Assignment 1 - Fall 2008
Investigation on Software Product & Services in a Software Company in business for more than five years in Bangladesh
Software Marketing
SEN 650
S.M. Saiful Islam ID # 0712004 Program – M.Sc. in SE
October 13, 2008
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1. INTRODUCTION............................................................................................................................. 3 1.1 ASSIGNMENT REQUIREMENT ........................................................................................................ 3 1.2 MATERIALS AND METHODS .......................................................................................................... 4 2. DESCRIPTION OF THE COMPANY ........................................................................................... 4 2.1 THE NAME & BRIEF PROFILE OF THE COMPANY ............................................................................ 4 2.2 THE SERVICE FOCUS OF SMARTSOFT®.......................................................................................... 4 2.3 THE PRODUCT FOCUS OF SMARTSOFT® ........................................................................................ 5 2.4 THE CLIENTS & PROJECTS OF SMARTSOFT® ................................................................................. 5 3. SELECTION OF PRODUCT AND SERVICES FOR INVESTIGATION ................................ 6 4. PRODUCT AND SERVICES DELIVERY INFORMATION ..................................................... 7 4.1 PRODUCT DELIVERY DATA ........................................................................................................... 7 4.2 SERVICE DELIVERY DATA............................................................................................................. 8 5. ANALYSIS OF ADOPTION PATTERN AND PRODUCT MATURITY.................................. 8 5.1 PRODUCT - ASSET.......................................................................................................................... 8 5.2 PRODUCT - BENIPACK ................................................................................................................. 10 5.3 SERVICE – E-GOVERNANCE IT SOLUTIONS PROVIDER ............................................................... 12 5.4 SERVICE – ENGINEERING/SCIENTIFIC IT SOLUTIONS PROVIDER ................................................ 13 6. INTELLECTUAL ASSETS OF SMARTSOFT® ......................................................................... 15
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1. Introduction
1.1 Assignment Requirement
Take a software company known to you which is in business for more than five years in Bangladesh. Perform following investigation on this company: Analyze its history of products/services delivery over last 5 years period following innovation S curve. Comment on adoption, maturity and decline of unit cost of its products/services. What are intellectual assets developed during this period? What are past, present, and potential strategies for deriving value from these assets? Recommended template: 1. Name of the company and brief profile 2. Selection of key products and services for investigation 3. Complete following table for each product/service. Name of the product or service: Years Staff Months engaged Revenue Cost as % of revenue Additional, new clients Total Clients Prospective clients
4. Analysis of adoption pattern and product maturity according to S-Curve 5. Perform analysis on intellectual assets according to the following template: List of assets Development history Cost of development Past value generation from the assets Current value generation from the assets Future value generation prospect from the assets
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1.2 Materials and Methods
As per the requirement of the project I needed to choose a company which is running more than 5 years in Bangladesh, which is known to me and in which I have some degree of access to the Company information. For meeting these assignment requirements, I have chosen my previous company – SmartSoft® (www.SmartSoft-bd.com) where I worked for several years, and have some ex-colleagues working over there. The information which this assignment sought for, was considered as trade secret by the top management, and did not disclose any information regarding its product/services and its revenue generation. Therefore, it was a difficult assignment to bring out the real picture of the company. I, therefore, as an alternate approach, contacted few of my ex-colleagues and managed to conduct meeting to have an idea about product/services & revenue generation of the company. Before that, I did some ground work studying company’s website and publicly disclosed information and made some information record sheet and questionnaire for recording information form my ex-colleagues. This document has been prepared based on the information I managed to obtain from my ex-colleagues having informal discussion.
2. Description of the company
2.1 The name & brief profile of the company
The SmartSoft® Systems Bangladesh Limited (www.SmartSoft-bd.com) is the pioneering software company in Bangladesh that offers software design, development, testing and implementation services. SmartSoft® Systems Bangladesh Limited is incorporated under The Companies Act XVIII of 1994. From the beginning of its outset, SmartSoft® has taken up different assignments in database programming, systems integration, creation of multimedia products, Website design & development and networking through LAN/WAN, dial-up remote access connectivity. The organization has emerged as a system integrator with a vision to develop customized and tailor made software and also to create product based development job for domestic and international markets. Since its inception the organization has grown moderately into a large-sized organization employing professionals from diverse academic background. SmartSoft® has a set of experts who have proficiency in large-scale distributed software development, database, website and multimedia software. The IT professionals of the organization have a combination of educational qualification and years of experience in the field of Information Technology. With latest in-house equipment facilities, resources and project management skills, the organization has the capability to undertake large ‘Turn-key’ software development project, information needs, design, development and implementation of distribution data environment comprising of heterogeneous hardware. Abdul Mannan, the founder & the Managing Director, has been leading the SmartSoft® and playing an important role on exploring markets for software exports. His keen effort earned SmartSoft to joint-venture contracts with eVastra Corporation, USA, CSB GmbH, Germany, TUV of Germany, NEO Global Business Solutions, UK, Primrose Group of Companies, USA, business partnership contract with TEMENOS, Switzerland. His dynamic marketing skills and wide contacts have earned SmartSoft a number of overseas contracts. He paved the way in forming joint venture IT firms, namely PyxisNet, SmartSoft-ITSL, Gensoft, expanding the horizon of SmartSoft®.
2.2 The Service Focus of SmartSoft®
The SmartSoft® does not have any specific service focus. It serves from local governments to industrial giants. It offers almost all type of software development as customers’ requirement. As one of the pioneer software development firm of Bangladesh, it has the experience to deal with the largescale custom software for various institutes. SmartSoft customers include health care, engineering/construction firms & owner/operators,
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manufacturers, utility & communications companies, military & intelligence agencies, electricity production and distribution, sea port, finance & banking and many more.
2.3 The Product Focus of SmartSoft®
From the very beginning of SmartSoft®, it started product development for different sector of the Market including Garments, Hospital, Library, Accounting, Inventory, etc. But most of them turned to failed in course of time. However, SmartSoft® has developed some products which have become really successful and has huge market potential. Following are the list of prime potential products of SmartSoft®:
Office360º Collaborative Workflow Management Solution Asset For Fixed Asset Management and Control Benipack For Employees Benefit Package
SmartTouch Complete Restaurant Management System DSRetail Comprehensive Retail Shop Management System for superstore chains, retail shops. Microfin360º Microfin360º product has developed for Micro Finance Organization
2.4 The Clients & projects of SmartSoft®
The SmartSoft® has worked for many local and international clients over the last 10 years from its inception. Many of the projects have become quiet successful and some are not. Following are the list of some successful clients and projects of the SmartSoft®: 1. Chittagong Custom House Automation Project, Bangladesh 2. Air Defense Artillery Fire Control Simulator System (ADAFCSS) 3. Management Information System (MIS) for RAJUK, Bangladesh. 4. Credit Bureau Database (CBDB) for Palli-Karma Sahayak Foundation (PKSF) 5. Management Information System (MIS) for Rajshahi City Corporation, Bangladesh 6. Meteorological Data Acquisition Sub System, Bangladesh
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7. DataSwitch (Enhancement of some features) for Cell Exchange (USA) 8. HRMCS for COVANTA Bangladesh Operating Ltd. 9. Integrated Soil Fertility and Fertilizer Management Project (SFFP) for Ministry of Agriculture, Bangladesh 10. Field Demonstration System for Ministry of Agriculture, Bangladesh 11. Anderson Zaks Limited, England 12. Online Research Library, Center for Policy Dialogue
3. Selection of Product and Services for Investigation
The SmartSoft® is one of the pioneer full-fledged software companies in Bangladesh. It has long history of making many products like DS Garments, DS Library, DS Hospital, DS Diagnostic, DS Accounting, DS Payroll, etc. but most them were unsuccessful and have been shut down in the last couple of years. Those products took huge investments of time and resources and incurred huge loss and liability to the company. Despite these failures SmartSoft® has become really successful in making the following two products. Therefore, I have selected these products for investigation.
Asset For Fixed Asset Management and Control. Asset ‘Fixed Asset Register (FAR)’ is a total solution for the fixed asset management of an enterprise. Asset is used to register and handle all fixed assets of an organization including all depreciation and/or appreciation calculation based on world standard methods where history of all assets is permanently recorded. The big clients of this product includes City Cell, Eastern Bank Ltd, Mercantile Bank Ltd, AB Bank Ltd, etc. Benipack For Employees Benefit Package. In Benipack, Gratuity and Provident accounts of the employees can be kept. In this software the calculation of employees Gratuity and PF account is conducted automatically based on the world standard methods. Better service with high accuracy. Saves huge time and manpower for maintaining GR and PF accounts in the large organizations. The big clients of this product includes Grameen Telecom, BTRC, etc.
In addition to making products SmartSoft® has become quiet successful providing E-Governance IT solutions. It has completed several big projects of Bangladesh Government. Besides these EGovernance Project, SmartSoft® has also become quiet successful in making Engineering Projects. Therefore, I have selected E-Governance IT Solutions and Engineering IT Solutions providing services for investigation. Following are some big E-Governance and Engineering Projects which were developed by SmartSoft®. 1. Management Information System (MIS) for RAJUK, Bangladesh. (Worth – 11,500,000/BDT) 2. Credit Bureau Database (CBDB) for Palli-Karma Sahayak Foundation (PKSF). (Worth –
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7,800,000/- BDT) 3. Management Information System (MIS) for Rajshahi City Corporation, Bangladesh. (Worth – 4,500,000/- BDT) 4. Chittagong Custom House Automation Project, Bangladesh. (Projected Worth 20,000,000/BDT Per Year) 5. Meteorological Data Acquisition Sub System, Bangladesh. (Worth 1,300,000/- BDT) 6. Air Defense Artillery Fire Control Simulator System (ADAFCSS), Bangladesh. (Worth 3,300,000/- BDT) These selected products and services have detailed in the following sections following recommended templates.
4. Product and Services Delivery Information
4.1 Product Delivery Data
Table 1 : Data on Product ’Asset’
Name of the product or service: Asset
Years Staff Months engaged 30 8 6 10 4 4 Revenue (BDT) 300,000/400,000/1,000,000/500,000/1,500,000/Cost as % of revenue Additional, new clients Total Clients 3 8 16 21 31 Prospective clients 5 10 12 20 25 30
2003 2004 2005 2006 2007 2008
100% 80% 3 60% 5 45% 8 30% 5 13% 10
Table 2 : Data on Product ’Benipack’
Name of the product or service: Benipack
Years Staff Months engaged 40 4 4 5 4 Revenue (BDT) 300,000/500,000/1,000,000/900,000/Cost as % of revenue Additional, new clients Total Clients 1 3 8 10 Prospective clients 2 3 7 5 10
2004 2005 2006 2007 2008
100% 50% 1 40% 2 20% 5 18% 2
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4.2 Service Delivery Data
Table 3 : Data on ’E-Governance IT Solutions Providing Service’
Name of the product or service: E-Governance IT Solutions
Years Staff Months engaged 240 350 340 280 290 Revenue (BDT) 9,000,000/13,000,000/8,500,000/9,500,000/15,000,000/Cost as % of revenue Additional, new clients Total Clients 3 5 7 10 13 Prospective clients 4 3 4 5 5
2004 2005 2006 2007 2008
80% 2 70% 2 95% 2 73% 3 60% 4
Table 4 : Data on ’Engineering IT Solutions Providing Service’
Name of the product or service: Engineering IT Solutions
Years Staff Months engaged 150 50 40 140 230 Revenue (BDT) 1,300,000/4,000,000/3,500,000/1,500,000/3,300,000/Cost as % of revenue Additional, new clients Total Clients 2 3 4 6 8 Prospective clients 3 3 4 5 4
2004 2005 2006 2007 2008
45% 1 60% 1 40% 1 50% 2 35% 2
5. Analysis of adoption pattern and product maturity
5.1 Product - Asset
The ‘Asset’ has been developed doing very good market research engaging professionals. SmartSoft started the targeting some innovator client. Gradually it moved towards early adopters group of customers. At present, the product is in early adaptation stage. There are not many similar products in market yet. It is enjoying good advantage over other similar products in the market. The Figure 1-A depicts the innovation S curve for Asset. This curve depicts the growth trend of this product.
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Innovation S Curve for Asset
Number of Adopted Client 15 10 Client 5 0 2002
2004
2006
2008
2010
Year of Adoption
Figure 1-A: Innovation S Curve for Asset The Figure 1-B depicts the innovation S curve for Asset relating with the market adoption process. This diagram depicts the market adoption trend of this product. Here, it is shown that, the product has been started targeting the innovator clients and gradually moved towards the Early Adopters.
Figure 1-B: Innovation S Curve for Asset along with IT Adoption Process The Figure 2 depicts the product maturity and cost declining trend. Over the last few years the product has become mature enough. Now it is passing through the technology improvement stage. It is becoming a very viable product for SmartSoft® as revenue is increasing continuously and at the same time cost as percentage of revenue is falling gradually. This product will enter into the mass market in next couple of years. The innovation S curve and revenue curves are not very ideal here. The reason behind this is, there was serious resource crisis and management problem in this period. Therefore, it could not catch all the prospective clients this time and the revenue significantly fall. That is actually not the market reflection, the potential clients were there, but SmartSoft could not catch the prospective clients due to its internal problem. But, in the next year, it has recovered its problem, and managed to catch its expected clients and hence revenue generation.
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Product Maturity and Decline of Cost for Asset
Revenue (x 1000) BDT VS Cost as % of Revenue 1600 1400 1200 1000 800 600 400 200 0 300 400 500 1000 1500
100 80 60 45 30 13 0 2003 2004 2005 2006 2007 2008 Year Revenue Cost as % of Revenue
Figure 2: Product Maturity and Decline of Cost of Production for Asset
5.2 Product - Benipack
The ‘Benipack’ has been also developed doing very good market research engaging professionals. SmartSoft started the targeting some innovator client. Gradually it moved towards early adopters group of customers. At present, the product is in early adaptation stage. There are not similar products in market yet. It is enjoying currently monopoly in the market segment. But the market adoption for this product is very slow. The Figure 3-A depicts the innovation S curve for Benipack. This curve depicts the growth trend of this product.
Innovation S Curve for Benipack
Number of Adopted Client 6 4 Client 2 0 2002
2004
2006
2008
2010
Year of Adoption
Figure 3-A: Innovation S Curve for Benipack
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The Figure 3-B depicts the innovation S curve for Benipack relating with the market adoption process. This diagram depicts the market adoption trend of this product. Here, it is shown that, the product has been started targeting the innovator clients and gradually moved towards the Early Adopters.
Figure 3-B: Innovation S Curve for Benipack along with IT adoption Process The Figure 4 depicts the product maturity and cost declining trend. Over the last few years the product has become mature enough. It has becoming also a very viable product for SmartSoft® as revenue is increasing continuously and at the same time cost as percentage of revenue is falling constantly. This product will also enter into the mass market adoption stage in next couple of years.
Product Maturity and Decline of Cost for Benipack
Revenue (x 1000) BDT VS Cost as % of Revenue 1200 1000 800 600 500 400 300 200 0 100 0 2004 50 2005 40 2006 Year 20 2007 18 2008 1000 900
Revenue
Cost as % of Revenue
Figure 4: Product Maturity and Decline of Cost of Production for Benipack
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The innovation S curve and revenue curves are not very ideal here. There is a significant fall of catching the prospective client and revenue generation in the current year. This is not actually reflecting the market trend. The reason behind this is, there is serious resource crisis and management problem in the company now. The main marketing person who was responsible for this product stopped in SmartSoft recently and several deals were half way. Probably, it can be able to finalize those deals by the end of this year. So, here the trend is abnormal and not reflecting the potential market.
5.3 Service – E-Governance IT Solutions Provider
The SmartSoft has become one of the competent E-Governance Solutions providers in the Country. Every year it is getting big budget E-Governance Project. Gradually, its revenue is increasing. However, the cost is not falling remarkably. This sector is still in early adaptation stage. Though the prospect of this service is very high, when this will enter into the mass adoption stage no body knows. The Figure 5-A depicts the innovation S curve for E-Governance IT Solutions service. The SmartSoft® is steadily progressing in this sector as there is lot of competitor in the Market in this sector. The following curve depicts the grow trend of this service.
Innovation S Curve E-Governance IT Solutions
Number of Adopted Client 6 4 2 0 2002
Client
2004
2006
2008
2010
Year of Adoption
Figure 5-A: Innovation S Curve for E-Governance IT Solutions The Figure 5-B depicts the innovation S curve for E-Governance IT Solutions service associating with E-Governance adoption process. Here, it is showing that the SmartSoft is providing E-Governance Solutions to the Early Adopters.
Figure 5-B: Innovation S Curve for E-Governance IT Solutions along with IT adoption process
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The Figure 6 depicts the service maturity and cost declining trend. Over the last few years the revenue of SmartSoft® has increased significantly. But, the SmartSoft® could not become mature enough to reduce the cost as percentage of revenue. The cost as percentage of revenue is not significantly falling. If it can not make significant improvement in reducing cost as percentage of revenue, then it will not be able to offer competitive price to market and has high risk to loose the market and face the difficulty for growth and survival.
Product Maturity and Decline of Cost for E-Governance IT Solutions
Revenue (x 10000) BDT VS Cost as % of Revenue 1600 1400 1200 1000 800 600 400 200 0 80 2004 70 2005 95 2006 Year Revenue Cost as % of Revenue 73 2007 60 2008 900 1300 950 1500
850
Figure 6: Product Maturity and Decline of Cost of Production for E-Governance IT Solutions The Revenue generation has been fallen significantly in the year 2006 and 2007. This was due to internal resource scarcity and management problem. During this period, many efficient resources both from development and marketing had been left. That affected the company seriously. However, this year it has managed got back to track and earned significant amount of revenue. The cost as percentage of revenue is not decreasing as ideal, as because the operating cost is also increasing significantly and it is fluctuating. Now, the company is seriously trying to capitalize its intellectual assets for reducing cost of delivery significantly and constantly. However, the last two yeas trend is positive and if can be maintained, then it can be competitive in the market place. There is lot of vendors, who provide the E-Governance Solutions to local market. Therefore, the competitive advantage is very crucial for survival and growth in this market segment.
5.4 Service – Engineering/Scientific IT Solutions Provider
The SmartSoft is providing Engineering/Scientific IT Solutions to the different organizations. In this sector it is doing well and making significant revenues. This is still in early adoption stage. The prospect of this service is not limited. There is not yet good possibility in near future to enter into the mass adoption stage of this service. The SmartSoft® is doing quiet good in this sector as there are not many competitors in this Market segment yet.
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The Figure 7-A depicts the innovation S curve for Science & Engineering IT Solutions service.
Innovation S Curve for Engineering IT Solutions
Number of Adopted Client 3 2 1 0 2002
Client
2004
2006
2008
2010
Year of Adoption
Figure 7-A: Innovation S Curve for E-Governance IT Solutions The Figure 7-B depicts the innovation S curve for Engineering IT Solutions service associating with Engineering IT Solutions adoption process. Here, it is showing that the SmartSoft is providing Engineering IT Solutions to the Early Adopters and gradually it is moving towards mass market adoption.
Figure 7-B: Innovation S Curve for E-Governance IT Solutions along with IT adoption process The Figure 8 depicts the service maturity and cost declining trend. Over the last few years the revenue of SmartSoft® has increased significantly. But, the SmartSoft® could not become mature enough to reduce the cost as percentage of revenue continuously. It is enjoying low cost as percentage of revenue in this sector from the very beginning. This is not, as because SmartSoft® is doing this efficiently, rather it managed to get the contracts in high price. But, this will not happen always. The cost as percentage of revenue should be falling in course of time. If it can not make significant improvement in reducing cost as percentage of revenue, then it will not be able to offer competitive price to market and has high risk to loose the market.
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Product Maturity and Decline of Cost for Engineering IT Solutions
450 400 350 300 250 200 150 100 50 0 2004 2005 2006 Year Revenue Cost as % of Revenue 2007 2008 45 60 40 50 35 130 150 400 350 330
Figure 8: Product Maturity and Decline of Cost of Production for Engineering IT Solutions
6. Intellectual Assets of SmartSoft®
The SmartSoft® is operating over the last 10 years in the country as one of the top ranking Software Solutions Providers. However, the SmartSoft® earlier (before-2003/2004) was not very much aware of intellectual property. But in 2003-2004, it started developing and nurturing its intellectual assets. For that purpose it spent quiet a huge amount of money. That time it formed a group named Common Services Group (CSG) for identifying and developing reusable components and services. Getting inspired of the CSG, it also formed another body SmartSoft Process Standardization Group (DPSG) for defining and documenting standards, procedures and methodology for in-house development. During this period it also started to develop some unique products and got some Copyrights. In addition to develop products, it concentrated on marketing strength development. During this period, it developed a strong marketing team and developed high standards marketing and technical documents for procuring E-Governance and large scale enterprise projects. Following table detailed these intellectual assets. The figures provided bellow is assumptions made in a group discussion held with two SmartSoft employees, based on the past projects and future prospects, not actual.
Revenue(X 10000) BDT VS Cost as % of Revenue
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Table 5: Intellectual Assets of SmartSoft® List of assets Development history Cost of developme nt (BDT) Past value generation from the assets (BDT) Copyright Product SmartSoft has several Copyrighted products like Asset, Benipack, SmartTouch, etc. This product development started in 2000-2001. SmartSoft developed several libraries, utilities, controls and frameworks during the period 2002-2005. These reusable components have been used in different project deliveries which are reducing time and complexity of the project. SmartSoft developed different common standards, procedures and methodology for unified design and coding during period 2003-2004. These have been very useful over the last couple of years for the development. These significantly helped the new developers to take up the task very quickly and contribute to the team. SmartSoft has built up very good domain knowledge in different business domain including EGovernance, Finance, E-Commerce etc during the last couple of years. 3,000,000/5,000,000/Current value generation from the assets (BDT) 2,500,000/Future value generation prospect from the assets (BDT) 50,000,000/-
Common Services Library – Reusable Components (programs)
1,000,000/-
3,000,000/-
1,000,000/-
5,000,000/-
Standards, Procedures, Methodology
500,000/-
2,000,000/-
500,000/-
5,000,000/-
Domain Knowledge
1,000,000/-
3,000,000/-
1,000,000/-
5,000,000/-
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List of assets
Development history
Cost of developme nt (BDT)
Past value generation from the assets (BDT)
Current value generation from the assets (BDT)
Future value generation prospect from the assets (BDT) 5,000,000/-
Technical Know How
SmartSoft has built up a very good technical Skill Matrix. It has different platform specialization. Capitalizing this skill matrix it is securing different projects though it is not the lowest bidder always. SmartSoft developed quiet high standard of proposal and technical documents for Government and Large Enterprises Projects over the last couple of years using experts. These documents are giving SmartSoft competitive advantage in procuring the contracts from open bidding projects.
1,000,000/-
3,000,000/-
1,000,000/-
Documents
500,000/-
5,000,000/-
1,000,000/-
10,000,000/-
Capitalizing these intellectual assets, SmartSoft® is securing the very big the projects from the competitive local markets, delivering the projects in faster manner maintaining at least the minimum standard quality and reducing the development cost. The SmartSoft® has recently got several big contracts and secured continuous cash flow. The Chittagong Customs Automation is the most successful project for SmartSoft®. It is expected that it will earn huge revenue from this project. The SmartSoft® had huge job cut in 2006-2007. During this period, it reduced its operating cost more than 50% running company with low paid new and inexperience resources. But still it is doing well and getting and delivering big projects. Here, the intellectual assets those were mostly developed during 2003-2005 helped a lot. The SmartSoft has recently planned to enrich its intellectual assets and capitalized those as much as possible to attain competitive advantage in the local market. This company is standardizing its development, organization, marketing and management processes. It is working for upgrading itself to the CMMI level -3 soon. It is hoping that, doing so, it will be more competitive in local market and as well as in the international market in terms price, quality and delivery time.
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