Program code quality management
The IT teams ensure the quality of IT programs via the following measures, implemented at either the subsidiary or the Group level:
- dedicated development and test environments for each application, when necessary and possible;
- dedicated User Acceptance Testing (UAT) environments;
- dedicated pre-production environments where modifications to applications are tested prior to moving to production;
- dedicated production environments.
Use of cloud computing services
The Edenred group has a corporate private cloud solution to improve its level of IT security, in particular by protecting data centers and their availability and standardizing incident management and back-ups. The cloud is accessible via a wide area network (WAN) which the Group has developed jointly with a leading market player.
Alongside this private cloud, in 2018 Edenred unveiled a public cloud solution that enables the Group to provide its subsidiaries with more flexible solutions, especially when deploying new applications. Since 2020, certain Group operations have migrated all of their functions over to public cloud solutions. This migration to the cloud is set to continue as part of the process of enhancing the Group’s product and service quality.
These combined solutions ensure a high level of application availability and data security.
4.1.4 Group strategy and competitive environment risks
4.1.4.1 Competitive environment risks
Risk
The Group’s businesses are exposed to increasing competition from both international groups and local competitors (see section 1.1.4 “A global player dedicated to the world of work”, page 23 for a description of the Group’s main competitors). One or several markets may be penetrated by new entrants. These may be new companies, or existing companies that are changing their positioning in one or more markets. Competitive pressures may drive down rates in some economically fragile countries, resulting in contracts not being renewed or making it more difficult to win new contracts. If the Group is unable to effectively withstand these competitive pressures from new entrants, it may lose market share or experience a decline in business or margins.
In countries where Edenred has strengthened its leading position, certain competitors or commercial partners may be tempted to claim that the Group has used this position to circumvent or distort market rules.
Measures to manage the risk
To compete effectively against the main players in its markets, the Group applies a strategy of innovation and competitive differentiation in terms of product offer, positioning, customer experience and value for money.
In line with this strategy, Edenred is continuing to invest in digitalizing its product platforms and thereby develop highly relevant and innovative solutions for the world of work, with an outlay of around €300 million per year.
Edenred has also developed new services such as mobile payment and payment using application programming interfaces (APIs), which notably enable users to order from meal delivery platforms, with 200 different partners. This differentiation strategy forms the basis of balanced and long-lasting relations with the Group’s various stakeholders. In the Fleet & Mobility Solutions business line, the Group is continuing to roll out its Beyond Fuel strategy. Beyond Fuel was strengthened in 2021 by innovations such as the cloud-based platform in Brazil, which gives fleet managers direct access to all their services, and by the expansion of the UTA One toll solution to six more countries.
In addition, to capture the potential of its existing base of clients, partner merchants and end users, the Group has begun implementing customer satisfaction measurement, retention, cross-selling and monetization tools for its value-added services. Edenred is also expanding into new market segments, such as Corporate Payment Services, where it in turn is playing the role of a newcomer challenging the positions of market incumbents.
4.1.4.2 Risks associated with the acquisition strategy
Risk
The Group’s strategy is based in part on external growth, mainly through acquisitions. It may not be possible to identify credible targets or to close deals at the right time and the right price.
In addition, in order to obtain approval from competition authorities for acquisitions in one or several jurisdictions, the Group may have to accept certain conditions such as a requirement to dispose of certain assets or business units.
