BUSINESS PLAN:- INFORMATION TECHNOLOGY

INDUSTRY

BY:

AKASH BHADRA-19PGDM-BHU006

ANAND CHAUDHARI-19PGDM-BHU009

JAYPRAKASH SINGH-19PGDM-BHU031

RITESH MISHRA-19PGDM-BHU053

SANDEEP SINGH-19PGDM-BHU056

ANIRBAN MANDAL-19PGDM-BHU086

GUIDED BY: PROF. KAPIL PANDLA

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 TABLE OF CONTENTS
 Executive Summary------------------------------------------------------------------------------------------ 03
 Company description----------------------------------------------------------------------------------------- 04
 Industry analysis----------------------------------------------------------------------------------------------- 06
 Market analysis------------------------------------------------------------------------------------------------ 07
 Marketing strategy and implementation------------------------------------------------------------------10
 Organization and Management----------------------------------------------------------------------------15
 Financial Plan--------------------------------------------------------------------------------------------------18

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  Executive Summary:

RT Software Pvt. Ltd. (‘RTS’), is an information technology firm specializing in database management,
development of software as well providing supports to various corporates. RTS aims to provide the
high-quality business solutions in the area of technology and focusing mainly on the BFSI sector, NBFC,
Online Retail stores, Media, Fin-Tech, Hospitality. RTS was established in the year 1992 and is having
its headquarters in Pune, Maharashtra. The company currently has a workforce of around 6768 people
and within the next five years it will add around 2000 people to its workforce.

RTS was started in the year 1992 by Mr. Arun Das, prior to he was working as a Technical Architect
for TCS. Under the leadership of Mr. Das the company has grown around five times in terms of
Revenues, Workforce, and Partnership and will continue to do so for the next five years. Mr. Das has
an experience of over 20 years and has generated a revenue of around 1500 crores and made a
partnership with 20+ companies.

RTS focuses mainly on two service areas such as database and application development and support.
RTS tries to maintain good relationships with its clients and bring out new innovative business
developments.

The aim of business plan is to create a framework for RTS will in increasing its revenues annually
around by 20% and simultaneously continue to grow its assets by 25%. The purpose of this plan is to
provide good understanding by the company and project the growth of the company soon.

 Business Objectives:

The primary objectives of ITS are:

 Provide customize technology solutions with an outstanding customer service thereby

relationship with the customer and getting recurring projects.
 Offer a dynamic work environment to the employees with flexible working hours and offer
them bonuses/incentives/ESOPS based on their performances and feedbacks.
 Focus on timely deliverables of the projects with minimum flaws.
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  Mission Statement:

The mission of RTS is to develop and maintain good relationships with each client (both internal
and external), by providing them with the technology services as well as support at a reasonable
and an affordable price.

 Guiding Principles:

RTS works on the four guiding principles:

 Be Dedicated
 Be Dependable
 Be Determined
 Be Disciplined

 Company Description:

RTS is a technology consulting company specializing in the domain of product engineering services.
As a leader in the technology and product engineering space our solutions are mainly focused on
modern technologies and are supported by a scientific, data-driven system. The system provides us
better predictability and also ensures a better value per unit cost to our clients. RTS genius minds help
in the delivery of the most favourable technology solutions to a widespread client base.

 Ownership:

Mr. Arun Das is the Chief Executive Officer and Managing Director of RTS. Mr. Das started his career
in the India as a software engineer and has been contributing to software development industry as well
as quality management ever since.

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Mr. Das is dedicated towards living a healthy lifestyle and is also very disciplined about it. He
encourages all RTS employees to take up a physical activity or a sport thereby good mental state as
well as physical state. This also helps to attain optimal productivity and get a balanced personal and
professional life.

 Locations:

 Headquarters:
 Pune

 Development Centers:
 Hyderabad, Telangana
 Vashi, Maharashtra
 Pune, Maharashtra
 Bangalore, Karnataka
 Chennai, Tamil Nadu

 Sales Office:

 Atlanta, Georgia
 Princeton, New Jersey
 Tokyo, Japan
 London, United Kingdom
 Singapore
 Dublin, Ireland

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  Industry analysis

Worldwide IT services revenue is about $800 billion. Leading exporters of computer and technology
services include India, the US, Israel, and China, according to the World Trade Organization. Major
companies based outside the US include Fujitsu (Japan), T-Systems International (a subsidiary of
Germany's Deutsche Telekom), and Cap Gemini (France).
The market is fragmented with small players competing alongside large, multinational companies.
Through a competitive analysis we get to know that buyers range in size: larger buyers, with greater
financial muscle, exert more buyer power. Brand recognition is likely to be of significant importance to
customers and they therefore often look to a reputable company for services. Entry to this market is
increasingly achieved through the diversification of operations by existing companies from other fields.
Rivalry between market players is alleviated to an extent with larger players operating in other markets
or offering their services to a range of industries. Skilled employees, as suppliers of technical knowledge
and expertise, are an important input.
We will focus on 4 parameters i.e.
1. Market size
2. Industry participants
3. Main competitors
4. Market segments

1. Market size:
One of the most crucial tasks an entrepreneur has is to calculate the size of their market, and the
potential value that market has for their start up business. Without this data we can’t create a viable
business plan, or be taken seriously when approaching potential investors. Determining the market size
is critical. It tells you and your partners, team and investors how much potential business is really out
there. It helps calculate how much value there really is for your individual venture. This is critical to
know, even if you never plan to raise a dime in outside capital.

2. Industry participants:
We should know who else sells in your market. We can’t easily describe a type of business without
describing the nature of the participants. There is a huge difference. Economists talk of consolidation
in an industry as a time when many small participants tend to disappear and a few large players
emerge. In accounting, for example, there are a few large international firms whose names are well-
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known, and tens of thousands of smaller firms. The automobile business is composed of a few national
brands participating in thousands of branded dealerships, and in computer manufacturing, for example,
there are a few large international firms whose names are well-known, and thousands of smaller firms.

3. Main competitor:
Having a challenger right on the heels pushes us to run faster, work harder and think deeper. It drives
innovation, inspires perseverance and builds team spirit. For that we need to follow certain criteria as:
 Find the strength and build on them
 Keep tabs on the competition
 Monitor the numbers
 Value the customers

4. Market segments:
A market segment is a category of customers who have similar likes and dislikes in an otherwise
homogeneous market. These customers can be individuals, families, businesses, organizations, or a
blend of multiple types. Market segments are known to respond somewhat predictably to a marketing
strategy, plan, or promotion. This is why marketers use segmentation when deciding a target market.
As its name suggests, market segmentation is the process of separating a market into sub-groups, in
which its members share common characteristics.

To meet the most basic criteria of a market segment, three characteristics must be present. First, there
must be homogeneity among the common needs of the segment. Second, there needs to be a
distinction that makes the segment unique from other groups. Lastly, the presence of a common
reaction, or a similar and somewhat predictable response to marketing, is required. For example,
common characteristics of a market segment include interests, lifestyle, age, gender, etc. Common
examples of market segmentation include geographic, demographic, psychographic, and behavioral.

 Market analysis:

The market analysis is one of the most important parts of any start up strategy. It can actually help
reduce risk because if you really understand your potential customers and market conditions, we will
have a better chance of developing a viable product or service. It should also help us get clear on what

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exactly makes you different from our competition, which can make or break your chances of standing
out in a crowded landscape.

1. Market tests:

Introducing a new product or service without first testing the market is like jumping off a cliff into the
sea, blindfolded--unthinkable, life threatening, treacherous and unnecessarily risky. Many new ideas
and products are successful because their creators identified an unmet need in the market and verified
the viability of that concept.

Time and money are extremely valuable to us--we can't afford to waste them by investing them in
producing a product or service that fails in the marketplace. The more you test your product before you
produce and sell it, the more likely you are to earn the sales and profits that you desire. Just remember,
every dollar you spend in market testing will save you many dollars of losses later on in the marketing
process.

Through correct and vigorous market research, you'll uncover the following vital information:

 Demand for a product or service in your market

 Sales figures within a market for a particular product or service
 Who your customers are
 What those customers think about your product or service and what they think about your
competitors', so you can capitalize on your strengths
 Where and how customers buy your product or service, so you can establish the most effective
distribution and marketing channels
 How much customers are willing to pay, so you can figure out a competitive price for them and
realistic profits for you
 Who your direct and indirect competition is
 How to position your product or service so that you take advantage of its unique selling
proposition
 Which governmental regulations your product or service will be subject to on a local, state, and
federal level.

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2. Target market segment strategy:

In business, it's critical that you persuasively communicate your marketing messages. To do that, you
need to be able to adapt your messaging so that it appeals to the consumer's needs, wants and values.
The smaller and more homogeneous your target market, the more likely it is that everyone within that
market will respond to the same messaging.

Market segmentation is the act of dividing a large target market into distinct groups of consumers who
have similar characteristics, needs or behaviours..This process is called segmentation because you're
splitting the large target market into smaller segments.

For marketers, segmentation is invaluable because it:

 Prompts you to create new products based on the exact wants and needs of the consumer segment
 Gives a better understanding of the target audience and thus makes the company's marketing
more effective
 Uses the marketing budget strategically or reduces it, because the messaging is specific
 Puts the consumer first, which is a sure-fire way to attract and retain loyal customers and gain an
advantage over competitors

3. Positioning:

Positioning helps establish our product's or service's identity within the eyes of the purchaser. A
company's positioning strategy is affected by a number of variables related to customers' motivations
and requirements, as well as by its competitors' actions.

Before we position our product or service, we should answer the following strategic questions about
your market and your products or services:

 What is the customer really buying from us?

 How our product or service is different from those of our competitor?
 What makes our product or service unique?

The company need to set itself apart from its competitors by its narrow and targeted market focus
(energy and defence) and by completely understanding industry trends.

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 Extreme attention to detail in its subcontracts and project planning sets them apart from their peers

 Marketing Strategy and Implementation

ITS have to sell $152,000 in new revenue or put another way, bill an additional 1,344 hours annually
if it wants to grow revenues 20% annually and to keep pace with peers. ITS has already built in cushions
into its pricing model, which easily allows for just such an increase.

If we take an example in proforma Year One, it is estimated by ITS that it will bill 2,794 hours in
billable revenue. Now if do calculation in total revenue then
2,794 * $113.07 =$315,917. this will be the total revenue.
However, the company has the potential for 9,600 hours annually with working 40 hours a week
with a staff of 5 employees,. And the current staff will easily absorb The additional burden of
1,344 hours.

 SWOT Analysis

1.1.1 Strengths:
1. ITS provides high end consulting services at a reasonable price.
2 ITS is very flexible and it easily adapts to changes as needed.
3 A minimum of 20% of ITS’s revenues in the form of contracts – which provide income
stability is pursued by ITS.
4 ITS is able to ‘turn on a dime’ and meet / exceed deadlines

1.1.2 Weaknesses:
1. ITS has Product obsolescence and the technology changes.
2. It has rapid life cycle, now if we talk about IT industry then it can be subject to
obsolescence with the advent of new technology very fast.
3. Substitution – like many of the services ITS provides can be mirrored by competitors.
4. Consumer base is limited with a potential for concentration risk should one sector
become less than profitable.

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1.1.3 Opportunities:
1 WOSB status which is already attained by ITS, which makes them very attractive to
partner with in prime government contracts.
2 There are so many new technologies in cutting edge in energy and healthcare industry
are available which make the Charlotte market a robust one for subcontracting.

1.1.4 Threats:
1. If payment from the contractor is delayed for any lengthy time period the Cash flow will
be critical.
2. their prices due to efficient in economies of scale can be reduced by National competitors.

 Strategy Pyramid
To cushion against revenue decline when the spending environment deteriorates, the achieving the
minimum of 20% of its revenues in the form of recurring consulting base is planned by ITS. Now
Long-term outsourcing contracts provide revenue continuity: Contracts are often five to ten years
long, and are rarely broken. ITS is planning to achieve this goal by providing top notch service to
its customer base with detailed follow-ups and reviews. ITS can quickly alert clients of
improvements and new technologies ,by keeping its narrow focus on needs and target markets. ITS
employees can readily adapt and perform routine upgrades by its commitment to training and
education. These type of services are often built into the contracts up front, automatically generating
residual income.

 Unique Selling Proposition (USP)

By its narrow and target market focus (energy and defense) ,ITS has already set itself apart from
its competitors. ITS is truly the market expert Because it is completely understanding industry
trends and trends.
ITS has the ability to not only meet /exceed deadlines, but they can adapt quickly and on short
notice , Because of it is small in size.
.

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  Competitive Edge
It is fact that ITS works with both local government contractors, has a narrow, specific targeted
customer base, which is combined with WOSB status and it has a proven track record, and gives
ITS an edge over the competition.

 Marketing Strategy and Positioning

By its narrow focus on the energy and healthcare sectors, ITS is already uniquely poised as
government subcontractor. This type of focus allows for detailed models, specially targeted to
these industries.

1.1.5 Positioning Statement:

The main goal of ITS is to be the premier subcontractor in the health care sector as well as
energy sector also. ITS can meet it’s milestones as well as deadlines very easily and adapts
the change very easily .The main moto of ITS is ‘We don’t just get the job done the first time,
we get it done right”.

1.1.6 Pricing Strategy:

If we talk about flat rate then it is changed by $113/hour in ITS
 One hour on–site minimum
 Because of emergencies the flat rate does not increase.

1.1.7 Promotion and Advertising Strategy:

ITS primarily depend on direct marketing by word of mouth. one of the members Ms. Jayne
who the Charlotte Chamber of Commerce and has promoted the business by word of mouth
and he has volunteered for many of the chamber events and sponsored happy hours as
well as corporate luncheons also.

There is another marketing tool that is company website.

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1.1.8 Website:
The history of the company, and services and products provided these are identified by
ITS’s website. In the website there is a “Who We Are” section which has brief biographies
and featuring pictures of the ITS staff. For SUB-net database that lists all opportunities from
government contractors and FedBizOpps.gov, the searchable federal opportunities
database there are another site is also available.
1.1.9 Marketing Programs:
ITS will rely heavily on face to face time with contacts with its limited budget. The IT
community is very close-knit and it travels world very quickly.

 Sales Strategy:
ITS likes to present its prospects with the next best thing, an initial free consultation and
evaluation. The questionnaire which is given to potential client for review which is invaluable and
helps ITS determine options best suited for the client. It is believed by ITS that by truly
understanding their customers, they can create custom Project Plans and win subcontracts.

1.1.10 Sales Forecast:

ITS expects that there will be The growth of revenues by 20% annually over the next three years.
Now ITS must have to sell $152,000 in new revenue or it has to put another way, bill an additional
1,344 hours annually, In order to keep pace with peers as well as grow revenues 20% annually.

For example in proforma Year One, it is estimated by ITS that, it will bill 2,794 hours in billable
revenue.
2,794 hrs * $113.07 hourly rate =$315,917 revenue
However, the company has the potential for 9,600 hours annually with a staff of 5 employees
who is working 40 hours a week. Now the additional burden of 1,344 hours can be easily
absorbed by current staff. This type of business plan however employees very much conservative
approach with sales as well as assets reflective of industry peers.

Table 5.6.1 Annual Sales Forecast

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 Annual Sales Forecast Year 1 Year 2 Year 3

Sales

Revenues $315,963 $437,129 $618,878

Additional Revenues
(Residuals) $78,996 $109,282 $154,719

Total Sales $394,959 $546,411 $773,597

1.1.11 Sales Programs:

The employees of ITS always awarded by ITS with a lucrative incentive package to include
bonus as well as profit sharing also. In the first three years employees will receive small
bonuses, but after some time working in ITS , bonuses and profit sharing will commensurate
with annual revenues.

 Legal:
ITS is a Chapter S-Corporation and the business is done in State of North Carolina. This company
is owned by Sara Jayne.

 Milestones:

Table 5.8 Milestones

The following milestones will assist ITS in gauging its target metrics.

Milestone Date
Obtain WOSB status Today
Grow revenues 20% and assets 25% Year One
Secure 20% revenues in the form of recurring contracts Year One
Hire five new employees Year
Three
Become a Prime Contractor Year Four

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 Diversify sector – enter into defense (largest government Year Four
contractor)
Hire a full time proposal writer Year Four

 Exit Strategy:
The company won’t have sufficient cash flow or we can say the working capital to meet operating
needs If for four consecutive periods if revenues fall below break-even. in this situation, the company
have to do liquidation or disposal of assets, firstly the computers and hardware because these are the
primary assets of the company. And after this secured creditors will be paid first, after that with the
remainder to the investor unsecured will paid.

Organization and Management:

In organizational and management, we will focus on some parameters which are directly related to
starting a new business in IT & software sector .

Each of important parameters are described below

ORGANIZATIONAL STRUCTURE:
When we are planning for open a new business, we have to concentrate on firm or organizational
structure .A good structure make our business more perfect and more precious and that helps to
achieve the goal.
In organizational structure, we have to look into some factors which shown in below point wise.

1.Employee strength:
I think ,without manpower ,it’s not possible to run our business but it should be cost efficient .So at the
beginning ,we appointed 100 to 150 workers for our business ,where all kind of peoples are available
(from low level management to high level management).If ,our business run well then we will go for
increase our worker strength according to the performance .

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To start a new business, we required sufficient amount of raw material .basically our business on
software base so the raw materials for our project are like CPU, CHIPS, MONITORS, INTEL, and
PROGRAMMING SOFTWARE etc.
We need to contact with the contractors or vendors as resource of the raw material.

3. Skilled And Experienced Worker:

We need to required skilled and experienced worker that influenced our productivity effectively and
efficiently .When we will start a new project ,first we have to established our company with more
perfection and more valuable with best quality with cost efficient .So,we must put our effect to appoint
appropriate workers .
3. Expertise:
Expertise defines by that peoples who are expert or master on a particular domain .In our company
we have to required expertise on specific domain like “WEB PAGE DEVLOPEMENT ,SOFTWARE
DEVELOPMENT ,STRUCTURE DESIGN,…” Etc.
4. Researcher:
Researchers are those person who discover or innovate something new that really beneficial for the
company and that helps to grab the market attention .So it’s essential to appoint few researcher that
the part of R&D which make our company more creative and innovative.

 MANAGEMENT TEAM:

In a organization management team formed by the combinations of various departments like

“HR,OPERATION,ENGINEERING,MARKETING,ANALYSIS…” Etc.
All the important parts of the management team described below,

1.HR:Human Resource play a important role to run a business because he/she only knows about the
requirements ,knows about the work environment whether it is good or bad ,relationship among the
worker within the organization ,give the rank or rating for analysis all the worker and on the basis of
that criteria ,they evaluate all the worker for their future promotion or anything else.

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2. Operation analyst:
Operation Analyst are those who analysis all the operational activity like supply & logistic, inventory
management, production control, minimizing the transportation cost, employee scheduling ,as well as
production with less error. So it plays a important and valuable role on an organization.

3. Market researcher:
Market researchers are those who know about the market and research on it and come up with a new
development product with a modified price that is more effective and efficient for the market .So
researchers are evaluated all the current activities of the market and come up with a innovated idea
that helps the company to differentiate from others .Our researcher come up with a new idea that ,we
provide best quality of software and developed old software to a new software that much more fast and
that also run into any kind of computer as well as for any windows phone and also for some high quality
android phone also ,with a low cost compare to the other software companies into the market .

4. Decision Maker:
Decision Makers are those who make the decision after done the research and analysis on the market
condition as well as the previous data of our company .we modified our product with “PROVIDE BEST
QUALITY OF SOFTWARE WITH A COMFORTABLE PRICE “,and that product finalized by our
decision maker and ready to launch for market.

5. Engineer:
Engineers are the main key of the company, who are directly connected with the production, making,
handling, development ,implementation as well as innovation. Without engineers ,a firm cannot run and
get success in future .They directly connect with the upper level management as well as the low level
management ,so that they have some more responsibility compare to other employees into the
organization.

PERSONAL PLAN:

 This is basically to demonstrate the budge requirements for it’s staffs and other activities done
over the period of time and also the next five years budgets are shown in the following table.

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 Activities Year 1 Year 2 Year 3 Year 4 Year 5

Staff Salaries 100000 200000 250000 300000 350000

Transportation 20000 22000 18000 21000 23000

Maintenance 5000 7000 6000 5500 8000

Purchase new 50000 40000 45000 30000 38000

product

Extra 100000 50000 80000 70000 90000

Expenditure

 Financial Plan

Although we are treating the business as a start-up company, the financial plan is solidly based on past
performance. We have taken actual SIOT P&L income and expenses from the past three years, and
eliminated corporate overhead expenses such as warehouse and administrative costs, inventory
penalties, and corporate nominal interest. We then projected the income based on actual past
performance, and factored back in the revenue base that was relocated.

We approached the financial planning from a conservative standpoint, and based those numbers on
achievable gross margins. Also, our actual interest and tax rates will most likely be lower than the
assumed rates due to our being structured as an employee-owned corporation (ESOT).

We assume access to the start-up funding necessary to re-shape and re-build the company, and to
provide adequate initial capitalization.

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Key Financial Indicators:

Our key financial indicators are:

 Projected Sales

 Gross Margins

 Operating Expenses

 Collection Days (A/R)

 Inventory Turnover

 Start with a sales forecast. Set up a spreadsheet projecting our sales over the course of
three years. Set up different sections for different lines of sales and columns for every month
for the first year and either on a monthly or quarterly basis for the second and third years.
"Ideally we want to project in spreadsheet blocks that include one block for unit sales, one
block for pricing, a third block that multiplies units times price to calculate sales, a fourth block
that has unit costs, and a fifth that multiplies units times unit cost to calculate cost of sales

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 (also called COGS or direct costs)," Gross margin is sales less cost of sales, and it's a useful
number for comparing with different standard industry ratios."
 Develop a cash-flow statement. This is the statement that shows physical cash moving in
and out of the business. We base this partly on our sales forecasts, balance sheet items, and
other assumptions. If we are operating an existing business, we should have historical
documents, such as profit and loss statements and balance sheets from years past to base
these forecasts on. If us are starting a new business and do not have these historical financial
statements, us start by projecting a cash-flow statement broken down into 12 months. It is
important to understand when compiling this cash-flow projection that us need to choose a
realistic ratio for how many of our invoices will be paid in cash, 30 days, 60 days, 90 days
and so on. Some business planning software programs will have these formulas built in to
help us make these projections.
 Income projections. This is our pro forma profit and loss statement, detailing forecasts for
our business for the coming three years.
 Deal with assets and liabilities. We also need a projected balance sheet. we have to deal
with assets and liabilities that aren't in the profits and loss statement and project the net worth
of our business at the end of the fiscal year. Some of those are obvious and affect us at only
the beginning, like startup assets. A lot are not obvious. "Interest is in the profit and loss, but
repayment of principle isn't.
 Breakeven analysis. The breakeven point is when our business's expenses match our sales
or service volume. The three-year income projection will enable us to undertake this analysis.
"If our business is viable, at a certain period of time our overall revenue will exceed our overall
expenses, including interest." This is an important analysis for potential investors, who want
to know that they are investing in a fast-growing business with an exit strategy.

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