Enterprise Risk Management at Polaris

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Case Details:

Case Code : ERMT-010
Case Length : 7 Pages
Period : 2003
Pub Date : 2003
Teaching Note :Not Available
Organization : Polaris
Industry : Information Technology (IT)
Countries : India

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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

Incorporated in 1993 by entrepreneur Arun Jain, Polaris Software was one of India's leading software solutions providers in the Banking and Financial Services segment. The company's business could be broadly divided into five categories.
• software development,
• migration and re-engineering services,
• maintenance,
• product enhancement
• ERP.

In 2001-02, US/North America contributed 41.2%, Europe contributed 20.4%, Asia Pacific & Japan contributed 21.5% and India contributed 16.9% of Polaris' revenues.

Enterprise Risk Management | Case Study in Management, Operations, Strategies, Enterprise Risk Management, Case Studies

Polaris Software merged with OrbiTech Solutions on November 1st 2002. OrbiTech, a SEI CMM Level 5 company and previously called Citicorp Overseas Software Ltd. - COSL. had been established in 1985 as the software development center for all Citigroup entities. The new merged entity, which would continue to be called Polaris Software Lab Limited, would have 3800 employees and combined revenues of over Rs.600 crores.

According to Polaris, the 'know-how' of Polaris' banking solutions delivery combined with the 'know-why' of OrbiTech would provide the new merged entity a superior delivery platform for future customer acquisitions. The merger would also enhance the portfolio of the services and product offerings.

Concentration Risks

Much of Polaris revenues came from Banking, Financial Services and Insurance (BFSI). This segment contributed 71.1% to the company's revenues in 2001-02. Over-dependence on this segment was a source of potential risk.

Two clients, NEC and Citigroup, contributed a major portion of the revenues. This over dependence was also a source of risk.

Marketing Risks

Given the volatility that had come to characterize the markets, Polaris believed its revenues could fluctuate depending upon market circumstances. Polaris might also lose clients to competitors with larger financial muscle, deeper technical expertise and larger manpower resources. Polaris' ability to compete depended upon the responsiveness of competitors to their clients and their propensity and ability to undercut prices...

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