Enterprise Risk Management at Digital Globalsoft
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Case Details:
Case Code : ERMT-009
Case Length : 10 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Digital Globalsoft
Industry : Information Technology
Countries : Global
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Introduction
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Digital Global Soft Ltd (Digital) formerly known as Digital Equipment India
Limited (DEIL) was promoted in 1988 by Digital Equipment Corporation (DEC) of US
and Hinditron to manufacture supermini, mini and mainframe computers. The
company was a 51% subsidiary of DEC.
Following the merger between Compaq and Digital Equipment Corporation in the US,
Digital Globalsoft became a part of the Compaq Worldwide organization. In India,
DEIL continued with the hardware equipment business until June 1999, when it
restructured its business by transferring its non-software assets, liabilities
and staff to Compaq India.
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Digital's principal activities were to provide software
development and services.
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Projects were executed through both on site presence
and remote service capability. The company enjoyed a `preferred
supplier` status to the network and system integration services
business unit of Compaq.
Digital also enjoyed the unique advantage
of having HP, one of the world's largest IT companies, as a major
investor, customer and partner. companies. |
Concentration Risks
Digital believed its main strengths were its strong multinational brand,
location in India and deep customer relationships. Some of the other strengths,
the company had identified were: - Customer comfort with past heritage
- Flexible business models aligned with customer needs
- Robust and high availability technical infrastructure
- Flexibility and speed of execution
- Good corporate governance
- Commitment to delivering value & superior customer experience
Concentration Risks
Client Concentration Risk
A significant portion of Digital's business came from Compaq Computer, USA (now
merged with Hewlett Packard). The volume of work with Compaq might fluctuate
from year to year. Digital was not the only software company in India to get
business from Compaq. Moreover, Digital was exposed to the risk of price
variations in its contracts with Compaq. Digital was also at risk if Compaq
decided to do more work in-house than outsource it to Digital.
Digital had attempted to deal with this risk by ensuring delivery of high
quality, low cost services backed by reliable and timely completion of its
projects. The company had contributed to its parent company in the form of cost
savings, support in winning deals and creating new business opportunities...
Excerpts >>
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