Business plan for Compass IT Consulting Services

It Consultancy Business Plan

For Compass it Consulting Services to attain its financial projections three core elements need to specifically be managed to their optimal levels of performance. First, the expertise of employees specifically relating to systems development, integration, and maintenance needs to be continually developed and strengthened. Second, existing client relationships and potential new ones must be cultivated, retained and grown to ensure the highest lifetime customer value possible. Third, ongoing and insightful financial management is critical for the viability of the consultancy as costs can escalate quickly depending on the needs of clients. Unlike manufacturing which has standard costs, consulting services have a high proportion of variable costs that fluctuate in response to the complexities of a project. At launch the company will offer the three services of SAP Integration Services, SAP Migration Services, and IPC Planning and Services.

General Company Description

The vision of Compass it Consulting Services is to deliver the most insightful analysis, recommendations and implementations to customers' integration challenges specifically on the SAP platform. The mission of the company is to be the most responsive and knowledgeable suppler of SAP integration expertise including NetWeaver planning, installation and support functions.

Products and Services

The three major services that Compass it Consulting Services will provide are as follows:

SAP Integration Services - as the SAP Enterprise Resource Planning (ERP) system and its associated suite of applications for CRM, Supply Chain Management, Supplier Relationship Management, and Service Lifecycle Management all have significantly large installed bases of customers globally, Compass it Consulting Services has significant growth potential in integrating third-party systems into these SAP ERP and associated application environments.

SAP Migration Services - Many of SAP's previous-generation ERP systems including R/2, R/3 and R/4 have over time become obsolete in terms of integration to Oracle, Sybase and other well-known databases. The SAP Migration Service delivers consulting on integration between legacy SAP ERP systems and the latest editions of databases available today.

IPC Planning and Services - the SAP Internet Pricing Configurator (IPC) is now the cornerstone of the MySAP product strategy, making the SAP Variant configurator increasingly obsolete. SAP customers who had relied on the Variant configurator to link their sales channels to manufacturing now must migrate to IPC, and that presents a very significant business opportunity to Compass it Consulting Services. The intent of IPC Planning and Services is to provide consulting and services to those Variant customers who want to retain their significant investments in code used to support the previous SAP configurator while migrating to the IPC to support MySAP application use.

Marketing Plan

Compass it Consulting Services is founded based on the many unmet consulting and integration needs of the SAP customer base globally.

SAP's dominance in the enterprise software arena globally is gaining momentum, making them a long-term influence on sales cycles for Compass it Consulting Services for years to come. Figure 1 shows distribution of product revenue for the worldwide software market. SAP has double the share of their nearest rival, Oracle, when both approaches to sizing the market are used.

SAP Market Share Analysis

As SAP continues gaining global momentum in their selected verticals their accumulated market share, their share relative to Oracle, Siebel and Microsoft in enterprise software continues to show growth. Figure 2 shows a comparison of Global Peer Group Shares vs. U.S. Peer Group Shares.

There are global opportunities for Compass it Consulting Services in providing consulting and integration services for the SAP customers, as Figure 3, SAP's Market Share by Region illustrates. Compass it Consulting Services cannot just think about the U.S. market - there are significant opportunities globally for the services proposed.

Target Market Description, Size and Growth Trends

Core business applications generated $30bn in worldwide revenue in 2004, with SAP claiming the leadership position. By 2010, an additional $40bn in Total Addressable Market gets created through organic growth of SAP NetWeaver, mid-market, industry vertical marketing and Small and Medium Business (SMB) programs. Figure 5, Global Available Market Sizing, shows how significant organic growth is projected to impact the global total addressable market.

Global Available Market Sizing (SAP, AMR Research)

Customer Wants and Needs

Compass it Consulting Services focus' needs to be on the many unmet needs for integration specifically in the processes that manufacturers rely on. SAP's solutions roadmap is shown in Figure 8. In this workflow created by SAP, it is clear that in each step of the process from designing, to selling and finally servicing products the high levels of integration required. At each of the specific system integration points there are issues of legacy data and application support, integration to emerging best-of-breed systems and processes, and support for legacy R/2, R/3 and R/4 ERP systems. Clearly the opportunities from a systematic view of the SAP process workflows in manufacturers' shows significant potential for Compass it Consulting Services.

Figure 8 Industrial Manufacturer's Solution Map (SAP)

Financial Analysis of Compass it Consulting Services

Years ending Mar

Act/Est

Proj

Sales

Gross margin

Operating expenses

Income from operations

Net income before taxes

Net cashflow

Cash balance (deficit)

Total assets

These ratios are based on a combination of monthly/quarterly/annual values

Peak debt as % equity

Lowest current asset ratio (times)

Peak sales/total assets (times)

Net income before taxes as % total assets

Gross margin (as % sales)

Net income before taxes (as % sales)

For ease of reading and further analysis, included in the attached Microsoft Excel file are the following tables by tab in the file:

Financial Summary

12-Month Performance Review

Year Performance review

Balance Sheets by Quarter and Year

Income Statements by Quarter and Year

Cash Flow Statements by Quarter and Year

Global Peer Group Shares vs. U.S. Peer Group Shares

SAP Annual Report, SEC. (AMR Research)