Transcript Business Plan for A Software Quality Assurance Company

QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
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QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
SPECIALISTS
CE SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY
QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE SPECIALISTS
SPECIALISTS QUALITY ASSURANCE SPECIALISTS QUALITY ASSURANCE
Business Plan for a New Software
Quality Assurance Company
28 August 2005
The information provided in this business plan is confidential. Please do
not disclose it to anyone without checking with us first. Thanks.
Innofy Software Labs: Quality Assurance Specialists
Personal Goal
 To build an effective and lasting software
quality-assurance organization
 To found it on a set of shared professional
and social values
Innofy Software Labs: Quality Assurance Specialists
Values
 Make & meet commitments
 Recognize accomplishment
 Communicate without fear
 Play to win-win
 Require quality beyond
customer expectations
 Deliver more than what
was promised
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 Improve continuously
 Teach & learn from each
other
 Act with a sense of urgency
Think & act like an owner
Keep a balance in your life
Have fun
Give back to the community
Innofy Software Labs: Quality Assurance Specialists
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Innofy Software Labs
Quality Assurance Specialists
 A provider of quality assurance services that cover
the complete software life-cycle
 Focused on the financial and telecom domains
 Headquartered in Dubai, Innofy will have sales
and support offices in Singapore, Washington and
London, and engineering centers in Dubai,
Lahore, Karachi and Islamabad
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Mission
Planned and sustained growth in:
 Number of professionals
 Revenue per professional
 Profits per professional
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Mission
Build lasting relationships with our clients
by consistently exceeding their expectations
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Key Objectives
1st Year
5th Year
Number of Professionals
50
800
Revenue
US$630,000 US$47,430,000
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Strategy
Sales
Sell to Asian operations of US businesses;
Leverage them to get work from their parents
Domain
Focus on no more than two biz domains
Cultural focus Speed through innovation; Craftsmanship
HR retention
Ensure prof. growth; Share ownership
HR growth
Separate training institute; Dubai center
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Main Risks
Short Term Sales
Long Term Growth in the number of professionals
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Functional Structure
Corporate
Lahore
Singapore
Dubai
Institute
Washington
London
Islamabad
Karachi
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Growth in the No. of Professionals
Corporate
Engineering Lahore
Sales &
Support Singapore
Sales &
Support Washington
Engineering Dubai
Sales &
Support London
Engineering Islamabad
Engineering Karachi
Total
Institute
1st Year
3
2nd Year
4
3rd Year
6
4th Year
8
5th Year
10
42
2
3
-
96
3
10
15
169
4
20
35
317
5
30
45
490
5
40
50
-
2
-
3
25
-
4
60
45
5
100
100
50
5
130
8
262
11
513
14
800
17
Legal Structure
 The Innofy family will consist of six
sister companies: Two registered in
Pakistan; One each in Singapore,
US, UAE and the UK
 Initially, all six will have the same
Board of Directors
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Start-Up Expenses
Total start-up expenses (for the Corporate, Lahore
engineering center, and the Singapore and
Washington sales and support offices) for the 1st
year, including:
 Short-term assets (computers, UPSes, generators,
furniture, etc.)
 Cash required to handle the operations
US$1,362,000
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Service Description
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We will provide quality assurance services
covering the complete software life-cycle
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Our distinguishing feature will be the rapid
pace of our assurance process
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We will focus on the financial & telecom
services’ domains
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Verification, then Validation
 The focus during the first three years of operation
will be on verification, i.e. testing a design against
specifications, testing code against design, etc.
 Starting in the 4th year, activities related to
validation, i.e. testing against operational goals,
will commence
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
 Request for proposal QA
 Software supplier capability assessment
 Requirements & specifications document QA
 User’s manual QA
 Operation & maintenance manual QA
 Software development plan QA
 Acceptance testing document QA
 Test plan QA
 System architecture document QA
 Detailed design document QA
 Coding standards QA
 Design compliance QA
 Black-, gray-, white-box testing
 Automated testing
 Load testing
 Integration testing
List of
Services
Competitive Comparison (1)
The competition comes in several forms:
 No competition at all:
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–
–
–
In-house SQA team
Most significant
Disadvantages: Inefficiency; High employee turn-over
Our advantages: Focus; Speed; Cost; Long-term support
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Competitive Comparison (2)
 Large, international SQA companies:
– Disadvantages: Generalists; They drive their clients;
Cost; Lack of innovation
– Our advantages: Specialists; Innovative solutions;
Speed; Fixed-cost
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Competitive Comparison (3)
 Off-shore SQA Companies
– Not many, yet!
– Low cost
– Disadvantages: Inefficient; Unfocused; Lack of
domain knowledge; Weak marketing
– Our advantages: Domain focus; Professional service;
On-site presence; Methodology fine-tuned for speed;
Partnerships with established players
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Sales Supplements
The business will begin with a
corporate Website establishing
the positioning, followed by a
printed brochure
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
The Worldwide SQA Opportunity
 Annual world-wide spending on software is
approaching a trillion dollars
 The developer to SQA-engineer ratio in
reasonable software development
organizations ranges from 3:1 to 1:2
 Estimate of the SQA component of software
development spending: $300 billion
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Summary
 We will be focusing on small to medium sized
projects
 We will be targeting businesses that are in a hurry
(2-10 week turnaround time) to get the quality of
their (or their client’s) software assured
 Our focus will be on software systems for the
financial and telecom sectors
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Market Segmentation
Software Developer
Organizations
Organizations
looking for
assistance in getting
the quality of the
software they are
developing assured
according to worldclass standards
Software User
Organizations
Organizations
looking for third
parties to assist
them in getting
software of high
quality developed
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
SQA in Pakistan: The Opportunity
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
SQA in Pakistan: 2002 Survey
Number of
Number of
Deficit*
Developers SQA-Engineers
Survey sample
394
74
57
Estimate for the
whole country
5000
939
728
* With respect to a suggested developer-to-SQA-engineer ratio of 3:1
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
SQA in Pakistan: The Opportunity
 There is a clear deficit, widening at a rate greater
than the rate of growth of the industry
 The deficit has resulted in an industry-wide
weakness in quality, and correspondingly, rates
 The local software export companies will very
much appreciate any effort that can help them
improve their rates
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Distributing Our Service
Through the
Internet
Software-to-beassured will be
delivered to one of
our engineering
centers through the
Internet, and the
results will be
delivered through
the same channel
Through On-Site
Presence
Our highly-trained
professionals will
move to the client’s
premise and assure
the quality of the
software by
following Innofy’s
high-performance
methodology
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Why Pakistan?
 Majority of SQA activities require little knowledge of
software development expertise
 The key requirements for that majority are analytical
skills and domain knowledge
 Innofy will hire persons with superior analytical
abilities and domain knowledge in her focus areas from
the engineering, banking and finance professions.
Pakistani institutions possesses a record of producing
professionals of high-quality in these disciplines
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Selling Our Services
 Our services will be sold and purchased mainly on
a word-of-mouth basis, with relationships and past
experience being the important factors
 The key to a favorable decisions made by our
initial clients and partners will be the trust in the
international experience, professional reputation
and academic qualifications of our executive team
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Sales Strategy
 Innofy will start its sales effort first in Singapore,
and then in Washington
 The focus in Singapore will be on getting projects
through established international players
 The emphasis in Washington will be on leveraging
those initial partnerships
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Certification Targets
Year Certification
1
ISO9000
3
CMM Level 3
4
CMM Level 4
5
CMM Level 5
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Revenue Growth
Targets for Revenue-per-PakistanBased SQA-Engineer (1000xUS$)
+20%
60
+10%
+30%
+20%
40
20
0
1
2
3
4
Year of Operation
5
 The key corporate
goal of Innofy is to
systematically
increase the overall
per-SQA-engineer
productivity
 An advantage of
working in partnership
with established
players is that our
rates can be the same
as those for their
in-house engineers
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Revenue Forecast
50
Million US$
40
30
20
10
0
1
2
3
4
Year of Operation
5
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Exit Strategy
• Listing on the Karachi Stock
Exchange/Regional Exchanges/Nasdaq
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Organizational Structure
The company will start with 3 key executives:
 CEO
 CTO
 CMSO
They will have a high level of international experience,
excellent professional reputation and expertise in
software development and quality assurance
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Overview
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Executive Summary
Company Summary
Services
Market Analysis
Strategy & Implementation
Management
Financial Info
Innofy Software Labs: Quality Assurance Specialists
Forecasts:
Costs, Revenue, Profits
50
Million US$
40
30
20
10
0
-10
1
2
3
4
5
Year of Operation
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Investments
1st Year
US$1,362,000
2nd Year
US$2,117,000
3rd Year
US$1,381,000
Returns Over Five Years
NPV @ a discount rate of 17%
IRR
US$4,395,000
55%
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Start-up year’s
ramp-up discount
is shown in italics
Financial Worksheet
All currency figures in Thousand US$
1st Year
2nd Year
3rd Year
Revenue
Lahore
30x42x0.5 630 36x96
3,456 47x169
7,943
Dubai
54x15x0.5
405 70x35
2,450
Islamabad
47x25x0.5
588
Karachi
Total
630
3,861
10,981
Costs for the SQA-Engineering Workforce
Lahore
20x42x0.8 672 22x96
2,112 25x169
4,225
Dubai
50x15x0.8
600 56x35
1,960
Islamabad
25x25x0.8
500
Karachi
Total
672
2,712
6,685
Costs for the Sales and Support Workforce
Singapore 120x2
240 110x3
330 100x4
400
Washington 240x3
720 200x10
2,000 190x20
3,800
London
200x2
400 190x3
570
Total
960
2,730
4,770
Costs for the Corporate Office
Corporate 120x3
360 134x4
536 151x6
906
Total
360
536
906
Profit
(1,362)
(2,117)
(1,381)
P/S
-216%
-55%
-13%
The number of
professionals is
shown in bold
4th Year
5th Year
56x317
17,752
84x45
3,780
56x60
3,360
56x45x0.5
1,260
26,152
62x490 30,380
93x50
4,650
62x100 6,200
62x100 6,200
47,430
28x315
8,820
63x45
2,835
28x60
1,680
25x45x0.8
900
14,235
31x490 15,190
70x50
3,500
31x100 3,100
28x100 2,800
24,590
90x5
180x30
180x4
169x8
450 101x5
505
5,400 170x40 6,800
720 170x5
850
6,570
8,155
1,352 189x10 1,890
1,352
1,890
3,995
12,795
15%
27%
NPV @ 17%
4,395
IRR
55%
Number of Professionals
Revenue/Professional
Profits/Professional
60
Thousand US$
800
40
513
20
0
-20
262
50
130
1
2
3
4
5
Year of Operation
-40
Summary … Company … Services … Market Analysis … Strategy … Management … Financials
Appendix: The Institute
 A for-profit organization - registered as a
separate private limited company in Pakistan –
focused on the training of SQA personnel
 Requires an initial investment of US$200,000
Innofy Software Labs: Quality Assurance Specialists
Institute's Output
Program
Short Courses
(1-10 days)
Post-BSEngg
Diploma (6 mo)
1st Year 2nd Year 3rd Year
4th Year
5th Year
100
200
400
700
1000
40
80
150
300
500
Appendix
Appendix