Submitted to: Sir Riaz-ud-din
Submitted By: Amna Riaz Sadaf Zehra Shahab Mustafa MBA III
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BATCH 2007-2009
DADABHOY INSTITITE OF HIGHER EDUCATION
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Praise be to Allah, the Lord of the worlds, The Beneficent, the Merciful Owner of the Day of the Judgment Thee (Alone) we worship Thee (Alone) we as for help Show us the straight path The path of those whom thou hast favored Not (the path) of those who earn Thine anger nor of those who go astray (A l - Fa t iha )
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Dedications: To our loving parents are cooperative teachers especially Mr. Riaz Uddin with whom support and continues support we are able to make this project. Without their love, support and guidance we could not have been able to make this report.
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Acknowledgments: The credit of this extensive and intensive research and project development goes to our respected mentor Mr. Riaz Uddin who always helped us and guided us through out our project work. Also to IT professional of NADRA and PLEXUS (PVT) LTD. For their guidance and support who gave us practical knowledge about software houses.
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Executive Summary SAS TECH is a start-up organization whose vision is to create the finest education/entertainment software for non-reading individuals with developmental disabilities. The software product has been designed and created by IT specialist with vast industry experience and knowledge, to meet the needs of this targeted customer segment. The software will be constructive by giving customization to the product and will be according to client’s choice and requirement. SAS TECH will be formed in August 2009 as a Customer oriented IT platform idea founded and owned by partners Ms. Amna, Ms. Sadaf & Mr. Shahab
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SAS Tech is the software house which is concentrating on Pakistani projects specially to participate in development of Pakistan thus enhancing IT value and strength in country.
Mission Statement: Giving quality products to the active economy drivers in market
Vision: Focusing on providing quality services to the target market which is playing important role in country economy and progress i-e Business concerns, manufacturing concern, banks and educational institutes. Thus we can promote technology within these working concerns which results into their efficient participation in Pakistan’s eonomy and progress.
1-Market Analysis The Pakistani IT industry today has an impressive story to tell. Much like the successful startup that one would have not heard of a few years ago but is all of a sudden the talk of the town. The Pakistan IT industry has started to appear on the radar of firms like Gartner and IDC and in reports by AT Kearny and the World Bank. It is a transformed industry growing exponentially and creating a stir. 1.1 Estimated Size of IT Industry From its nascent beginnings in the late 1980s, the industry has successfully arrived to a point where its value proposition has been validated over and over again. The largest members are grossing 15-25 million dollars in revenues, and receiving 100 million dollar valuations. Most tech companies are growing in excess of 30% a year annually. The industry as a whole is doing over 2 billion dollars a year in revenue, up from less than a billion dollars a few years ago.
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1.2 Software & Services Sector with 39% Growth For 2007 – 08 About half of this growth is coming from foreign, software and high end services projects. IBM, Cisco and Microsoft are expanding Pakistan operations aggressively while several startups are now backed by VCs such as e-Planet Ventures, Motorola, and Adobe. 1.3 Employment of Professionals by 41% Growth Sectors and countries have achieved in 15-20 years, Pakistan’s technology scene is poised to achieve in less than a decade. Putting it all together, the Pakistani Technology industry is very different from what it was in the early 1990’s. From 4 founding companies in 1994, PASHA’s current membership exceeds 370. From 4,619 full-time employees in 2004, current employment is at 12,232 and rising. The number of QA Professionals has doubled in the last 3 years and 20% of those employed in the sector are foreign qualified. Fast becoming a hub of high performance business, the questions now asked are if growth this year will be 28% or 50%, if there will be enough skilled HR to staff demand, if there will be enough office space available next year.
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2-The Industry at Glance
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3. Departments: Our main idea is to open a software house in Karachi which would be the biggest software house in the Pakistan. We will have mainly two departments.
Departments
Direct Projects
Out sourcing
3.1 Prospecting Projects Supporting ANR (Afghan National Refugee): We will support ANR project in collaboration with NADRA by using SQL, Oracle Data Base for Institutions
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Basically concentrating on the projects and solutions for institutions like Educational, Medical and Business Growing Institutes. 3.2. Launch of New software: o
SAS TECH will launch new software and will introduce a new idea in history of Pakistan.
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We will introduce software that will help the disable people. This idea has been taking from research work of Dr. Sue who first introduced the idea of starting software of such kind.
4. The Market SAS TECH has identified four distinct market segments that will be interested in the software product. These segments are the most likely consumers of the software. The segments are as follows: •
IT Intensive Corporate - The corporate and commercial business which are focusing on IT software and having IT oriented environments e.g. banks, manufacturing concerns.
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Proactive Educational Concerns- Educational institutes who are taking an active role in the education of their students will be looking for aids that they can use at educational places to help with their students learning progress.
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Agencies- Internationally many countries have agencies that act as brokers to connect service providers with individuals. The agencies have generally been formed as a result of a settlement or payout from a lawsuit (including class action).
4.1Competitive Edge There is several companies on the market selling business and educational products for this target segment. SAS TECH will leverage their competitive edge by incorporating entertainment into their software product, a means of creating interest while using the software. This interest will increase the amount of time that the users use the software, thereby increasing the effectiveness of the program. SAS TECH is convinced that the customer interest and trust towards the product instead of having to be forced to use it.
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SAS TECH has been inspired by development in IT industry. SAS TECH has forecasted revenues of Rs.400, 397 and Rs.490, 000 for years two and three. 4.3 Keys to Success •
Develop business and educational software that is constructive and supportive. If it is not so, it likely will not be used.
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Implement a strong marketing campaign to develop awareness of the software and its benefits within all of the business centers, educational institutes, brokerages.
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Design strict financial controls for the organization.
4.4 Objectives •
Increase sales by triple for the first two years.
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Achieve 20% market penetration by year four.
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Assist more than 10,000 different individuals with development disabilities.
500,000 400,000
300,000 200,000 100,000
(100,000)
2009
2010
2011
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5. Company Ownership The company was founded and is owned by Ms Amna Riaz. She is a respected, enthusiastic, passionate and strategic, former educator of special education with an emphasis on autism. Sue will leverage her extensive knowledge and industry contacts to make SAS TECH a success. 5.2 Start-up Summary SAS TECH is a start-up organization. The following assets and professional services will be needed for the formation and start of operations. •
Legal services for company formation.
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Accounting services to set up the accounting shell of the company QuickBooks Pro software.
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Computer programmers (3) to rapidly develop the software. An individual programmer could complete the coding of this product however; SAS TECH is interested in launching the product fast therefore they will employ multiple programmers to speed the process up.
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Eight computer workstations, including one server. Seven of the stations will have Microsoft Office; one of them will have QuickBooks Pro. Three networked laser printers.
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A broadband Internet connection.
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Office cubicle furniture for seven employees.
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Seven extension telephone system.
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Copier and fax machine.
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Lunch room furniture and appliances including a refrigerator and microwave.
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Shipping materials including boxes scales, etc.
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Promotional materials.
Market Analysis Summary
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The market for life skills training software can be segmented into four groups. The first is centers for independent living, the second is school districts, the third is proactive parents, and the last is agencies charged with special education administration. Each of the four segments is distinct and will be communicated with in different ways. These four segments have been chosen because they are the main purchasers of products for individuals with developmental disabilities. The software industry for individuals with developmental disabilities has just begun to grow. Only within the last few years has there been a significant increase in the number of computers found in classrooms using specialized software. Competing with the software companies are products that have printed pictures on them, typically laminated cards. While these cards are helpful, they are less interactive. Market Segmentation SAS TECH has identified four distinct market segments for their products: •
Centers for Independent Living- These are typically not-for-profit entities that assist individuals with developmental disabilities. The centers help clients with transition skills, making them more independent. These centers offer a wide range of life skills training for the individuals.
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School Districts- All students are guaranteed an education therefore the school districts must provide the appropriate education until the individual is 21 years old. School districts are consumers of these products in pursuit of their goal of providing the students with an appropriate education.
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Proactive Parents- These are parents of individuals with developmental disabilities who are taking an active role in their child's education/life skill training. Reinforcing these skills as much as possible is useful; therefore there are many parents that will purchase the software for home use.
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Agencies- Many states, often as a reaction to a lawsuits (individual and class actions) have set up agencies or brokerages whose purpose is to dispense money from the state to the service providers assisting the individuals in need.
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Money from the state to the service providers assisting the individuals in need.
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SWOT Analysis: Strength: Highly qualified staff Introduction of new technology in Pakistan Providing customized products. Focusing on multiple target markets. Quality value added services. Weakness Lack of training within organization in start of business Name recognition Opportunities: Vast market Untapped target market to cover Variety of products according to clients demand Threats Globalization trend 16
High turn over rate Impact of Economy deterioration in market. 6-Technical Analysis: 6.1 Labor . A professional software house normally consists of at least three dedicated sub-teams : •
Business Analysts who define the business needs of the market
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Software Designers/programmers who creates the technical specification and next do a coding
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Software Testers who are responsible for the whole process of quality management
The pros: •
Each person has full knowledge about the full production cycle
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People are doing various tasks what makes especially young people excited about their work
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There is a very good possibility to manage the work load especially in crisis situations like "all hands on pump"
6.2 Location and Size: Our software house will be situated in main SADDAR area of Karachi. Size of our software house would be approximately 2 acre. 6.3 Machineries and technology We need to install high quality machinery. For this purpose we will import our computers from U.S market and their technical people will install the computers and networking.
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6.4 Training For better and efficient use of the imported machinery we will send our experiences programmers to U.S for training. 6.5 Software House capacity: We will arrange 24-hours open at our software house and employees will have morning and night shifts. So we can increase the production capacity of our software house and ultimately more people will get employment. 6.6 Input Constraints Biggest constraint is load shedding. For this purpose we will arrange generators. Generators will increase our cost but it will increase our results accordingly. 6.7 Methodologies Software house may use a number of various methodologies to produce the code. These can include: •
The Waterfall Model, including project management methodologies like PRINCE2 or PMBoK
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Agile Software Development, such as Extreme Programming and SCRUM
There are also some methodologies which combine both, such as the Spiral Model, RUP or MSF.
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6.8 Projects in Controlled Environments We will mainly follow PRINCE2. (Projects in Controlled Environments)
Fig: PRINCE2 Methodology
6.9-Software House Sequence The sequential working of the our Software house with the team and procedures of IT is given in pictorial form
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7-Financial Analysis 7.1 Cost of Project The estimated cost of project is Rs 15,670,000 according to proposal research and market studies.
7.2 Means of Financing Partner’s Equity: Partners Name Ms Amna Riaz Ms Sadaf Zehra Mr. Shahab Mustafa Ms Khudija Riaz
Equity in Rs 700,000 700,000 700,000 700,000
Borrowings o Borrowing from bank o Long-term Loan
Rs 420,000 Rs 840,000
7.3 Projections 21
Shareholding 25% 25% 25% 25%
Start-Up Expense
Expense Heads
Amount in Rs
Legal License Marketing Furniture Fixtures
10,000 2,000,000 210,000 900,000 350,000 50, 00,000
Computers
Hardware & software
Laptop
Printer
Projector
Main Server -Networking
Equipments
50, 00,000
Photostat machine
Fax machine
Stationery
Generator
Telephone Research & Development Rent Advances and Rent Other expenses Total Start-Up Expense Required cash in hand TOTAL 7.4 Projected Profit And Loss Statement
30, 00, 000 700,000 500,000 15,060,000 610,000 15,670,000
Projected Profit And Loss Statement 2009 (in Rs) 2010 (in Rs) Sales 2,000,000 2,150,000 Less: Cost of Sales (1,200,000) (1,450,000) Gross Profit From Sales 800,000 700,000
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2011 (in Rs) 2,500,000 (1,500,000) 1,000,000
Selling and Administration Expense Salaries and wages 250,000 Commissions 15,000 Office suppliers 90,000
250,000 15,000 90,000
250,000 30,000 70,000
Legal fees Advertising Equipment Research & development
50,000 210,000 50,000 25,000
50,000 250,000 10,000 35,000
100,000 300,000 70,000 50,000
Interest Sundry expense Less: other income
70,000 100,000 860,000
70,000 50,000 800,000
140,000 90,000 1,100,000
Total expenses
(75,000)
(130,000)
(910,000)
Net Profit
5,000
30,000
90,000
7.5Projected Balance Sheet Assets Current Assets Cash Accounts Receivable Inventory Prepaid rent Bill Board Total Current Fixed Assets Furniture Fixture Computer Hardware
2009 400,000 600,000 165,000 600,000 50,000 865,000
2010 450,000 550,000 165,000 675,000 (100,000) 1,940,000
2011 650,000 500,000 200,000 650,000 250,000 2,250,000
900,000 350,000 345,000
900,000 350,000 345,000
1,000,000 350,000 500,000
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Equipment Less: Accumulated
425,000 (100,000)
425,000 (100,000)
500,000 (100,000)
Depreciation Total Fixed Assets Total Assets
1,920,000 3,785,000
1,920,000 3,860,000
2,250,000 4,450,000
Liabilities And Capital Current Debt:
2009
2010
2011
Accounts Payable Accrued Expense Current Borrowing Subtotal Current
200,000 100,000 210,000 510,000
300,000 200,000 210,000 710,000
250,000 150,000 420,000 820,000
Liabilities Short term loan Long-
560,000
420,000
840,000
term Loan TOTAL LIABILITIES
1,070,000
1,130,000
1,660,000
2009
2010
2011
700,000 700,000 700,000 700,000 15,000 2,715,000 3,785,000
700,000 700,000 700,000 700,000 30,000 2,730,000 3,860,000
700,000 700,000 700,000 700,000 90,000 2,790,000 4,450,000
Capital Stock Ms. Amna Riaz Ms. Sadaf Zehra Mr. Shahab Mustafa Ms. Khudija Riaz Profit Total Capital Total Liab & Capital
8-Strategy and Implementation Summary SAS TECH will leverage their competitive edge of combining business, education and manufacturing concerns within their software product to help them quickly gain market share. All of the competitors software concentrates on skill development. While this is useful, it does have customer oriented. SAS TECH has added entertaining elements into their software, encouraging the students to use the software and have fun while they learn.
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SAS Tech’s marketing strategy will be to raise visibility of the software product among the decision makers who are business and institutional handlers. The campaign will be targeted to reach these people/organizations so that they are aware of the options they have in developing IT environment. Lastly, the sales strategy will seek to convince the prospective customers that there can be significant gains in learning through SAS Tech’s carefully designed software.
8.1 Marketing Strategy SAS TECH's marketing strategy reflects their perception of the industry: that most of the companies operating today are operated by business and manufacturing concerns; that they make number of products; but not many people know about the products, and overall awareness is poor. The reality is that so many prospective customers in Pakistan are unaware of the different available products. SAS TECH will employ an aggressive marketing strategy to raise awareness of their products among customers who are in need of these products, and thereby increasing software purchases. SAS TECH will be advertising heavily in various industry journals and magazines as a proven method of reaching the target audience. The ads will generate awareness of SAS TEC Hand will lead the customers to SAS TECH's website where they can demo the software. This strategy is based on the philosophy that you can have a great product, but if no one knows about it you are not going to be successful. 8.3 Sales Strategy SAS TECH will use an aggressive sales campaign that will rely on conference participation as well as target cold calling. There are numerous industry conferences throughout the country that are specifically for educators. The conferences are the places where people get together and share strategies that work with their colleagues in different departments and different states. While the conferences are not typically packed with vendors, SAS TECH will be present since the conferences are a captive assortment of the right people – the educators that are in the trenches working with the special students.
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The conferences will be an excellent networking opportunity and should develop significant sales. The second prong of the sales strategy will be a campaign aimed at contacting key decision makers and introducing them to SAS TEC Hand their products. Research will be done to determine target business, manufacturing concerns and educational institutes and money has been given to agencies to disperse to various service providers. This information will be valuable in determining who the proper consumer for the special software is. These personal contacts will help generate significant sales. 8.3.1 Sales Forecast The following table and charts present sales forecasts in a monthly format as well as yearly projections. Forecasts have been conservatively estimated to increase the likelihood of attainment. Sales have been broken down by customer group. A fulfillment house will be contracted to produce, package, and ship the hard copy software product to purchasers. Download of the software from the SAS TECH website will be available. This will drastically reduce cost of goods if purchasers use the download only purchase option. Purchaser download of the software from the SAS TECH website will be available. This will drastically reduce cost of goods if purchasers use the download only purchase option.
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20,000 18,000 16,000 4,000 12,000 0,000 8,000 6,000 4,000 2,000
2009
2010
2011
Sales Forecast 2009
2010
2011
Sales
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Centers for Independent Living
Rs.23,439 Rs.96,957
Rs.118,616
School Districts
Rs.43,405 Rs.179,550 Rs.219,660
Proactive Parents
Rs.9,983 Rs.41,297
Rs.50,522
Agencies
Rs.19,966 Rs.82,593
Rs.101,044
Total Sales
Rs.96,793 Rs.400,397 Rs.489,842
Direct Cost of Sales Centers for Independent Living School Districts Proactive Parents Agencies Subtotal Direct Cost of Sales
2003
2004
2005
Rs.1,641
Rs.6,787
Rs.8,303
Rs.3,038 Rs.12,569
Rs.15,376
Rs.699
Rs.2,891
Rs.3,537
Rs.1,398
Rs.5,782
Rs.7,073
Rs.6,776 Rs.28,028
Rs.34,289
8.4 Milestones (Action Program) SAS TECH has several milestones, presented in the following table and chart, which will be instrumental in the success of the organization.
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Milestones Milestone
Start Date
End Date
Budget
Manager
Business plan completion
1/1/2004
2/15/2004
Rs.0
Sue
Beta version completed
2/1/2004
4/15/2004
Rs.0
ABC
Programming
3/15/2004
5/1/2004
Rs.0
Sue
HR
Public release of software
4/15/2004
5/15/2004
Rs.0
ABC
Programming
Profitability
5/15/2004
5/30/2005
Rs.0
Sue
Accounting
Organizational hiring complete
Totals
Department Busines Development
Rs.0
9-Web Plan Summary SAS TECH will develop a website that will be used as both a marketing and sales tool. On the site interested parties can receive more information regarding the company and
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the current product list. Once the beta version of the software is ready interested customers can download a trial version of the software for their evaluation. The website will also provide people with company contact information to allow them to ask any questions that they may have. Online sales will be contracted to one of the third party Internet sales businesses, such as Yahoo! Shopping. The site will provide customers with a download only purchase option. 9.1 Website Marketing Strategy The website will be marketed using simple yet effective means. The first method is inclusion of the URL address in all promotional activities. This will be especially important because it will allow all interested parties to view screen shots of the software and download a trial version of the product. SAS TECH recognizes that no ad will be able to communicate everything; therefore SAS TECH will rely on the website to provide the additional information. The second marketing tool for the website will be comprehension search engine submission. The submission process will provide SAS TECH will many visitors to the website. This will be accomplished when an interested party searches on "autism software" or some other set of keywords. The search engine will then list a number of "hits" that correspond to the search terms. 9.2 Development Requirements SAS TECH will employ one computer science student for the design and development of the website. Development will occur concurrently with the development of the software. 9.1 Personnel Plan SAS TECH will require the following employees: •
Assistant to Manager will be doing a little of everything from HR to business development to product development to finance.
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Accounting- an accounting clerk will be hired.
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Software development- two employees will be in charge writing manuals, instructions, and product bug updates, and version upgrades.
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Marketing Sales- two employees will be hired to generate sales. 30
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Customer Service- two employees will be used to field any questions from customers or address any concerns/problems regarding orders as well technical difficulties.
Personnel Plan 2009
2010
2011
Sue
Rs.22,000 Rs.26,000 Rs.30,000
Accounting
Rs.16,200 Rs.21,600 Rs.21,600
Software Documentation Rs.19,800 Rs.26,400 Rs.26,400 Product Development Customer Service/ Tech Support Customer Service/ Tech Support
Rs.15,400 Rs.26,400 Rs.26,400 Rs.19,800 Rs.26,400 Rs.26,400 Rs.19,800 Rs.26,400 Rs.26,400
Marketing/ Sales
Rs.27,000 Rs.36,000 Rs.36,000
Marketing/ Sales
Rs.27,000 Rs.36,000 Rs.36,000
Total People Total payroll
8
8
8
Rs.167,000 Rs.225,200 Rs.229200
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Bibliography: Resources from where the primary research work is done http://www.pasha.org.pk/ IT professional of NADRA and Plexus (Pvt) Limited www.wikipedia.com
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