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Software AG GB 2013. englisch

GroupManagementReport • R&D and products • Marketing and branding • Sales and partner business • Administration These processes enable us to quickly create revenue and cost synergies. The acquisition-related risks were rated at risk category 1 and risk level 3 as of December 31, 2013. Product distribution risks Sales risks The complexity of our products together with the complexity of the requirements of our customers require a high level of experience and expertise on the part of our sales force. In addition, the sophisticated technology of our products necessitates a considerable amount of information when selling them. In order to lessen the complexity of selling our products, we categorized our products by sales platforms which serve to improve understanding of our products, both for sales staff and customers. The platforms provide appro- priate solutions at various communication levels. Individual products are also summarized by technology platforms that address specific subject areas. There is a risk that an unsuit- able platform or solution could be offered to solve a specific customer problem. In support of Sales, product R&D works continuously to complete the platform offering. In addition, global teams were set up as centers of excellence, and ad campaigns featuring software solutions for customer prob- lems were run to futher improve understanding of Soft- ware AG products and sales efficiency. These strategic sales risks were rated at category and level 2 at the end of 2013. Partnership risks Software AG’s dynamic growth strategy requires a substan- tial enlargement of indirect sales. Due to the complexity of our products, undertaking sales via partnerships is a chal- lenge. In order to ensure the success of indirect sales, Soft- ware AG has been making considerable investments in partner distribution channels for the last two years. The following measures were implemented: the right target target companies. At present, only relatively small target companies are available in the high-growth fields relevant to the four megatrends (big data, cloud, mo- bile and social). In order to identify emerging technological developments early, the M&A department is managed out of San Francisco, California. Due to the high number of glob- ally leading IT companies and the prevalent start-up culture in that region, Software AG is actively involved in quickly identifying and exploiting future trends in the IT sector. Furthermore, there is a risk that the companies acquired will not be integrated successfully. The associated challenges include the integration of the product portfolio, the process- es, the organization, the human resources, and the different corporate cultures. In order to successfully integrate acquired companies, we instituted the position of global integration manager. The following risk-mitigating processes have been defined for the time prior to and after acquisitions: Pre-acquisition phase Prior to a takeover, an intensive review is conducted to ascertain whether the technologies of the company in ques- tion effectively expand Software AG’s product portfolio, how market access and market penetration will change, and what synergy potentials can be realized. Every acquisition is preceded by a precise analysis of the financial condition of the target company conducted by an experienced due diligence team. Moreover, the question of whether the tar- get company’s corporate culture is compatible with ours is explored. Post-acquisition phase We identify potential problem areas as quickly as possible using established control mechanisms. The implemented processes are coordinated centrally and ensure the integra- tion of the following areas: 103 Corporate Governance Report of the Supervisory Board Consolidated Financial Statements Notes Additional Information Group Management Report Business and General Conditions Economic Report Events after the Balance Sheet Date Risk and Opportunity Report Remuneration Report Forecast Takeover-Related Disclosures Statement on Corporate Governance