serviceconnect ipo strategy
TRANSCRIPT
ServiceConnect IPO StrategyKARLA F-G |JORGE AGUERO | SHIVAM VAKIL | ANAELENA LOPEZ
Overview
Summary of core business areas Recommendation Implementation Estimated Costs Conclusion
Core Areas
Corporate Governance and Compliance Information Technology Accounting and Finance Organizational Structure
Corporate Governance and Compliance
Executives include CEO Job Stevens, CIO Bill Khan, and CPO Matt Grant
Decision power is heavily centralized in CEO There is no current board of directors There is little to no internal audit on CEO Only one hardware supplier which imposes risk
Information Technology
IT controls out of date No formal documentation of disaster recovery plans No concise knowledge or IT risks and threats 2 separate networks
Internal network Customer-facing network
Accounting and Finance
One person in charge of internal audit Lack controls around journal entries Loose regulation of expense reports, no support staff Causes delays in reports, which cause inaccurate financial
statements Lack checklist for financial close process
Organizational Structure
Four c-suite executives Succession plans only for execs No Information Security Officer No marketing department Short-staffed Internal Audit team
Advantages of going public
Access new capital and reduce debt Direct entry to capital markets Make company recognizable
brand strength and company credibility Attract, retain, and reward highly qualified employees
stock options, bonuses, other incentives
Disadvantages of going public
Expensive and time consuming Fees and periodic reporting
Loss of privacy control Reveal highly sensitive information
Can face liability issues Shareholder obligations
Lose management flexibility Board/shareholders’ approval
Recommendations
Focus on being a public company Operate like one for at least one year Fix the financial and HR problems within 6 months
Try to outperform competitors in market Growth rate, market share, sales performance, profitability Show that you are strong and stable
Create a long-term business plan Operational, financial, and strategic initiatives Covering 2-3 years before and after the IPO
Areas of Improvement
Strengthening organizational departments Creating and implementing financial controls Forming corporate structure Ensure proper IT documentation
Strengthening Organization
Invest in Internal Audit team outsourcing Staff Accounts Payable department
Invest in marketing Create succession plan for department managers Hire a Director of Security for IT department
Implementing Financial Controls
Improve expense reporting purchase third-party solution
Create controls for approval of invoices done by Internal audit team
Enforce strict rules on timeliness and accuracy of financial reports
Develop formal financial processes and documentation
Forming Corporate Structure
Choose candidates for board of directors Name a Chief Operating Officer
Will aid in implementing changes Take care of supplier relations
Enforce auditing of c-suite executives
IT Documentation
Invest in IT staff expansion Launch documentation project
Work with Protiviti IT consultants Test IT control relevance
Work with Protiviti consultants in internal audit
Roadmap of Estimated Costs
1. Departmental Upgrade -----------------$50,000 to $1million (compensation/ hiring) Internal Audit staff Board of Directors
COO Director of Security
2. One time start up Fees------------------$30,000 to $150,000 Registration Printing
Roadmap of Estimated Costs (cont.)
3. Outsourcing Costs-----------------------------------$20,000 to $80,000 Marketing Dept. Internal Audit IT support
4. Legal requirement Fees-------------------- $50,000 to $150,000 Advisors SEC Exchange Listing
Total Estimated Costs = Upwards of $1.5 Million
In Conclusion
Improvements needed in Organizational and corporate structure IT and financial controls
Solution Outsource labor for areas not in critical business functions
IT controls Internal Audit Marketing
Cost and Timeline Upwards of $1.5 Million in costs 6 - 12 months to solve critical areas 12 - 24 months until IPO
Questions?