2. Strategic Restructuring RSMBA
Situation Analysis
Slowdown due to lack of new market focus and integration
Current Situation Challenges Solution Approach
Decreasing growth Identify focus segments
Back to double digit
Revenue growth Explore new markets
Decline of share price
Unsatisfied Recruit, motivate,
Partners Improve partnerships support and reward
No explicit policy partners
Unsatisfied Develop and implement Identify growth areas
Customers
Mostly enterprise new customer strategy Understand customer
Ad hoc sales Solution selling
Sales Process Understand customer industry
Increased competition Educate sales force
Industry Solution oriented
Products Product oriented
customization products
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 2
3. Strategic Restructuring RSMBA
Revised Strategy for GSG
Vision Increase share price
Business
Increase revenue growth to double digits
Objective
Proposition Focus on customer segments with low competition and high growth potential
Dual Focus
Strategy
Segment focus: SB & Mid-Market
Product focus: Solutions
Organizational restructuring Be the first to enter low
Industry expertise
Method competition and high growth
Solution selling Partners/Alliances market
Increased employee and Aggressive growth in SB & Mid-
Growth in all customer satisfaction Market segment
Expected
outcome segments Increased sales and new 25 % share in SB segment in 2009
accounts 20 % share in SB ERP in 2009
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 3
4. Strategic Restructuring RSMBA
Segment Focus : Grow in Small Business Segment
SB market is big, fast growing with increasing IT needs
GSG over relies on “Enterprise”
segment which drives growth slowdown
Enterprise 62,50%
Low Competition: companies have
Mid-Market 18,30% enterprise strategies but lack SB
strategies
GSG development toward SB would
Small Business 12,90% Revenue weight by
Revenue weight by
customer segment allow company to focus on SB & Mid-
customer segment
Market
Consumer 6,20%
Companies maturing their SB strategy
0% 10% 20% 30% 40% 50% 60% 70% will also be able to master their mid-
market strategy (mix enterprise and SB
Revenue-weight and growth rate of GSG total revenue, FY 2004
strategies)
Enterprise -3,60% Growth rate
Growth rate
Mid-Market -15,50% Focus on growth market
Focus on growth market
Small Business and Mid-Market
Small Business and Mid-Market
Small Business 18,80%
Consumer 15,30%
-20% -15% -10% -5% 0% 5% 10% 15% 20%
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 4
5. Strategic Restructuring RSMBA
Prioritization in Small Business segment
Prioritize SB industries on basis of potential and sales effort
Low Priority High
Total industry IT spend (billions $USD)
8
Business Service Manufacturing
7 Financial Service (Finance and Insurance)
- First target area
6 with both a high industry
Distribution (retail)
Average potential per industry =
Distribution (wholesale) and a single company
5 $3.57B
potential
- Following are
4 Health Care
area and areas,
Food and Accommodations Services Telecom and Utilities with a single high factor
3 Transportation
Average size per company = $5.94m - Strategic Alignment: GSG
Construction
2 Other Services
core competence & major
Financial Service (Real Estate and other)
SB Market, i.e. Financial
Agriculture and Resources Services
1 Education
Government - Set Business Services,
0 Manufacturing, Financial
0 10 20 30 40 50 Services and Telco
Estimated size of IT spend per company (millions $USD) verticals as priority
Source: Small Business IT send by industry vertical
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 5
6. Strategic Restructuring RSMBA
Product Focus : Grow in Solutions Long Term Focus
Long Term Focus
Opportunities in ERP/CRM market Focus on solutions
Focus on solutions
Product CAGR (2001-2004)
BSS and BIS have shown
significant growth BSS 67,87%
Industry standard product sales
{ BIS 12,34%
(UDS & PP) are stagnating in US
(saturated market)
2,99%
{
PP
UDS 2,99%
Total ERP market is $15 billion
SB ERP market is $5.3 billion 0% 10% 20% 30% 40% 50% 60% 70%
GSG only has small share Dual Focus UDS BIS
Gaining industry insight is key to PP BSS
significant growth in the ERP market
Enterprise Retain Grow
Seize opportunity in SB CRM market (5%)
Drag along to Mid-Market Grow
SB / Mid-Market Grow
Agressively
GSG should strive for significant SB ERP
market share by 2009 (20%) Consumers Retain N/A
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 6
7. Strategic Restructuring RSMBA
Key Success Factor: Partners!
Partners are indispensable to reach SB and solutions market efficiently
- Channel strategy is key to reach wide range of Small Business customers
- Recruit and attract partners: System Integrators, Resellers, IHVs and ISVs
- Partners have Industry expertise and ensure integration of products (turnkey solutions)
- Establish partner organization in GSG to cover partner needs, strengthen partner relations, review performance
CRM matrix for partners
High potential partners with high intimacy “defend strategy”
Size High potential partners with low intimacy “gain strategy”
Low potential partners with high intimacy “develop strategy”
Low potential partners with low intimacy “observe strategy”
Intimacy Enterprise >$500m
Account coverage Fulfullment Account types Discounts / incentives
GSG sales reps GSG Sales reps Installed Base 3% of order if channel
>$50m
fulfills Mid-market
Partners Partners New
<$500m
GSG sales reps 35%
Installed Base
Partners Partners Industry best partner
New
Joint sales approach service
40%
Small Business <$50m
Partners Installed Base
Partners Industry best partner 10-50 employees
Aggressive hunting New
service
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 7
8. Strategic Restructuring RSMBA
Changes in GSG organization structure are necessary
for increased partner focus, better industry knowledge,
industry solutions and better service and support
Industry focus is key to growth Enterprise SB Product
- Educate GSG Sales force
- Recruit, nurture, reward partners Mktg/Sales Mktg/Sales Marketing
- Provide turnkey industry solutions
- Actively gather feedback from
customers and partners (CRM)
Incentives/Discounts Incentives/Discounts Adequate feedback
3 new matrixed divisions
Partner Organization Joint selling Joint selling & support
Measure partners Measure partners
Industry expertise Industry expertise Industry feedback
Analyse requirements to development
Industry Solutions Support sales/partners
Complex sales Express products Express products
Analyze customer & Analyze customer & Feedback
Service & Support (CRM) partner requirements partner requiements Technical interlock
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 8
9. Strategic Restructuring RSMBA
New Sales and Marketing Process for GSG GSG
Integrate product and service development,
marketing, sales, partners and customer service
Enterprise
Enterprise
Customers
Sales
Create customer centric culture
Product
SB Marketing
Partners SB
Mid-Market Mid-Market
Customers Sales
Consumers
Partner
Feedback
Org.
Support
CRM
“Needs” analysis Know prospects
and partners
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 9
10. Strategic Restructuring RSMBA
Sales Forecast by Segment
Set objective of reaching 25% of total SB market in 2009
Small business segment becomes the
Key Factors and impacts growth engine
6,7% 5,3%
- Invest in partners for Small Business
- Revenue generated rapidly from SB 15,0%
- Mid-Market penetration following SB 28,5%
44,2%
- Revenue growth results in share price increase 59,1%
Key assumptions 19,2%
- Analysis focus on U.S. market 19,9%
- SB market remains 9% CAGR in 2009
Original forecast for FY 2007 New forecast for FY 2007
(weight per segment) (weight per segment)
9000 Enterprise Mid-market 9000
8000 Small Business Consumer 8000
7000 7000
Original forecast ($m) New forecast ($m)
6000 6000
5000 18% 5000 57%
4000 4000
3000 3000
2000 2000
1000 1000
0 0
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Source: GSG Finance; GSG US 3 year outlook forecast model Source: GSG Finance; RSMBA consultant
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 10
11. Strategic Restructuring RSMBA
Sales Forecast by Product Groups
Set objective of reaching 20% of SB ERP market in 2009
Back to double digit revenue
Key Factors and impacts growth in 2006
- ERP for SB market drives growth 25%
Original forecast
- Product Groups integration causes sales increase New forecast 22,70%
20%
- Revenue growth results in share price increase
16,90%
Key assumptions 15%
- Analysis focus on U.S. market
- ERP belongs to BSS product group 10%
8,70% 8,00%
6,80%
- SB ERP remains CAGR 8% during 2008-2009 5%
2,00%
0%
FY 2005 FY 2006 FY 2007
9000 9000
BIS BSS
8000
PP UDS 8000
7000 7000
Original forecast ($m) New forecast ($m)
6000 6000
5000 5000
4000 4000
3000 3000
2000 2000
1000 1000
0 0
FY01 FY02 FY03 FY04 FY05 FY06 FY07
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09
Source: GSG Finance; GSG US 3 year outlook forecast model Source: GSG Finance; RSMBA consultant
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 11
12. Strategic Restructuring RSMBA
Risk Mitigation
Risk Rating Impact Mitigation Strategy
Solution based product
Customer centric culture Involve, motivate and reward
Medium development and
is opposed by employees employees on all levels
selling is in danger
Focus on partner research and
GSG has difficulty finding Solution based product
selection process and set up
the key partners in SB High development and
proper support and reward
market selling is in danger
structure
Track market developments
SB targeted market
Revenue growth targets with partners and customers as
segments don’t develop Medium
might not be reached soon as strategy is
as expected
implemented
Market shares from Integrate customers in
Competition copies our
Medium forecast might not be organization through CRM
model
reached raising “step out” threshold
Market shares from Integrate customers in
New entrants copy our
Low forecast might not be organization through CRM
model
reached raising “step out” threshold
Company Analysis Recommendation Company Strategy Organization Financial Impact Risk Migration Time Line 12
13. Strategic Restructuring RSMBA
Proposed Actions / Timeline
2005 2006 2007 2008
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Organization
Establish partner organization within GSG
Grow and educate sales force on industry solutions
Develop incentive schemes for partners
Implement CRM system - know customer/partner
Define and execute account coverage (segments/(in)direct)
Partners
Recruit/incent partners (ISV, IHV, SI, resellers, ...)
Review partner performance/status
Actively gather partner feedback
Products
Develop/maintain Industry specific packages
Actively gather customer feedback
Develop express products for small bus. (1-4 employees)
Integrate Business products for partners/customers
Markets
Grow in Small Business segment
- Financial services, Business Services, Manufacturing
- Healthcare, Retail, Distribution, Telco
- All other industries
Midmarket segment (drag along with small business)
Enterprise segment (industry focus)
Industry standard product enhancements
Grow Business products in all segments
moderate focus
strong focus
Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 13
14. Strategic Restructuring RSMBA
Back to double digit revenue
Conclusive Summary growth in 2006
25%
Original forecast
20%
New forecast 22,70%
Target market: focus on growth in Small Business Segment Changes in GSG organization structure are necessary
SB market market: focus onwith increasing IT needs
Target is big, fast growing growth in Small Business Segment Changes in GSG organization structure are necessary 16,90%
SB market is big, fast growing with increasing IT needs for increased partner focus, better industry knowledge,
industry solutions and better service industry knowledge,
for increased partner focus, better and support
15%
Enterprise -3,60% Growth rate
Growth rate
Short Term Target Segments
Short Term Target Segments industry solutions and better service and support
Enterprise -3,60% Growth rate KeyDual Focus: EnterpriseSegments
Short Term Target Segments
Success Factor:and SB
Short Term Target Partners!
Dual Focus: Enterpriseand SB
Growth rate
KeyDualTermTarget SegmentsSB
Success Factor: Partners!
DualFocus: Enterprise and
Long Term Target Segments
Industry focus is key to growth Enterprise New Sales and Marketing Process for GSG
SB Product
GSG
Mktg/SalesSales Marketing
New and MarketingIntegrate product forservice development, GSG
Process and GSG
Midsize -15,50% Partners are indispensable to SB
Long Focus: Enterprise and reach SMB and solutions market efficiently is key to growth
- Educate GSG Sales force
Industry focus Enterprise SB Product
Midsize -15,50% Focus Term Target Segments reach SMB and solutions market efficiently
Long on growth markets:
Focus Term Target Segments
Long on indispensable
Partners areon growth markets:toof Small Business customers
growth markets: - Recruit, nurture, rewardforce
- Educate GSG Sales partners Mktg/Sales
10%
Small Business 18,80%
Focus ison growth markets:
- Channel strategy& Mid-Market
SB & key to reach wide range
Focus Mid-Market
SB - Provide turnkey industry solutions
- Recruit, nurture, reward partners Mktg/Sales Mktg/Sales
8,70%
Marketing 8,00% Integrate product andand customer service
marketing, sales, partners service development,
Small Business 18,80%
- Channel strategy isMid-Market Integrators, Resellers and ISVs
SB & key to reach
- Recruit and attract partners: Systemwide range of Small Business customers
SB & Mid-Market - Actively gather feedback from
- Provide turnkey industry solutions 6,80%
marketing, sales, partners and customer service
- Partners have Industrypartners: System Integrators, Resellers and ISVs
- Recruit and attract expertise and ensure integration of products (turnkey solutions) customers and partners (CRM)
- Actively gather feedback from Enterprise
Consumer 15,30%
- Partnersover organization in GSG
GSG have Industry expertise and cover integration of strengthen partner relations, customers and partners (CRM)
- Establish partnerrelies on “Enterprise”to ensurepartner needs, products (turnkey solutions) review performance
Enterprise Enterprise
Consumer 15,30% segment which drives growth slowdown
GSG over relies on “Enterprise”
5% Customers feedback
Incentives/Discounts Enterprise
- Establish partner organization in GSG to cover partner needs, strengthen partner relations, review performance
-20% -15% -10% -5% 0% 5% 10% 15% 20% Incentives/Discounts Adequate
Customers feedback Sales
3 new matrixed divisions
Create customer centric culture
segment which drives growth slowdown Partner Organization
-20% -15% -10% -5% 0% 5% 10% 15% 20% CRM matrix for partners Incentives/Discounts
Joint selling Incentives/Discounts
Joint selling Adequate
& support
Product
Sales
3 new matrixed divisions
Create customer centric culture
Enterprise 62,50% CRM matrix for partners
Low Competition: companiesHigh potential partners with high intimacy “defend strategy”
have Partner Organization Joint selling
Measure partners 2,00%
Joint selling
Measure partners & support
Product
Enterprise 62,50% enterprise strategiescompanies have
Low Competition: but lack SB potential partners with high intimacy “defend strategy” Measure partners Measure partners
SB Marketing
Size strategies High
enterprise strategies but High potential partners with low intimacy “gain strategy”
lack SB 0% SBIndustry feedback SB
Marketing
Partners
Midsize 18,30% GSG development toward SB would potential partners with low intimacy “gain strategy”
strategies Industry expertise Industry expertise
SB
Size High
Support2005 Mid-MarketIndustry feedback 2006
FYIndustry expertise FY Mid-Market FY 2007
Partners
allow company to focus on SBSBMid- & potential
Lowwould partners with high intimacy “develop strategy”
Midsize 18,30% GSG development toward Industry Solutions Industry expertise
Analyse requirements sales/partners to development
Market
allow company to focus on SB Low potential partners with high intimacy “develop strategy”
& Mid-
Industry Solutions Complexrequirements
Analyse sales Mid-Marketdevelopment
Support sales/partners
Express products Express products
to
Mid-Market
Small Business 12,90% Market Low potential partners with low intimacy “observe strategy”
CustomersExpress products
Small Business 12,90% Intimacy Enterprise >$500m Complex sales Express products Sales
Revenue weight by
Companies maturing their SB strategy potential partners with low intimacy “observe strategy”
Intimacy
Low
Enterprise >$500m Customers Sales
Consumer 6,20% Revenue weight by
customer segment
willCompanies maturing their SB strategy
also be able to master their mid-
Account coverage Fulfullment Account types Discounts / incentives Analyze customer &
Consumer 6,20% customer segment by
Revenue weight
Revenue weight by
customer segment
market also be able to master their mid-
will strategy (mix enterprise and SB
Account coverage Fulfullment
strategies)strategySales reps Account types Discounts / incentives Service &>$50m (CRM)
Support
Analyze customer &
Consumers Feedback
customer segment
0% 10% 20% 30% 40% 50% 60% 70%
market
GSG sales reps GSG (mix enterprise and SB
Installed Base 3% of order if channel Mid-market
Service &>$50m (CRM)
Support
partner requirements &
Analyze customer partner requiements &
Analyze customer
ConsumersFeedback
Technical interlock
Partner
Partners strategies) Partners Sales repsNewInstalled Base fulfills of order if channel
partner requiements
Segments growth rate and 10% 20% 30% GSG total revenue, FY 2004 GSG sales reps
0% revenue-weight of 40% 50% 60% 70% GSG 3% Mid-market <$500m
partner requirements Technical interlock
Partner Feedback
Segments growth rate and revenue-weight of GSG total revenue, FY 2004sales reps
GSG Partners Partners New 35%
fulfills
<$500m Org. Feedback
Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Installed Base
Partners sales reps
GSG Partners Time Line
Industry best partner
35%
Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line Org. Support
Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk MitigationNewTime Line service
Joint sales approach
Partners Partners
Installed Base Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line Support
Industry best partner
Joint sales approach
New
40%service
Small Business <$50m CRM
Partners
Partners
Installed Base
Industry best partner
40%
Small Business <$50m
10-50 employees “Needs” analysis CRM
Know prospects
Aggressive hunting
Partners NewInstalled Base
service “Needs” analysis and partners
Know prospects
Partners Industry best partner 10-50 employees
Aggressive hunting New
service and partners
Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line
Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line Situation Analysis Strategy Targeting & Segmentation Organization Financial Impact Risk Mitigation Time Line
Small Business segment
Small Business segment Service & Support - -CRM
Service & Support CRM Solutions
Solutions
Mid-Market segment
Mid-Market segment Partner Organization
Partner Organization
GSG
GSG
Strategic Partners
Strategic Partners Product Integration
Product Integration
Partner/Customer Satisfaction
Partner/Customer Satisfaction Culture & Leadership
Culture & Leadership Employee Satisfaction
Employee Satisfaction
Back to double digit growth 14
16. Strategic Restructuring RSMBA
Partner Development and Management
Effective partner development can become an Entry Barrier
Gain strategy
Defend strategy
- Critical improvement area New partner
- Key partners
- Future growth source
Size - Current major contribution source
- High visit frequency
- High visit frequency
New partner
Observe strategy Develop strategy
Intimacy
- No special support - Help to develop business and
- Low visit frequency CRM matrix for partners generate new customers
- Medium visit frequency
Process of new partner recruitment and development
Phase I: Phase II: Phase III: Phase IV:
Recruitment Training Integration Take Off
- New partner survey - Product training - Develop high - Well interaction
and contact potential partners model built
- Solution integration
- Customer data support - Eliminate unsuited - Entry barrier to
collection partners competitor
16
19. Strategic Restructuring RSMBA
Types of partners and initiatives
System Integrators ISVs IHVs
Resellers
Industry expertise Industry solutions Express products
Integration / Implementation Access to GSG technology Bundles HW/SW
Incentives / Discounts Incentives Incentives / Discounts
Support Education
Mid-Market Small Businesses SOHO
Consumers
Enterprise Mid-Market
Enterprise
19
20. Strategic Restructuring RSMBA
Recommendations for current dissatisfactions
- Improve product - Strengthen more - Improve capacity for
integration indirect sales apart market intelligence
from direct sales
- Optimize service - Focus on market
process integration, - Develop and invest in need instead of
e.g. simplified solution business, i.e. produce selling
customer interface BSS / BIS
GSG employee Partner Customer
dissatisfactions dissatisfactions dissatisfactions
- Not enough leadership for - Solution selling without - Need more strategic support
business process and product integration
- GSG has Inadequate industry
integration - Not received enough sales expertise and understanding
- Not satisfied due to working and marketing support of customer business needs
system inefficient
20
Editor's Notes
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