe and that expands our market opportunity from roughly 100 million people (in central and eastern Europe) to roughly 500 million people,” he told Reuters.
To further illustrate the brand’s potential he noted that the group has more than 1,000 PEPCO shops in Poland, which has a significantly smaller population and gross domestic product than Italy or Spain.
The company, which also owns the Dealz brand in Europe but does not trade online, has already opened more than 100 of the targeted 400 new stores this financial year.
Pepco Group is part of South African conglomerate Steinhoff, which is still battling the fallout of a 2017 accounting scandal.
Since 2019 Steinhoff and its creditors have been evaluating a range of strategic options for Pepco Group, including a potential public listing, private equity sale or trade sale.
That process was delayed by the pandemic, but Steinhoff said last month that it had resumed.
“The business will be up for sale at the right time. It’s a case of when, rather than if,” said Bond, a former boss of British supermarket chain Asda.
Pepco Group on Friday reported a 31% drop in full-year core earnings, citing temporary coronavirus-related store closures.
Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) were 229 million euros ($277 million) for the year to Sept. 30, against 331 million euros the previous year.
Sales rose 3% to 3.5 billion euros, reflecting new store openings.
($1 = 0.8279 euros)
(Reporting by James Davey; Editing by David Goodman)
Business
Fashion-focused livery launch reveals new colours for Gasly, Tsunoda in 2021
Scuderia AlphaTauri debuted their colours for the 2021 Formula 1 season as drivers Pierre Gasly and Yuki Tsunoda unveiled the team’s new look with the livery for their AT02 racecars. The setting was a fashion-forward launch in the all-new showroom of AlphaTauri, Red Bull’s premium fashion brand.
Salzburg (AUSTRIA) – Formula 1 team Scuderia AlphaTauri served up a stylish preview of the new F1 season with a presentation of its 2021 livery alongside key looks from the upcoming Autumn/Winter 2021 collection of Red Bull’s premium fashion brand, AlphaTauri. The launch – held at AlphaTauri’s new showroom in Salzburg, Austria and presented digitally – marked the first time that drivers Pierre Gasly of France and Yuki Tsunoda of Japan have appeared together as teammates.
After a successful first season racing in AlphaTauri colours, the Italian outfit is looking to challenge the top of the ultra-competitive midfield in 2021, and the two young drivers have been assigned clear-cut roles. Gasly is Team Leader. The 25-year-old, who made his Formula One debut with the team in 2017 under its former name, Scuderia Toro Rosso, has earned two F1 podiums. During the 2020 campaign, Gasly’s maiden win at Monza was a defining moment for him and the team under its new name.
Tsunoda, 20, is the first Japanese driver to race in F1 since 2014, his promotion coming off the back of a fast, four-season trajectory from winning the 2018 F4 Japanese Championship and finishing third in the 2020 FIA F2 Championship to entering the top-level ranks this year. Expectations are high for his rapid style of learning to complement the experience of Gasly.
“The decision to go for Pierre and Yuki in 2021 was taken because Scuderia AlphaTauri’s philosophy is still to give talented young drivers from the Red Bull Junior Program the opportunity to step up to F1 and to educate them – this is why Yuki now gets his chance,” explained Team Principal Franz Tost. “With Pierre on Yuki’s side we have an experienced driver, who can help our Japanese rookie to develop faster, but at the same time we can aim for good results. I think this pair is the best possible scenario to achieve both our targets, and I’m also confident this will be a successful one.”
In 2020, Scuderia AlphaTauri won best livery by a landslide, and the team’s all-new, matte blue and white racecar livery took center stage with the drivers at the fashion event, anticipating the 2021 model that will debut at pre-season testing in Bahrain on 12 March. The test is the precursor to an unprecedented 23-race schedule, and in preparation for the demanding calendar both drivers have spent time at Red Bull’s Athlete Performance Center for intense fitness testing.
“I’m ready to take on the role of team leader. Yuki is a very quick driver, and he will help us move the team forward – we will work together to achieve that,” said Gasly, the team’s all-time top points scorer. “I really believe last year was the team’s best in terms of the way it worked, the development, the performance and the way it managed the race weekends. I’m always hungry for more, and I’m sure we can achieve great things in 2021.”
Tsunoda, who was honored with the Anthoine Hubert Award for best Formula 2 rookie in 2020, added, “I’ve been lucky enough to spend some time with Scuderia AlphaTauri ahead of the season, so I’m already developing strong relationships and learning a lot from them – including Pierre, who is an incredible talent. My main goal is to learn quickly and deliver results as soon as possible, and I’m really excited to get started.”
The launch at the AlphaTauri Showroom not only gave Gasly and Tsunoda a preview of the AlphaTauri Autumn/Winter 2021 fashion collection, but the drivers had the chance to select their new off-grid looks ahead of the season start.
Ahmet Mercan, CEO AlphaTauri, summarized: “This is a triple reveal at a unique point of time: a new AlphaTauri Showroom where fashion meets F1, a first look at the AW21 AlphaTauri collection and the unveiling of the new Scuderia AlphaTauri F1 livery and driver pairing.”
Scuderia AlphaTauri fans don’t have long to wait for racing action: The FIA Formula 1 season kicks off at the Bahrain Test on 12-14 March, in preparation for the Bahrain Grand Prix on 28 March.
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