Atos - Registration Document 2016

F Risks analysis [G4-14] F.2 Business risks [G4-13]

Risks related to contracts and project performance

F.2.3

may result in significant prejudicial consequences for clients and either related to delays or to unsatisfactory levels of services, may result in penalty claims or litigations. The IT services provided to customers are sometimes a critical IT systems or any deficiency in the performance of services, of their businesses. Any inadequate implementation of sensitive Oftentimes IT solutions also play a key role in the development element for the performance of their commercial activities. Below are some of the key risks Atos needs to manage: Integration frequently involves products (whether software or products and/or product customization: Systems degraded performance resulting from third party • cannot control. In addition, the particular requirements of parties and which, by definition, the IT service provider customized requirements) designed and developed by third hardware, standard or adapted or specifically developed for certain clients who wish for specific functionalities may disrupt difficulties in providing the services; the operation of the product or generate significant delays or delivery failures: Also, it is a practice of the IT sector to exposure due to inadequate assessment of services or •

penalties for late performance. other contracts are invoiced according to the service provided. enter into certain contracts on a fixed-rate basis whereas to an operating loss, by exceeding budget or payments of may lead to a budget or agreed timeframe overrun, and lead provided services or dedicated resources to a specific project For fixed-rate contracts, an under assessed scope of the being kept for tracking purposes. This process also covers the which service proposals are reviewed, with an inventory of risks dedicated specific process is in place, called Atos Rainbow under assessment of the solution) right from the offer stage. A where appropriate and follow up on outstanding actions. registers. This allows the Group to take any mitigating action execution phase of the contract, including updates of the risk rigorous review processes (of which a technical & delivery The Group seeks to minimize the risks described above through obligations and performance management. activities, combining legal risk assessment, contractual accounts to globalize and homogenize contract management Group Contract Management program is deployed on major In order to further strengthen Atos’ operational excellence, a

Acquisition / External growth risk

F.2.4

Acquisitions / external growth operations may have adverse in the case of: impacts on the achievement of the Group’s objectives, especially during the acquisition process; under-performing contracts which were not properly identified • employees. synergies from being reached or ineffective integration of ineffective integration efforts preventing expected level of •

In the context of the recent acquisitions (Xerox IT Services, Unify, Equens), Atos has rolled out an integration program of contracts and implement corrective actions. at risk in all countries in order to assess properly the fair value practices, and included notably an in-depth review of contracts efficiency in these activities through the use of Atos best “Integration Committee”. This program aimed to improve closely monitored by general management through a weekly

F

Atos | Document de Référence 2016

231