Press ReleasesKeri Toomey Bliss Integrated Communication 212.584.5471 Keri@BlissIntegrated.com
Tuesday, May 27, 2014
TECHNOLOGY INDUSTRY COMPETITION DRIVES EXPANSION AND M&A RISKS, ACCORDING TO BDO STUDY
- INCREASED LABOR RISKS ALSO PLACE COMPANIES ON EDGE -
Chicago – May 27, 2014 – Faced with fierce competition and the unrelenting demand to innovate and meet consumer needs, technology companies are increasingly turning to strategies such as mergers and acquisitions (M&A) and global expansion to defend their market positions. As technology companies increase their size, change structure and confront new geographic frontiers, they raise their exposure to related risks. Furthermore, the evolving regulatory landscape and looming changes to U.S. GAAP add to a climate of uncertainty. According to a new report from BDO USA, LLP, while competition and regulation are the most frequently named risks (mentioned by 99 and 98 percent of technology companies, respectively), more and more technology companies are citing risks related to M&A, supplier and vendor concerns, and threats to international operations.
The 2014 BDO Technology RiskFactor Report, which analyzes the most recent SEC 10-K filings of the 100 largest publicly traded technology companies in the U.S., also found that companies are increasingly addressing labor-related risks in their filings (cited by 83 percent of companies, up from 55 percent last year). Labor concerns are on the rise amid the shortage of highly skilled labor, the growing cost for healthcare benefits and an improving labor market. Additionally, global competition for talent is vigorous, with 81 percent of companies citing concerns over their ability to attract and retain key personnel. Tech companies also note risks related to managing a geographically dispersed workforce. Increased focus on these challenges is also in line with trends identified in the BDO Technology Outlook Survey, which found that 95 percent of tech CFOs do not plan to offshore their activities in the coming year. As companies repatriate previously off-shored positions, they increase their need for highly-skilled U.S. professionals.
“Competition is the consistent theme in many of the top risks in the technology industry this year,” said Aftab Jamil, partner and leader of the Technology & Life Sciences practice at BDO USA, LLP. “Companies are battling to manage, attract and retain the best talent, efficiently oversee supply chains and protect their valuable intellectual property, all while developing the most innovative products at fiercely competitive prices. In this fast-paced market, any delay or unanticipated cost can be the difference between success and failure.” Continue reading