Enterprise Risk Management at Digital Globalsoft|Enterprise Risk Management|Case Study|Case Studies

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

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.

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

Digital's principal activities were to provide software development and services.

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...

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