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This document outlines a strategic restructuring plan for GSG to return to double digit growth. It identifies focusing on small and mid-sized business customers and solutions-oriented products as the key strategies. The plan involves prioritizing industries like business services, manufacturing, and financial services for sales efforts. The goal is to increase revenue growth, market share, employee and customer satisfaction through organizational changes and entering low competition, high growth markets.

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RSMBA Strategic Restructuring GSG Back to double digit growth RSMBA Team Nitin Goel Guido Cazemier Bas Hazelzet Tzung-Min Hung © 2005 RSMBA
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
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
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
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
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
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
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
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
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 ($m) 6000 6000 5000 18% 5000 57% 4000 4000 3000 3000 2000 2000 1000 1000 0 0 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 Source: GSG Finance; GSG US 3 year outlook forecast model Source: GSG Finance; RSMBA consultant Company Analysis Revised Strategy Organization Financial Impact Risk Mitigation Time Line 10
Strategic Restructuring RSMBA Sales Forecast by Product Groups Set objective of reaching 20% of SB ERP market in 2009 Back to double digit revenue Key Factors and impacts growth in 2006 - ERP for SB market drives growth 25% Original forecast - Product Groups integration causes sales increase New forecast 22,70% 20% - Revenue growth results in share price increase 16,90% Key assumptions 15% - Analysis focus on U.S. market - ERP belongs to BSS product group 10% 8,70% 8,00% 6,80% - SB ERP remains CAGR 8% during 2008-2009 5% 2,00% 0% FY 2005 FY 2006 FY 2007 9000 9000 BIS BSS 8000 PP UDS 8000 7000 7000 Original forecast ($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
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
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
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
RSMBA Strategic Restructuring Backup slides © 2005 RSMBA
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
Strategic Restructuring RSMBA Sales Allocation by Segment Segment View New Revenue Forecast for FY05 to FY09 ($MM) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 SB potential 9.30 10.14 11.05 12.04 13.13 14.31 GSG SB revenue 0.45 0.69 1.04 1.56 2.36 3.56 GSG SB growth rate 51.0% 51.0% 51.0% 51.0% 51.0% 51.0% GSG market share 4.9% 6.8% 9.4% 13.0% 18.0% 24.9% Enterprise 1,768.0 2,248.0 2,274.0 2,193.0 2,200.0 2,303.0 2,443.0 2,600.0 2,700.0 Mid-market 592.0 642.0 762.0 644.0 709.0 900.0 1,200.0 1,600.0 1,950.0 Small Business 338.0 350.0 382.0 454.0 685.5 1,035.2 1,563.1 2,360.3 3,564.0 Consumer 217.0 292.0 190.0 219.0 230.0 258.0 290.0 320.0 350.0 Total 2,915.0 3,532.0 3,608.0 3,510.0 3,824.5 4,496.2 5,496.1 6,880.3 8,564.0 17
Strategic Restructuring RSMBA Sales Allocation by Product Group Product Group View New Revenue Forecast for FY05 to FY09 ($MM) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 SB ERP potential 5.30 5.60 6.10 6.60 7.13 7.70 GSG BSS revenue 0.12 0.20 0.33 0.55 0.91 1.50 GSG BSS growth rate 65.0% 65.0% 65.0% 65.0% 65.0% GSG market share 3.6% 5.5% 8.4% 12.8% 19.5% BIS 912.0 1,143.0 1,254.0 1,293.0 1,400.0 1,550.0 1,800.0 2,200.0 2,500.0 BSS 26.0 97.0 124.0 123.0 203.0 334.9 552.5 911.7 1,504.3 PP 1,480.0 1,636.0 1,640.0 1,584.0 1,700.0 1,900.0 2,300.0 2,750.0 3,300.0 UDS 455.0 605.0 553.0 497.0 500.0 660.0 800.0 950.0 1,200.0 Total 2,873.0 3,481.0 3,571.0 3,497.0 3,803.0 4,444.9 5,452.5 6,811.7 8,504.3 18
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
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

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Rsmba at kearney nitin

  • 1.
    RSMBA Strategic Restructuring GSG Back todouble digit growth RSMBA Team Nitin Goel Guido Cazemier Bas Hazelzet Tzung-Min Hung © 2005 RSMBA
  • 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
  • 15.
  • 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
  • 17.
    Strategic Restructuring RSMBA Sales Allocation by Segment Segment View New Revenue Forecast for FY05 to FY09 ($MM) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 SB potential 9.30 10.14 11.05 12.04 13.13 14.31 GSG SB revenue 0.45 0.69 1.04 1.56 2.36 3.56 GSG SB growth rate 51.0% 51.0% 51.0% 51.0% 51.0% 51.0% GSG market share 4.9% 6.8% 9.4% 13.0% 18.0% 24.9% Enterprise 1,768.0 2,248.0 2,274.0 2,193.0 2,200.0 2,303.0 2,443.0 2,600.0 2,700.0 Mid-market 592.0 642.0 762.0 644.0 709.0 900.0 1,200.0 1,600.0 1,950.0 Small Business 338.0 350.0 382.0 454.0 685.5 1,035.2 1,563.1 2,360.3 3,564.0 Consumer 217.0 292.0 190.0 219.0 230.0 258.0 290.0 320.0 350.0 Total 2,915.0 3,532.0 3,608.0 3,510.0 3,824.5 4,496.2 5,496.1 6,880.3 8,564.0 17
  • 18.
    Strategic Restructuring RSMBA Sales Allocation by Product Group Product Group View New Revenue Forecast for FY05 to FY09 ($MM) FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 SB ERP potential 5.30 5.60 6.10 6.60 7.13 7.70 GSG BSS revenue 0.12 0.20 0.33 0.55 0.91 1.50 GSG BSS growth rate 65.0% 65.0% 65.0% 65.0% 65.0% GSG market share 3.6% 5.5% 8.4% 12.8% 19.5% BIS 912.0 1,143.0 1,254.0 1,293.0 1,400.0 1,550.0 1,800.0 2,200.0 2,500.0 BSS 26.0 97.0 124.0 123.0 203.0 334.9 552.5 911.7 1,504.3 PP 1,480.0 1,636.0 1,640.0 1,584.0 1,700.0 1,900.0 2,300.0 2,750.0 3,300.0 UDS 455.0 605.0 553.0 497.0 500.0 660.0 800.0 950.0 1,200.0 Total 2,873.0 3,481.0 3,571.0 3,497.0 3,803.0 4,444.9 5,452.5 6,811.7 8,504.3 18
  • 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

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