Business Plan for A Software Quality Assurance Company - PowerPoint

							QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
                                          ASSURANCE
STS QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE
 ASSUR        QUALITY ASSURANCE SPECI          QUALITY ASSURA
ASSURANCE                                                LISTS Q
 SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUA ITY ASSURANCE
QUALITY                                                CE SPECIA
 ASSURANCE                                            ECIALISTS
SPECIALISTS                                       UALITY ASSU
 QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
                                                SPECIALISTS
CE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE
     Business Plan for a New Software
       Quality Assurance Company

                               28 August 2005


The information provided in this business plan is confidential. Please do
   not disclose it to anyone without checking with us first. Thanks.

                 Innofy Software Labs: Quality Assurance Specialists
              Personal Goal

 To build an effective and lasting software
  quality-assurance organization

 To found it on a set of shared professional
  and social values




      Innofy Software Labs: Quality Assurance Specialists
                             Values
  Make & meet commitments
  Recognize accomplishment             Improve continuously
  Communicate without fear             Teach & learn from each
                                         other
 Play to win-win                       Act with a sense of urgency
 Require quality beyond
  customer expectations           Think & act like an owner
 Deliver more than what          Keep a balance in your life
  was promised                    Have fun
                                  Give back to the community


            Innofy Software Labs: Quality Assurance Specialists
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
                  Innofy Software Labs
                   Quality Assurance Specialists

      A provider of quality assurance services that cover
       the complete software life-cycle

      Focused on the financial and telecom domains

      Headquartered in Dubai, Innofy will have sales
       and support offices in Singapore, Washington and
       London, and engineering centers in Dubai,
       Lahore, Karachi and Islamabad
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                                Mission

           Planned and sustained growth in:

                      Number of professionals
                               Revenue per professional
                                       Profits per professional


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                                Mission

       Build lasting relationships with our clients
       by consistently exceeding their expectations




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                        Key Objectives

                                          1st Year             5th Year
   Number of Professionals    50          800
   Revenue                 US$630,000 US$47,430,000




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                                Strategy
                    Sell to Asian operations of US businesses;
Sales
                    Leverage them to get work from their parents
Domain              Focus on no more than two biz domains

Cultural focus Speed through innovation; Craftsmanship

HR retention        Ensure prof. growth; Share ownership

HR growth           Separate training institute; Dubai center

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                             Main Risks

     Short Term Sales
     Long Term Growth in the number of professionals




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
                   Functional Structure

          Corporate                  Lahore               Singapore


             Dubai                  Institute            Washington


            London                Islamabad                 Karachi

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
      Growth in the No. of Professionals
                           1st Year   2nd Year   3rd Year   4th Year   5th Year
              Corporate        3          4          6          8         10
Engineering   Lahore         42          96        169        317        490
   Sales &
   Support    Singapore       2           3          4          5          5
   Sales &
   Support    Washington      3          10         20         30         40
Engineering   Dubai           -          15         35         45         50
   Sales &
   Support    London          -           2          3          4          5
Engineering   Islamabad       -           -         25         60        100
Engineering   Karachi         -           -          -         45        100
              Total          50         130        262        513        800
              Institute       5           8         11         14         17
                         Legal Structure

               The Innofy family will consist of six
                sister companies: Two registered in
                Pakistan; One each in Singapore,
                US, UAE and the UK

               Initially, all six will have the same
                Board of Directors


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                     Start-Up Expenses

     Total start-up expenses (for the Corporate, Lahore
     engineering center, and the Singapore and
     Washington sales and support offices) for the 1st
     year, including:
          Short-term assets (computers, UPSes, generators,
           furniture, etc.)
          Cash required to handle the operations
                                                          US$1,362,000
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
                    Service Description

             We will provide quality assurance services
              covering the complete software life-cycle

             Our distinguishing feature will be the rapid
              pace of our assurance process

             We will focus on the financial & telecom
              services’ domains

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
          Verification, then Validation

      The focus during the first three years of operation
       will be on verification, i.e. testing a design against
       specifications, testing code against design, etc.

      Starting in the 4th year, activities related to
       validation, i.e. testing against operational goals,
       will commence



Summary … Company … Services … Market Analysis … Strategy … Management … Financials
 Request for proposal QA
 Software supplier capability assessment
 Requirements & specifications document QA
 User’s manual QA
        Operation & maintenance manual QA
        Software development plan QA
        Acceptance testing document QA
        Test plan QA
                 System architecture document QA
                 Detailed design document QA
                 Coding standards QA
                 Design compliance QA
List of                  Black-, gray-, white-box testing
                         Automated testing
Services                 Load testing
                         Integration testing
           Competitive Comparison (1)

 The competition comes in several forms:

  No competition at all:

      –   In-house SQA team
      –   Most significant
      –   Disadvantages: Inefficiency; High employee turn-over
      –   Our advantages: Focus; Speed; Cost; Long-term support

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
          Competitive Comparison (2)

      Large, international SQA companies:

         – Disadvantages: Generalists; They drive their clients;
           Cost; Lack of innovation
         – Our advantages: Specialists; Innovative solutions;
           Speed; Fixed-cost




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
          Competitive Comparison (3)

      Off-shore SQA Companies

         – Not many, yet!
         – Low cost
         – Disadvantages: Inefficient; Unfocused; Lack of
           domain knowledge; Weak marketing
         – Our advantages: Domain focus; Professional service;
           On-site presence; Methodology fine-tuned for speed;
           Partnerships with established players

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                     Sales Supplements


                    The business will begin with a
                    corporate Website establishing
                    the positioning, followed by a
                    printed brochure




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
    The Worldwide SQA Opportunity
          Annual world-wide spending on software is
           approaching a trillion dollars

          The developer to SQA-engineer ratio in
           reasonable software development
           organizations ranges from 3:1 to 1:2

          Estimate of the SQA component of software
           development spending: $300 billion

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                               Summary
       We will be focusing on small to medium sized
        projects

       We will be targeting businesses that are in a hurry
        (2-10 week turnaround time) to get the quality of
        their (or their client’s) software assured

       Our focus will be on software systems for the
        financial and telecom sectors

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                  Market Segmentation

        Software Developer                 Software User
        Organizations                      Organizations
           Organizations                       Organizations
           looking for                         looking for third
           assistance in getting               parties to assist
           the quality of the                  them in getting
           software they are                   software of high
           developing assured                  quality developed
           according to world-
           class standards

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
    SQA in Pakistan: The Opportunity




Summary … Company … Services … Market Analysis … Strategy … Management … Financials
        SQA in Pakistan: 2002 Survey

                           Number of    Number of
                                                    Deficit*
                           Developers SQA-Engineers

  Survey sample                 394                  74                 57

  Estimate for the
                               5000                 939                728
  whole country
 * With respect to a suggested developer-to-SQA-engineer ratio of 3:1


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
    SQA in Pakistan: The Opportunity
      There is a clear deficit, widening at a rate greater
       than the rate of growth of the industry

      The deficit has resulted in an industry-wide
       weakness in quality, and correspondingly, rates

      The local software export companies will very
       much appreciate any effort that can help them
       improve their rates

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
               Distributing Our Service
           Through the                        Through On-Site
           Internet                           Presence
              Software-to-be-                    Our highly-trained
              assured will be                    professionals will
              delivered to one of                move to the client’s
              our engineering                    premise and assure
              centers through the                the quality of the
              Internet, and the                  software by
              results will be                    following Innofy’s
              delivered through                  high-performance
              the same channel                   methodology
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
                         Why Pakistan?
  Majority of SQA activities require little knowledge of
   software development expertise

  The key requirements for that majority are analytical
   skills and domain knowledge

  Innofy will hire persons with superior analytical
   abilities and domain knowledge in her focus areas from
   the engineering, banking and finance professions.
   Pakistani institutions possesses a record of producing
   professionals of high-quality in these disciplines
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                   Selling Our Services
      Our services will be sold and purchased mainly on
       a word-of-mouth basis, with relationships and past
       experience being the important factors

      The key to a favorable decisions made by our
       initial clients and partners will be the trust in the
       international experience, professional reputation
       and academic qualifications of our executive team


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                          Sales Strategy
      Innofy will start its sales effort first in Singapore,
       and then in Washington

      The focus in Singapore will be on getting projects
       through established international players

      The emphasis in Washington will be on leveraging
       those initial partnerships

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                   Certification Targets

                           Year Certification
                              1      ISO9000
                              3      CMM Level 3
                              4      CMM Level 4
                              5      CMM Level 5


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
    Revenue Growth                            The key corporate
                                               goal of Innofy is to
    Targets for Revenue-per-Pakistan-          systematically
    Based SQA-Engineer (1000xUS$)              increase the overall
                                               per-SQA-engineer
                                   +10%        productivity
    60                      +20%
                     +30%
                                              An advantage of
    40        +20%
                                               working in partnership
    20
                                               with established
                                               players is that our
     0                                         rates can be the same
          1     2      3     4      5          as those for their
              Year of Operation                in-house engineers
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                               Revenue Forecast
                          50


                          40
            Million US$




                          30


                          20


                          10


                          0
                               1   2           3         4    5
                                       Year of Operation

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
            Exit Strategy
• Listing on the Karachi Stock
  Exchange/Regional Exchanges/Nasdaq
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
               Organizational Structure

    The company will start with 3 key executives:

         CEO
         CTO
         CMSO

    They will have a high level of international experience,
    excellent professional reputation and expertise in
    software development and quality assurance


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                 Overview
   Executive Summary
   Company Summary
   Services
   Market Analysis
   Strategy & Implementation
   Management
   Financial Info

    Innofy Software Labs: Quality Assurance Specialists
                                  Forecasts:
                           Costs, Revenue, Profits
                     50
                     40
       Million US$




                     30
                     20
                     10
                      0
                              1        2           3          4           5
                     -10
                                    Year of Operation

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
                            Investments
         1st Year                2nd Year                3rd Year
       US$1,362,000            US$2,117,000            US$1,381,000




               Returns Over Five Years
      NPV @ a discount rate of 17%                       US$4,395,000
      IRR                                                        55%

Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Start-up year’s                                                            The number of
ramp-up discount
is shown in italics
                      Financial Worksheet                                  professionals is
                                                                           shown in bold
                        All currency figures in Thousand US$
                1st Year       2nd Year         3rd Year              4th Year        5th Year
Revenue
Lahore     30x42x0.5 630 36x96      3,456 47x169     7,943   56x317     17,752   62x490 30,380
Dubai                    54x15x0.5    405 70x35      2,450   84x45       3,780   93x50    4,650
Islamabad                                 47x25x0.5    588   56x60       3,360   62x100 6,200
Karachi                                                      56x45x0.5   1,260   62x100 6,200
Total               630           3,861          10,981               26,152           47,430
Costs for the SQA-Engineering Workforce
Lahore     20x42x0.8 672 22x96      2,112 25x169     4,225   28x315      8,820   31x490 15,190
Dubai                    50x15x0.8    600 56x35      1,960   63x45       2,835   70x50    3,500
Islamabad                                 25x25x0.8    500   28x60       1,680   31x100 3,100
Karachi                                                      25x45x0.8     900   28x100 2,800
Total               672           2,712            6,685              14,235           24,590
Costs for the Sales and Support Workforce
Singapore 120x2      240 110x3        330 100x4        400   90x5          450 101x5    505
Washington 240x3     720 200x10     2,000 190x20     3,800   180x30      5,400 170x40 6,800
London                   200x2        400 190x3        570   180x4         720 170x5    850
Total               960           2,730            4,770               6,570         8,155
Costs for the Corporate Office
Corporate 120x3      360 134x4        536 151x6        906   169x8    1,352 189x10 1,890
Total               360             536              906            1,352          1,890
Profit           (1,362)        (2,117)          (1,381)            3,995         12,795
P/S               -216%            -55%             -13%              15%            27%
                                                             NPV @ 17%             4,395
                                                             IRR                     55%
                          Number of Professionals
                           Revenue/Professional
                            Profits/Professional

                    60
                                                                        800
                    40
     Thousand US$




                                                            513
                    20
                                               262
                           50      130
                     0
                           1        2            3          4           5
                    -20
                                                        Year of Operation
                    -40


Summary … Company … Services … Market Analysis … Strategy … Management … Financials
      Appendix: The Institute

 A for-profit organization - registered as a
  separate private limited company in Pakistan –
  focused on the training of SQA personnel

 Requires an initial investment of US$200,000




        Innofy Software Labs: Quality Assurance Specialists
                 Institute's Output


Program          1st Year 2nd Year 3rd Year   4th Year   5th Year
Short Courses
                  100       200       400       700       1000
(1-10 days)
Post-BSEngg
                   40       80        150       300        500
Diploma (6 mo)




                           Appendix                         Appendix