1. Strategy to improve revenue growth at GSG
Prepared by RSM Consultants
Radeshkumar Baboelal
Sunil Patil
Manuel Pineros
Gurkeerat Singh Virk

2. For revenue growth, target new segments and expand existing 2
market through value addition to product offerings
Acquisitions enhance Newly acquired companies work in
product and service conjunction with partners and ISVs
portfolio to provide better service
New
Repackage and modify GSG Improved relations with
Partners
and ISVs
Partners and
ISVs
products to meet changing partners and ISVs
customer needs Small businesses provide an
Develop sales strategy
Repositioning to directly cater to untapped source of future
through small businesses growth.
marketing
170.00
378.39 31%
69%
Small & medium Segment
Enterprise
US SB Market spending ($ billion)
Re v e nue (in $ millio n)
Better products and
customer services lead to
customer delight
 $14,000.00
$12,000.00
$10,000.00
$8,000.00
$6,000.00
$4,000.00
$2,000.00
$0.00
New brand image, satisfied
2005 Q4 2006 2007 2008 2009
Time line
customer and higher revenue
Happy customers = Higher revenues growth leads to growth in
shareholder value

3. Low revenue growth due to industry slowdown and strategy issues. 3
Turnaround will require re-defining markets and business processes
Problems Solutions
• Slowdown in the US market due to Internet • Improve revenue generation from the US
bubble burst, growth emerging from overseas market, sustain growth momentum in overseas
markets markets
• Reduction in IT spending by the enterprise • Identify gaps in the market and provide
segment due to saturation solutions to consolidate market leadership
• Customer requirements for solution and • Integrate customer feedback to provide
servicing support are not addressed adequately solutions relevant to the business. Move from
by product driven strategy product focus to more solution support
• Sales approach focused on “license pushing”, • More responsibility sharing with channel
lack of support for channel partners partners, combined with system of incentives
• Industry expertise limited to few verticals, • Optimize customer support through partner
limited partner support relationship management
• Lack of identification and development of new • Segment and penetrate the small business
market segments market with a spillover on mid size markets
Focus on growth through solution oriented sales and by targeting small businesses
Key Issues

4. Organic growth through value added product offerings to existing 4
customer segments and inorganic growth through development of
small business segment
Based on strengths of GSG, two distinct dimensions are identified as
providing maximum growth potential opportunities
Growth dimension 2:
Provide value added
products
Enterprise
Mid-market
Growth dimension 1:
Target untapped small Small business
business segment
The mid-market segment is best
The mid-market segment is best
addressed through mix of best practice
addressed through mix of best practice
strategies employed for both enterprise
strategies employed for both enterprise
and small business market segments
and small business market segments
Revenue growth will determine shareholder value growth
Key Issues

5. Exploiting small business segment will require focus on specific 5
industry verticals and development of new channels
Small business segment has attractive potential:
- High aggregate demand
Enterprise  Small business (SB) segment accounts for 31% of
total US business IT expenditure
 US SB segment spent $170 billion on IT in 2004
 US SB segment is expected to spend more than $215
Mid-market
billion on IT products, services and personnel by 2008
- Not targeted by other players in the market
Small business
The challenges in the segment are
Too wide spread due to Lack of expertise in selling to
extremely large number of this segment, traditionally the
businesses domain of channel partners
• Identify high potential industry verticals for • Demarcation of firms to be targeted by GSG sales
effective targeting representatives and channel partners
• Develop channels to promote products directly to • Promote products directly to small business
small business segment to increase distribution segment to decrease leakage of margins to
reach channel partners
Targeting specific industry verticals leads to focused approach and expertise development
Demarcation of size of firms to target, prevents direct involvement in selling to small firms and avoids conflict with
channel partners
Small business
Key Issues
segment

6. Six high potential industry verticals identified for phased targeting in
6
small business segment to cope with segment complexity and
develop expertise
Estimated average
Estimated average
No. of businesses No. of employees Estimated IT spend IT spend per
Industry categories no. of employees
(thousands) (millions) (billion $USD) business firm
per business firm
(USD)
Agriculture and resources 967 3.2 1.1 3.3 1138
Manufacturing 483 8 7.3 16.6 15114
Construction 1040 3.6 1.8 3.5 1731
Transportation 460 3.3 3 7.2 6522
Telecom and utilities 69 2.4 3.3 34.8 47826
Distribution (Wholesale) 612 2.5 5.1 4.1 8333
Distri (Retail) 1119 4.9 5.9 4.4 5273
Financial services (Finance & Insurance) 566 2.5 6.9 4.4 12191
Financial services (Real estate, etc) 460 0.8 1.5 1.7 3261
Business services 1538 6.3 7.6 4.1 4941
Food and accomodation 414 3.5 3.3 8.5 7971
Other services 737 3.5 1.8 4.7 2442
Government 39 0.8 0.5 20.5 12821
Education 69 1.4 0.6 20.3 8696
Healthcare 428 4.3 3.8 10.0 8879
Total small business segment 9000 51 53.5 5.7 5944
• High potential industry verticals identified based on average IT spend and average size of firms
• Targeting specific industry verticals dilutes risk of unfocused sales approach
• Phased development of products to target specific industry verticals is recommended to build industry expertise
• GSG sales representatives solely responsible for small businesses with more than 10 employees or with an annual
turnover of more than 10million USD
Industry focused approach in small business segment mitigates risks emanating from, (a) large number of firms and
(b) diversity of industries and functions
Small business
Key Issues
segment

7. Change sales channel strategy to take products directly to small 7
business customers
GSG has to improve visibility and increase channels through which prospective customers can procure products
directly, minimizing leakage of margins to channel partners
Considering size and spread of small business market and heavy trade margins for channel partners, there is
incentive to promote products directly to small business customers
Develop new sales channels to target small business customers. Support these channels through promotional
campaigns and customer incentives
Clear definition of roles of various channels and partners to safeguard against future conflict of interests
Sales channels
Promotional campaigns Customer Incentives
- Use advertising to Websites: Create sites capable of - Offer higher discounts on
increase awareness of selling software products, direct orders from website
GSG’s redefined approach providing support and receiving or by phone, than through
and new channel strategy customer feedback channel partners
- Leverage brand equity in Independent Software Vendors - Offer discounts on buying
enterprise segments to sell (ISV’s): Increase sales network more than one product per
products in small business transaction
through new contracts with
segment
industry specific ISV’s
- Links on other websites
and non-competing Phone: Provide sales and support
companies Google, Yahoo, through 1-800 phone numbers
MSN, etc Retail: Undertake contracts with
retailers like CompUsa, Best Buy,
Media Mart, Circuit City, etc.
Contributes to more visibility in eyes of shareholders, affecting increase in market cap
Small business Sales
Key Issues
segment channels

8. Change marketing strategy for existing market segments, move 8
towards providing solutions and value added product offerings
Enterprise segment Focus on providing Set-up dedicated
is the source of the enterprise account teams with
Enterprise
largest chunk of customers with expertise along
revenues, in spite of value addition in industry verticals to
low growth terms of superior service enterprise
potential customer service customers
Mid-market
Small business
The challenges in the segment are
Saturated market segment Lack of integration and
with undifferentiated customization of products to
products match customer
requirements
• Value added services are critical to • Simplicity in integrating GSG products with
differentiate product offerings customer business environment is crucial to
generate dependencies
• Acquire or set up joint ventures with smaller
companies to enhance servicing capabilities • Leverage existing strengths in enterprise
industry verticals such as financial services, to
• Identify gaps in market for future product penetrate other segments of the enterprise
development industry
Focus on moving away from product oriented approach to add value to differentiate product offers
Small business Sales Enterprise
Key Issues
segment channels segment

9. Leverage market leadership to further penetrate business solutions 9
segment, while restructuring existing market standard products
• Evaluate threats from industry entrants to maintain product
leadership position in generic products and identify opportunities in
solutions market
• Research customer needs to identify trends and develop
functionality accordingly
Generic products Solution suites
• Develop stripped versions of products, • Develop industry specific solution suites to
coupled with optional modules in order to target small business segment meeting
meet price/functionality requirements of overall company requirements
divers customer segments • Provide out-of-the-box solutions to reduce
• Evaluate existing product portfolio to implementation and integration costs
identify complementarities and create • Bundling allows to sell at reduced prices to
product bundles small customers
Enhanced features, redesigned product structure and customer driven development secure current market
participation and allow penetration of the small business segment
Small business Sales Enterprise
Key Issues Products
segment channels segment

10. Realign company structure to expand market coverage and capture 10
growing business solutions market
GSG Partners
• Create matrix structure with industry verticals • Align with industry specific partners that
and product horizontals to match customer target small and midsize businesses
needs and solutions provided
• Partners complement GSG’s market coverage
• Acquire specialized services firms to increase by targeting businesses with under 10
in-house industry specific knowledge employees
• Create a Professional Services group within • Create an incentives program to improve
the organization to develop and support partner relations
relationship alignment by industry segment - Incentives for prioritizing GSG products
- Reward partners for customer support
Develop new business solutions through joint ventures with partners to drive value of product offering, improve
partners knowledge of GSG products and build long-term relationships
Small business Sales Enterprise Company
Key Issues
segment channels segment Structure

11. Increased industry specific knowledge and matrix based support 11
structure help resolve customer and partner problems reducing time
and effort required to deliver solutions
• Develop new Professional Services (PS)
teams with industry specific knowledge to GSG
implement and integrate business solutions
PS Enterprise
Enterprise
• Divide PS teams along customer segments
complementing sales efforts PS Medium
• PS teams work hand in hand with and Small
account teams. Business
• PS specialized in customer segments coupled with Mid-market
attain increased knowledge reducing acquired
resolution time
businesses
• Specialized partners that have knowledge and
experience in specific industries
Partners
Small business
PS specialized along
industry verticals
Acquisition of industry specific service companies contributes resources, business knowledge, and sales and
marketing network
Small business Sales Enterprise Company
Key Issues Support
segment channels segment Structure

12. Capturing only 1% of the $215bn small segment IT market in 4 years12
leads to an annual revenue growth rate of 16% …
7000 7000
6000 6000
5000 5000
4000 4000
3000 Small and 3000
Consumer
2000 Mid-Market 2000 PP
UDS
1000 Enterprise 1000 BSS
BIS
0 0
FY2004 FY2009 FY2004 FY2009
Projected Revenue Growth Projected Revenue Growth
by Customer Segments ($MM) by Product Group ($MM)
Revenue growth from untapped market segments will reduce dependency on enterprise segment and reshuffle
contribution from product groups
New added value provided to clients via customized solutions helps GSG neutralize threats from potential
competitors, secure market leadership and increase capital investment in product development
Small business Sales Enterprise Company
Key Issues Support Financials
segment channels segment Structure

13. … A more aggressive strategy will allow GSG to capture a market 13
share of 4%, resulting in CAGR of 37%
Comparitive Growth With Respect to market share in Small
segment
$14,000
$12,000
US Revenue in $m
$10,000
CAGR 37%
$8,000
$6,000
$4,000
$2,000
$0
1 2 3 4 5
Time Frame (in years)
Current Situation 1% Market Share 4% Market Share
Estimated net cash flow based on annual net investment of $500
millions and 20% profit margins
Total revenue represents projected growth in products
$3,000
and solutions segments, across all customer segments.
$2,500
US $ millions
$2,000
$1,500
$1,000
$500
$0
2005 Q4 2006 2007 2008 2009
Time
Investment Profits Net Cash Flow
Steady revenue growth will positively impact stock price.
Small business Sales Enterprise Company
Key Issues Support Financials
segment channels segment Structure

14. The new strategy requires detailed implementation - GSG needs a 14
schedule that allows a progressive penetration of new segments
2006 2007 2008
2005 - Q4
1st half 2nd half 1st half 2nd half 1st half 2nd half
Identify profitable small and medium
business market segments
CUSTOMER Target Financial, Manufacturing and Telecom industry segments
SEGMENTS
Target Government, Education and Healthcare industry segments
Target small businesses with less than 10 employees through partners
Analyze product portfolio, identify redundancies
Develop prepackaged industry specific suites and keep updating the packages
PRODUCTS
Repackage and bundle products, create stripped down versions to target small and medium businesses
Sales and marketing team focus on industry and market segments and provide feedback to products management about customer and
industry needs
SALES,
Set-up Professional Services Group
MARKETING
AND SUPPORT
Professional Services Enterprise (PSE) teams support industry specific customers
Professional Services Small and Medium (PSSM) teams support industry specific customers
Identify potential acquisition targets to
gain access to new markets
PARTNERS Acquire services companies
AND
CHANNELS Identify new channel partners and ISVs to
improve sales
Create alliances with new channel partners and ISVs
COMPANY
Educate employees about shift in focus from product to solutions
CULTURE
Small business Sales Enterprise Company
Key Issues Support Financials Schedule
segment channels segment Structure

15. Success of the proposed strategy is dependent on careful 15
consideration of a few critical issues
Threats Solutions
• Sales channel partners may not provide • Introduce a system of regular feedback from
expected support end customers and share it with channel
partners
• Implement another system of two way feedback
with channel partners to prevent problems
• Acquisition and subsequent integration of other • Acquisitions should focus on complementing
companies may take longer than expected market knowledge and skill set instead of size
and revenue
• Competitors may copy strategy to target the • High visibility advertising campaign to build
small and medium businesses brand awareness and incentive programs to
foster customer loyalty can pre-empt
competitive pressure
• Diversity in small business firms within an • Thorough research should be undertaken to
industry vertical may result in products not develop products addressing wide range of
aligned to customer expectations requirements within target industry verticals
• Possible internal resistance against move • Top management within organization has to
towards a solutions focused strategy due to reach consensus and act strongly to implement
strong product driven culture business strategy requirements
Small business Sales Enterprise Company Threat
Key Issues Support Financials Schedule
segment channels segment Structure Analysis