Defining target markets is one of the strategic pillars for any company and growing organizations around the world face common questions related to internationalization: Should we explore other markets? Which ones? When? How? Even companies used to explore large local markets start to face such questions – now sooner and more frequently. Ernani Ferrari, ex-executive of some of the largest enterprise software in the world and chief consultant of Mondo Strategies, a Boston-based consulting firm specializing in software companies who serve clients such as Microsoft, IBM and Wolters Kluwer, share guidance and some of his experience working with over 100 software companies around the globe. The content of this presentation will help answer these questions and provide insights into what is required for a successful internationalization process.

1. Internationalization for Software Business
Benefits and Investment to Cross Borders
Ernani Ferrari
ernani.ferrari@mondostrategies.com
08/24/2016
Brazilian Association
ofSoftwareCompanies

2. Summary
Internationalization is a pathway not only for
growth, but also to protect acquired market share
Internationalization should be a strategic,
planned move, and not something casuistic. It
should, therefore, be planned and executed with
care and proper investment
Internationalization is a company-wide
movement, not something of a single department.
It encompasses products, processes, people and
time – just like a local new operation does
Markets in perspective:
IT in Brazil expends only 3% of global IT
expenditures
The entire Chilean market is as big as Santa
Catarina’s market

3. AGENDA
Why go international?
When go international?
Requirements to enter new markets
Choosing markets
How to put the required resources
in place
Other considerations
Summary: Roadmap for Going
International

4. Internationalization (I18N)
Adaptation of products and
processes to support
international environments and
to simplify the implementation
of localizations
Internationalization and
Localization
Localization (L10N)
Adaptation of products and
processes for a specific market
(country)
Operational Aspects
Internationalization
Doing business in more than
one country
Business

5. Why Go International?
Distribution of the global IT market
Internationalization has become mandatory for the
medium and long term
Entering new markets
Sustaining market share in local markets
• Globalization. Where are (were?) the borders?
• Growth and attack of large, international players
• Clients are also going international

6. Approaches for Internationalization
A strategic or an opportunistic move?
Strategic planning and systematic execution
The short
long way
The long
short way

7. Driving Forces x Guidance to the
Future
Markets
CurrentNew
Current NewProducts
Driving Force: Market
Driving Force: Product
Driving Force:
Profit / ROI

8. Expansion Strategies
Markets
CurrentNew
Current NewProducts

9. Planejamento
Business Objectives – Market Expansion
Operational Objectives
Reduction of time-to-market
Reduction of costs from “trial-and-error” approaches
Reduction of costs for product adaptation
Better product adherence to the chosen markets
Reduction of risks and liabilities
Preparation for faster, more adequate responses to
the chosen markets
Investment optimization – directions and anticipation
of requirements
Tax benefits

10. Planejamento
Business Objectives – Market Expansion
Operational Objectives
Reduction of time-to-market
Reduction of costs from “trial-and-error” approaches
Reduction of costs for product adaptation
Better product adherence to the chosen markets
Reduction of risks and liabilities
Preparation for faster, more adequate responses to
the chosen markets
Investment optimization – directions and anticipation
of requirements
Tax benefits
We reap what we sow...

11. Internationalizing a Software
Company
ORGANIZATION
INTERNAL
CULTURE
PROCESSES
PRODUCTS

12. Requirements for Going International
Understanding the methodological, technological,
organizational and marketing aspects that are fundamental
for the productivity and quality required at international levels
Visibility over the local and international competition
Conception of business approaches – strategies and tactics
Education of management and operational staff
Software processes – methodologies, techniques, best
practices and tools
Knowledge management
Contact centers and remote customer support
Services – consulting, software implementation, technical
support
Project management
Applied technologies
Internationalization of software and business processes

13. From a business perspective:
What is necessary to be succesful in your
current market?

14. Entering a New Market
– Strategic Factors:
PRODUCT
World-class solutions
Addressing local
market requirements
BRANS
Recognized brand
SALES CHANNELS
Coverage
Expertise
SERVICES
Availability
Expertise

15. Business Model
– Key Alternatives
PRODUCT
Competitive solution
(price x benefit)
Complementary solution
Innovative solution
MARCA
Start from scratch
Generate perception of
presence
 Size
 Market-share in other markets
 References (customer base)
Attach solutions to the
brand of someon
established
SALES CHANNELS
Direct sales
Use of distributors /
representatives / partners
OEM sales
Mergers and acquisitions
SERVICES
Direct presence
Service / sales-service
channels
Outsourcing – field
services / customer
support

16. Business Model
– Key Alternatives
PRODUCT
Competitive solution
(price x benefit)
Complementary solution
Innovative solution
MARCA
Start from scratch
Generate perception of
presence
 Size
 Market-share in other markets
 References (customer base)
Attach solutions to the
brand of someon
established
SALES CHANNELS
Direct sales
Use of distributors /
representatives / partners
OEM sales
Mergers and acquisitions
SERVICES
Direct presence
Service / sales-service
channels
Outsourcing – field
services / customer
support
IN PRACTICALITY:
 Knowledge
 Products
 Processes

17. Market Segmentation
Current and
potential
segments
Segments
that are(or will
be) attractive
Attractive
segments for
which we are
(or can be)
strong
Assets for
positioning and
results in the
chosen
segments

18. Selecting Markets – 6 Steps
1 – Identify the universe of markets
2 – Select evaluation criteria
3 – Evaluate markets according to the selected criteria
4 – Validate markets with key prospects
5 – Prioritize markets
6 – Make adjustments as you go

19. Cuidados Especiais
Delegated Authority x Delegated Responsibility
The responsibility will always be yours, somehow
• Risk analysis
• Image damage
Deep investigation of potential partners and/or channels
Plan for an exit
Partnerships – bridges or tight-ropes?
Partnerships – Complementation and speed
History of (Failures) Sucesses
Product partnerships – Icebergs seen from the surface
More attractive markets
More competition. More costs
Legislation – regulatory requirements and local practices
Taxes – taxation; bringing money home

20. Internationalization – Battle or War?
Market
Opportunities
Threats
Waterfall effect
Desires for greater expansion
Demands for greater expansion
Drawing the roadmap
Natural tracks for expansion
Market attractiveness
SWOT analysis
Synergies – products, organization, customers, complementary
products

21. Product Internationalization
Key Requirements
Addressing the target markets’ requirements
Assessment of the available solutions – potential competition
Product functionality
Common international features
Flexibility for adaptation and re-configuration
Architecture – Technical and Functional
Ease for localizations (and customizations)
• Functional modularization for component reuse
• Personalization resources; flexible user interfaces
• Internationalized business rules
• Localizations independence
• Handling of data format / display
Languages
• Externalized labels
• UIs of dynamic configuration
• Double byte characters
• Multiple text formats and abbreviations
• Variable text lengths for different languages
Documentation – Functional; Technical

22. Key Processes for
Internationalization
Strategic Processes
Strategic Planning
Marketing
• Market Intelligence
• Market Positioning
• Product Management
Operational Processes
Marketing Communication
Sales
Channel Management
Product Development and
Maintenance
Services
Customer Support
PEOPLE
PROCEDURES
TOOLS
OBJECTIVES

23. Product Localization
Aspects to Address
Legal Aspects
Legislation
Mandatory standards
Documentation
Business Practices
Lore and habits
Informal market standards
Economy and market adaptations
Technology context
Cost of resources – human, infrastructrure, financial,
technological
Language
Language and dialets
Slangs and regional expressions
Culture – formality, foreign terms

24. Process Localization
Aspects to Address
Strategic Processes
Marketing
• Market Intelligence
• Market Positioning
• Product Management
Operational Processes
Marketing Communication
Sales
Channel Management
Product Development and Maintenance
Services
Customer Support
PEOPLE
PROCEDURES
TOOLS
OBJECTIVES

25. Roadmap to the
World

26. Roadmap to the World
Evaluate the potential markets. Identify the opportunities
Make thorough SWOT analyses
Map potential markets for the short, medium and long terms
Analyze and learn about target markets
Establish long-term strategies. Prepare short-term action plans
Establish a foundation for internationalization
– adequate products and processes
Adjust the focus – Requirements x Opportunities
Define strategies for your first incursions
Presentation and development of your brand
Establishment of channels for sales and
services
Localization of products and processes
“Operate within your circle of influence”

27. Ernani Ferrari
ernani.ferrari@mondostrategies.com
www.mondostrategies.com