Risks and uncertainties

The key risks under Digia’s risk management in 2011 were customer, personnel, project, data security, integration and goodwill risks.

Measures for managing customer risks included the active development of the customer structure and the active prevention of potential risk positions. Personnel risks were assessed and managed using a regular goal and appraisal discussion process for key personnel. To develop personnel commitment, measures were taken to produce more systematic and effective internal communication through regular personnel events and increased management visibility. The Group carried out key project audits with a view to enhancing project risk management and securing the success of project deliveries to customers. In addition, the Group’s certified quality management systems were re-evaluated and approved, and the Group streamlined its project delivery reporting procedures. In order to manage data security risks, the Group carries out data security audits and continuously develops operating models, practices and processes that promote data security. The management team is tasked with managing risks associated with the integration of business operations, unified operating models and best practices, as well as their integrated development. With respect to IFRS-compliant accounting policies, the Group actively monitors goodwill and the related impairment tests as a part of prudent and proactive risk management practices within financial management. Short-term uncertainties are related to any major changes occurring in the company’s core business areas.

The business risk associated with the mobile market was realised during the period, fundamentally changing the operating environment. However, this mostly eliminated the company’s business risk associated with the mobile market.

In addition, the Eurozone debt crisis has deepened and the risk of economic recession has grown, which may affect customers’ investment decisions and liquidity, and thereby the company’s sales and profits. There have already been signs that the greater uncertainty is affecting customers’ investment decisions, and some planned projects have been delayed. However, these signs have not assumed alarming proportions in recent weeks.

Furthermore, the growth in customer project sizes increases the risks related to projects and their profitability.