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5-Year Plan for Expanding Into Managed IP Infrastructure Services
10 March 2006
The information provided in this business plan is confidential. Please do not disclose it to anyone without checking with me first. Thanks.
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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Key Assumptions
1. This company is currently successful in selling and supporting computer HW/SW
2. This company possesses a long list of repeat corporate clients
3. This company wants to improve her profitability through an entry into the more lucrative and rapidly-growing local and regional market for high-quality IP infrastructure
Summary … Company … Services … Market Analysis … Strategy … Financials
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Managed IP Infrastructure Services
A provider of secure, managed, guaranteed-high-availability IP infrastructure and applications
Focused on the financial, telecom and oil & gas sectors
Sales, support and training presence in Lahore, Karachi, Islamabad, Dubai, Dhahran and Beijing
Summary … Company … Services … Market Analysis … Strategy … Financials
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Mission
Planned and sustained growth in:
Number of professionals
Revenue per professional
Summary … Company … Services … Market Analysis … Strategy … Financials
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Mission
Build lasting relationships with our clients by consistently exceeding their expectations
Summary … Company … Services … Market Analysis … Strategy … Financials
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Key Objectives
1st Year 5th Year
Number of Professionals 15 177
Revenue (million PKR) 38 1,841
Summary … Company … Services … Market Analysis … Strategy … Financials
NOTE: These objectives do not assume the offering of managed services
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Strategy
SalesDevelop partnerships with Cisco and NCR; They will do the sales for us.
SectorsFocus on FDI-rich sectors: telco; financial services; oil & gas
Cultural Focus Speed through innovation; Craftsmanship
HR Retention Ensure professional growth
HR Growth Stand-alone training center; Dubai center
Summary … Company … Services … Market Analysis … Strategy … Financials
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Main Risks
Short Term None
Long Term Growth in the number of professionals
Summary … Company … Services … Market Analysis … Strategy … Financials
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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Key Assumptions
1. This company is currently successful in selling and supporting computer HW/SW
2. This company possesses a long list of repeat corporate clients
3. This company wants to improve her profitability through an entry into the more lucrative and rapidly-growing local and regional market for high-quality IP infrastructure
Summary … Company … Services … Market Analysis … Strategy … Financials
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Growth Path
Dubai
TRAINING
CENTER
Dhahran Beijing
Lahore
KarachiIslamabad
Summary … Company … Services … Market Analysis … Strategy … Financials
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Growth in the Number of Sales/Engineering Professionals
1st Year 2nd Year 3rd Year 4th Year 5th Year
Lahore 10 20 30 40 50
Karachi 3 20 30 40 50
Islamabad 2 4 6 8 10
Dubai - 4 8 10 12
Dhahran - 2 3 4 5
Beijing - 5 20 30 50
Total 15 55 97 132 177
Training Center 2 4 6 8 10
Summary … Company … Services … Market Analysis … Strategy … Financials
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Start-Up Expenses
Cash required for first year’s operations:PKR 20 million
Net expenses for running first year’s operation:PKR 3 million
Summary … Company … Services … Market Analysis … Strategy … Financials
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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Service Description
We will provided services for the deployment, monitoring, maintenance, and up-gradation of IP infrastructure
The reliability of our deployments and speed of our execution will be our hallmark
Our focus will be on IP infrastructure and services for the financial, telecom and oil & gas sectors
Summary … Company … Services … Market Analysis … Strategy … Financials
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Deployment/Maintenance, then Managed Services
Our initial focus will be on deployment, maintenance and network/information security
Later we will move into managed IP services. Managed services’ customers want service providers to not only deploy, but also manage their network infrastructure/applications (e.g. VPN, IP telephony) to reduce costs and improve reliability as well as security.
Summary … Company … Services … Market Analysis … Strategy … Financials
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List ofServices
LAN WAN Enterprise Networks Core Networks
Wireless Networks Fiber Optic Networks VPN IP Telephony
IP Contact Centers Video Conferencing Network Security Monitoring Information Security Management
Summary … Company … Services … Market Analysis … Strategy … Financials
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Competitive Comparison (1)
The competition comes in several forms:
No competition at all:
– In-house team
– Most significant
– Disadvantages: Inefficiency; High employee turn-over
– Our advantages: Focus; Speed; Cost; Long-term support
Summary … Company … Services … Market Analysis … Strategy … Financials
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Competitive Comparison (2)
Large, multinationals (e.g. NCR):
– Disadvantages: Generalists; They drive their clients; Cost; Lack of innovation
– Our advantages: Specialists; Innovative solutions; Speed; Managed services
Summary … Company … Services … Market Analysis … Strategy … Financials
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Competitive Comparison (3)
Local companies
– Not many, yet! Unable to meet even the local demand
– Disadvantages: Unplanned growth; Having problems in attracting/retaining talent; Focus on low-end deployments; Lack of control on cost/schedule/quality
– Our advantages: Sector focus; Methodology fine-tuned for speed; Focused on attracting/retaining talent; High-end services (managed, security); Strong project mgmt.
Summary … Company … Services … Market Analysis … Strategy … Financials
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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The Business Opportunity
Spending on IP infrastructure is increasing in Pakistan as well as the surrounding region (e.g. look at Cisco’s sales-team growth in Pakistan)
The convergence of voice and data networks requires corporate data networks’ up-gradation
The difference between supply and demand for IP services is widening with time
Summary … Company … Services … Market Analysis … Strategy … Financials
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Summary
We will be focusing on medium to large organizations
The reliability of our deployments and speed of our execution will be our hallmark
Our focus will be on IP infrastructure and services for the financial, telecom and oil & gas sectors
Summary … Company … Services … Market Analysis … Strategy … Financials
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Market Segmentation
Focused on long-term ROI. Security is a key focus area.
Medium-size Organizations
Large Organizations
Interested in the lower costs offered by managed services.
Summary … Company … Services … Market Analysis … Strategy … Financials
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Types Our Contracts
Summary … Company … Services … Market Analysis … Strategy … Financials
We will be responsible for the deployment, 24x7x365 performance and security monitoring, maintenance, up-gradation, and meeting SLA targets.
Turn-Key ProjectsManaged ServicesWe will deploy and then handover the system to the customer. We will also provide on-demand maintenance.
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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Why Pakistan?
The IP infrastructure is growing at a brisk pace in Pakistan as indicated by Cisco’s order-of-magnitude sales-force expansion
Same is happening in the region surrounding Pakistan.
The number of quality EE/TE/CE graduates is set to get a boast due to the launch of new programs at universities like NU (Lahore, Karachi, Islamabad, Peshawar), LUMS, and others
Summary … Company … Services … Market Analysis … Strategy … Financials
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Selling Our Services
Our services will be sold mainly on a word-of-mouth basis, with relationships with our partners/end-users and past experience being the important factors
The key to a favorable decisions made by our initial clients and partners will be based the trust in the professional reputation of the company
Summary … Company … Services … Market Analysis … Strategy … Financials
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Sales Strategy
We will start the sales effort in Lahore, followed by Karachi, Islamabad, Dubai, Dhahran, and finally in Beijing
Our initial focus will be on building strong partnerships with companies like Cisco and NCR. They will play a key role in brining us high-value customers.
The emphasis in Dubai, Dhahran, and Beijing will be on finding local partners of high repute along with leveraging our relationships with Cisco/NCR, etc.
Summary … Company … Services … Market Analysis … Strategy … Financials
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Sales Supplements
The business expansion will begin with additions to the corporate Website establishing the positioning, followed by a printed brochure
Summary … Company … Services … Market Analysis … Strategy … Financials
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Certification/Partnership Target
Year Certification/Partnership
1 ISO9001:2000
1 Cisco Premier Partnership
2 Cisco Silver Partnership
3 Cisco Gold Partnership
Summary … Company … Services … Market Analysis … Strategy … Financials
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Revenue Growth Per Professional
Our key corporate goal is to systematicallyincrease the overallper (sales/engineering) professionalproductivity
0
4
8
12
1 2 3 4 5
Year of Operation
Targets for Revenue-per-Professional (Million PKR)
+20%
+20%+20%
+20%
Summary … Company … Services … Market Analysis … Strategy … Financials
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Revenue Forecast(million PKR)
0
500
1,000
1,500
2,000
1 2 3 4 5Year of Operation
NOTE: This forecast do not assume the offering of managed services
Summary … Company … Services … Market Analysis … Strategy … Financials
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Overview
Executive Summary Company Summary Services Market Analysis Strategy & Implementation Financial Info
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Forecasts:Revenue, Pre-Tax Profits
-500
0
500
1000
1500
2000
1 2 3 4 5
Year of Operation
Mill
ion P
KR
Summary … Company … Services … Market Analysis … Strategy … Financials
NOTE: This forecast does not assume the offering of managed services
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Investments
NPV @ a discount rate of 17% PKR 247 million
1st Year
PKR 3 million
Returns Over Five Years
Summary … Company … Services … Market Analysis … Strategy … Financials
NOTE: These numbers do not assume the offering of managed services
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Financial Worksheet
RevenuePakistan 5x15x0.5 38 6x44 264 7.2x66 475 8.6x88 757 10.4x110 1,144Overseas 6x11x0.5 33 7.2x31 217 8.6x44 374 10.4x67 697TotalCapEx for Training Lab/ Workshop EquipmentPakistan 5 5 5 5 5Overseas 5 5 5 5TotalCost of Workforce (salary, rent, utilities, computing, travel, support-staff)Pakistan 0.6x15 9 0.72x44 53 0.864x66 57 1.032x88 91 1.248x110 137Overseas 1.44x11 16 1.728x31 54 2.064x44 91 2.496x67 167TotalCost of Equipment Sold (70% of revenue)Total 26 208 485 792 1,289TotalPre-Tax Profit
Operating Margin
NPV @ 17%
148
All currency figures in PKR millions
9 69 111
4th Year 5th Year
238
1st Year 2nd Year 3rd Year
485
38 297
5 10
792 1,28926 208
(3)
-7% 4% 13%
10 87
13%24713%
182 305
692 1,131 1,841
10 10 10
The number ofprofessionals isshown in bold
Start-up year’sramp-up discountis shown in italics
NOTE: This worksheet does not assume the offering of managed services
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The Training Center
A non-for-profit, stand-alone, self-sustaining operation in Pakistan – focused on the training of networking professionals for our staff as well as others
Training will be provided by full-time trainers as well as members of our installation/maintenance engineering staff
Joining the Cisco Networking Academy program is an option as well. It will, however, require the registration of a separate non-profit entity.