B2B IT Exchange Portal

By -Sachin Vyas

Agenda

IntroductionTarget marketVision, mission, objectiveProfile of Target MarketSWOT/Competitive analysisProduct and service descriptionDelivery mechanism of serviceStrategies

Execution strategyImplementation planApplication roll out plan

Market entry strategyDistribution strategyPricing strategy

Business continuity strategy

Cost modelRevenue Model Sales projections/Cash flowBusiness PartnerTeamChallengesCritical success factorFuture scope

Introduction

Value proposition: Facilitating SME’s in IT sector for bidding for contracts in a transparent manner.Idea : SME’s with potential to deliver good quality of product and services lack exposure and opportunities to demonstrate their potential.

Target market

All SME’s in IT/ITES sectorProject ownersInvestors – VC’s

Vision, Mission, Objective

Vision: To become most preferred IT exchange portal in India.Mission:

To ease all SME’s to find business opportunity in IT sector To enable Project owner to find right business partnerTo empower Indian IT companies to emerge as big enterprises.

Objectives: To grow by 15% every year.

Profile of Target Market

SME definition: A Typical Indian Software SME would have Turnover <1000.million INR ; Staff Strength < 500.IT Industry contribution to GDP: 5.4 %India’s IT export and its contribution to GDP has increased over the past years but SMEs’ share in the entire IT export in India is only 30 percent.Over 80% of IT companies in India are SME.

SME segment analysis

CharacteristicsThriving on single contract or client. Desire to go global, but lack the vision or/ and adequate exposure. Missing entrepreneurial mindset.

Looming problems in SME

Lack of financial patronage Lack of Market Intelligence Limitations to get client /prospective partner

SWOT Analysis

OpportunitiesIndian IT sector is growing at 20% every yearOver 80% of IT companies in India are SME’sThere are lot of IT opportunities in government sector

StrengthFirst mover advantage In-depth understanding of IT business process and e-governanceSolution accelerate bidding process and search time to find right business partner

WeaknessProject owner may find it difficult to trust unknown vendorsGovernment spending on IT projects is very lessCompanies may hesitate to share their projects details in public forum

ThreatsPrice wars among service providersEmerging low cost nations like chinaIn economic downturn revenue earned by “Transaction fees” may get affected.

Product/Service description

Services offered:Core business service: Profile managementBidding serviceContract ManagementAdvertisements

Key featuresCustomizable search for service provider Industry news and updatesAbility to customize your preferred vendors so that RFQ’s are notified to preferred vendors

Delivery mechanism

Strategies – Execution strategy

Implementation road map

Current position: We have completed POC. We are all set to start the development of B2B IT Exchange portal.In house development based on RUP methodology.Implementation estimates:

Analysis and Design: Estimated effort : 4 man monthImplementation: Estimated Effort : 12 man monthsTesting: Estimated Effort : 6 man months

Support strategy:Free/Full 24*7 supports for during licence period.Our web portal will have section for corporate user to log complain for any issue with service quality.

Application rollout plan

Strategies – Market entry strategy

Distribution strategy: How to reach customers?

Advertisements Conducting seminarsEnrolling in various B2B online e-market place like Trade India, India MART, INDWEB, Trade-ball.com.

Pricing strategy: High value and medium priceInitial pricing offers:

Profile management service+ 3 months of Bidding service free.During trial period of Bidding service transaction fees would be 0.2% instead of 0.5%.Profile management service+ 50% discount on Advertisement fees.

Strategies – Business continuity strategy

Our internal cash flow will fund all future growthUp gradation of service offerings frequently based on customer requirement and global economic position of IT industry.Initial IT investment will be 40-50% of total cost but in subsequent year it will come down to 25-35%.Cost will reduce by 30-40% in second year and our internal cash flow will fund our all future growth.

Cost Model           

Year   Cost Component Cost per Month (INR) Annual Cost (INR) Total Cost (INR)

           

2010 Variable Cost Resource Cost 253000 3036000 10011000

    Rent of Office 100000 1200000  

    Miscellaneous Cost 100000 1200000  

   Marketing and Advertisement expenses 100000 1200000  

  Fixed cost        

    Infrastructure Cost   2375000  

    Contingency Buffer   1000000  

           

2011 Variable Cost Resource Cost 204000 2448000 5748000

    Rent of Office 100000 1200000  

    Miscellaneous Cost 75000 900000  

   Marketing and Advertisement expenses 100000 1200000  

           

Revenue Model

Subscription fees- Differential pricing

SP1 - Profile management service, Mandatory service Rs. 9999 per license valid for 2 years.

SP2 - Profile management service + Bidding services Rs. 5000 additional to fees for SP1.i.e Rs. 14999.SP3 – Contract management: Optional, Rs. 3000 additional to price for SP1 and SP2.

Transaction fees –Variable pricing

Project bidding transaction fees.0.5% of project cost.70% of transaction fees to be borne by Service provider and 30 % of transaction fees to be borne by project owner.

Advertisement fees - Fixed price

Additional to Subscription feesApplicable to Project owner/Service provider.

Sales projections Detailed Cash Flow

Business Partner

NASCOMM: NASSCOMM is also working for the same goal, of promoting SME’s IT companies.

Creating SME oriented CIO forum from developed markets to facilitate B2B interactions. To promote the SME participation by pitching at the policy level for Government contractsInitiating mentoring programs in association with large companies.

SIDBI: Small Industries Development Bank of India - only large size dedicated organization for the promotion of Small Scale Industries and Medium Enterprises. NFSIT: National Venture Capital Fund for Software and IT industry has been set up by SIDBI and is being managed by SIDBI Venture Capital Ltd.

Team

Product Development team

6 web developer4 testers1 business analyst1 marketing manager1 project manager4 sales executive

Management teamCEO : Sachin VyasCFO: Hitesh LadCMO : Cheerag MarfatiaCIO: Sarika Khamkar

Challenges and Critical success factor

ChallengesSecurity and confidentiality of data TrustResilience Quality of service

Critical success factor

Right owners Right governance Full range of services

Future Scope

Exploring opportunity in International marketTo emerge as business consultant in contract managements.

Thank you