Expansion Model and

Organizational Theories
Focus Apsolut Software India Pvt. Ltd.
 Background
• Apsolut Software India Pvt. Ltd was started as an Offshore Service Center for
Apsolut GmbH in the year 2009
• They have focused towards the IT procurement solutions of SAP in the
market. Apsolut strategy has been aligned with SAP’s strategy
• Since inception, their primary customer market has been Europe with few
customers from Middle East and North Africa region.
• Apsolut in India today is 70 consultant company with a revenue of 2m Euros
an year for Offshore activities
• Apsolut India is now planning to focus towards Indian market as part of
growth
• Apsolut also establishing other business streams within SAP environment to
align with SAP Strategy
 Generic Strategy- Apsolut India
Competitive Advantage
Competitive Scope

Broad target Cost Leadership Differentiation

Narrow target Focus

• Apsolut’s competitive Advantage has been towards Differentiation.

• Apsolut has built a strong work force with specialized knowledge
towards IT procurement solutions of SAP
• Specialized trainings were conducted for employees to build the
necessary knowledge in the application area
 Value Chain - Apsolut India
Activity Type Activity Expected status in Value Chain Current Situation
Supporting Firm • Highly Developed systems • Moderately developed systems
Infrastructure • Company wide emphasis on importance • High awareness of importance of
of quality quality
Support Human Resources • Good Compensation program • Compensation program is evolving
• Extensive use of subjective rather than • Performance is more objective than
objective performance subjective
• Superior personnel training • Personnel training focused objective
Primary Operation • Consistent good quality project delivery • Fire fighting situations in projects to
ensure good quality
Primary Sales and • Credit buying arrangements for • Flexible arrangements for customers
Marketing customers • Strong Personal relationships
• Personal relationships with customers
Primary Service • Extensive buyer training • Strong and knowledgeable team for
• Qualified application management post sales support
resources • Non-standardized processes for
different customers
 SAP IT Procurement Services Industry -
India
Bargaining Power • Bargaining power of Buyers being high
of Suppliers – means SAP Partners will have to provide
Very low as options services at low cost
for customers are • Large number of Substitute products in
high market also influences the service cost
Threat of new Threat of
Industry rivalry – Moderate Substitutes –
entrants
- Economies of scale is high
– Very high since the High with availability
- Less Capital requirement
industry is low capital of cheap and
- Non-existing Product differentiation
intensive competitive software

Bargaining Power of • Significant impact towards the Competitive

Buyers – advantage. Driving towards Cost Leadership
Very high due to higher • Current branding is based on Differentiation
number of consulting
and is well recognized in SAP Partner Eco-
firm
system
 Mobility Barriers
• SAP changed the strategy for their Procurement solutions
• Gradual movement from an On-premise highly customizable systems to cloud
based very less customizable systems
• Cloud based systems demand strong Procurement process knowledge rather
than Application enablement
• Objective based training and performance measurements driven the
employees to be highly skilled in Application enablement rather than process
consulting. Also hindered succession within hierarchy
• Transition of employees between IT application becomes a constraint.
• Leaders with result oriented approach are not prepared
• Managing multiple portfolios is challenge due to lack of leaders
• Shifting from Differentiation to Cost leadership with respect Competitive
Advantage has impact on Global Brand recognition
 Leadership and Organizational Theory
• 95% of the employees are home grown
• Lack of formalization meat unclear roles and responsibilities
• Awareness of the actual consulting job was less
• Non-standardized process along with home grown employees meant maverick
operations
• Productivity focused performance management system did not help overall
development of personnel
• Strong emphasis towards Hygienic factors like Salary and fringe benefits and
less towards Motivators like responsibility and sense of importance
• Objective based personnel training hindered managing succession
 Firm level strategy - Recommendations
Comparison between two possible outcomes and to-do’s
Strategy
• Continue to focus towards Differentiation as
Competitive Advantage
• Continue to Focus towards gaps in value chain
• Drive operational efficiency and Operative model
to sustain in Low Margin markets
• Standardize and Formalize the processes
• Establish concrete Collaboration with other players
in SAP Ecosystem to leverage on the current
branding
• Focus towards other markets like Middle east along
with Indian market to drive a sustainable margins
• Invest towards talent acquisition to drive the
business initiatives
Organizational Theory
• Re-skilling the workforce to suit the market
• Upskilling workforce for continuous growth
• Focus towards Motivational factors along with
Hygienic factor
• Formalize the roles and responsibilities for clear
overview for the employees
• Focus towards a complete two factor motivational
theory implementation
• Implement Goal setting theory to drive result based
approach for employees
• Standardize training by establishing leaning journeys
within learning and development
• Peer groups within the company to be established
and learning journey to be established