Running software business in Plc
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This document discusses running a software business in a publicly listed company. It introduces Solteq Plc, which provides digital services and software solutions. The business focuses on a services model, delivering projects and continuous services. Key processes discussed include sales, software delivery, resource management, and offering development. Tools mentioned that are important for supporting these processes include a CRM for tracking sales opportunities, forecasting revenue and costs, and monitoring resource utilization. The presentation emphasizes that successful software businesses require strategic vision, excellent products/services, and systematic execution of core processes like sales, delivery, and resource planning.
Running software business in Plc
- 1. RUNNING SOFTWARE BUSINESS IN PUBLICLY LISTED COMPANY JANI KYKYRI
- 2. AGENDA TODAY’S TOPICS ▸ Bio ▸ Solteq Plc introduced ▸ Different business models ▸ Key processes ▸ Tools
- 3. BIO JANI KYKYRI ▸ 15 years experience selling, delivering software & services in mid-sized & large technology companies ▸ Companies: Landis+Gyr Oy, Samlink Oy, Digia Oyj, Yomi Oyj & JYU ▸ Currently leading Customised Solutions team @ Solteq Oyj - 27 experts and growing ▸ Targeting to recruit 7 developers during 2018! 1995 2000 2005 2010 2015 2018 Started MSc @ JYU First SW developer job Graduated MSc @ JYU Started as Project Manager Account Manager Sw Business Portfolio Manager Sw Business Portfolio Management for multisite teams Innovation Management Technology Transfer Business Unit management Services Product Management Business Unit management
- 4. Helsinki, Jyväskylä, Tampere, Kuopio, Seinäjoki, Stockholm, Karlstad & Wrocław, Copenhagen & Oslo 63M€ Revenue 600 Employees 5 Countries We are a Nordic IT provider and software house that specialises in digital customer engagement.
- 5. We provide digital services from insight to implementation and beyond. World-class digital solutions to deliver outstanding customer experience SAP,NAV etc. POS, LS Retail, smart retail & hospitality solutions eCommerce, PIM, consulting, Mobile & web services Digital marketing, UX, design, loyalty BI, Utilities sector, AI, IoT Business solutions Digital engagement Store solutions Digital commerce ERP Incubator AI, Blockchai VR/AR, Robotics
- 6. DIFFERENT BUSINESS MODELS MOST COMMON SOFTWARE BUSINESS MODELS ▸ B2C ▸ Licence based, Software as a Service, Transactional, Advertising ▸ B2B ▸ Product based business (traditional license, SaaS, …) ▸ Mixed ▸ Services business WE FOCUS SERVICES BASED SOFTWARE BUSINESS
- 7. SERVICES BUSINESS “SELLING EXPERTISE” ▸ Typical delivery models ▸ Project - somewhat fixed scope to deliver agreed functionality or service ▸ Continuous service - either agile development or maintenance services ▸ Consulting or resource hiring - expertise on hire ▸ Business models ▸ Time and material, based on effort estimations - lowest risk and margins ▸ Fixed fee - potentially higher margins, but also higher risk ▸ Above mentioned with Service Level Agreement (penalties & bonus) ▸ Contracting e.g. business design, software design, development, testing, maintenance, & operations to solve customer problems with software solutions WAYS TO IMPROVE MARGINS: BUZZ, QUALITY SYSTEM, SECURITY FOCUS, PROMOTING DOMAIN SKILLS, CERTIFICATIONS,,..
- 8. SERVICE BUSINESS “MIXED” - SELLING EXPERTISE AND PRODUCT Different ways to specialise and try gain better margins: ▸ Specialise in selling third party product, and customise it e.g. Magento web shop based deliveries ▸ Develop own product, license it with customisation - “Develop once, sell for many” ▸ Sell 3rd party licenses and improve margins with license revenue DESPITE POTENTIALLY BETTER MARGINS SEVERAL PITFALLS: POOR PRODUCTS, EXPENSIVE LICENSING, POOR SUPPORT, …
- 9. THERE IS ONLY TWO FUNDAMENTAL PROBLEMS IN B2B SOFTWARE BUSINESS: 1. SALES (LACK OF IT) 2. DELIVERING HIGH QUALITY SOFTWARE PROFITABLY AND ON TIME USUALLY COMPANIES ARE STRUGGLING WITH BOTH Vanha viidakon sanonta SOFTWARE BUSINESS
- 10. SERVICES BUSINESS KEY PROCESSES TO MAKE IT PROFITABLE Process Description KPI Sales Customer acquisition, creating leads, proposal and quoting. Closing deals. Leads (nbr) Opportunities (eur & nbr) Offers (eur & nbr) Order base (eur) Delivery Software and service delivery process, developing high quality solutions. Can be lean, agile, or traditional. Invoicing, escalation management and delivery approval. Realised hours Revenue & costs (profit) Average hour price Quality metrics Resourcing & recruiting Planning and implementing service and project resourcing with skilled experts onetime. Transferring people and competences efficiently to new domains. Individual billability rate (%) Unit level billability (%) Attrition rate (%) Offering development Creating productized services offering to improve competitive position by increasing value of services or reducing cost of delivering it. Reusable components Productised standard services Product based sales
- 11. TOOLS
- 12. TOOLS EXAMPLE TOOLSET NEEDED TO SUPPORT PART OF PROCESSES
- 13. TOOLS TRACKING SALES FUNNEL WITH CRM OPPORTUNITYLEAD OFFER ORDER
- 14. TOOLS FORECASTING REVENUE AND COSTS ▸ Usually 12 months running forecast of revenue and costs on monthly level ▸ Most important things to influence estimates: Order base, identified sales cases, delivery quality (reclamations), subcontracting, poor effort estimations, …. 0 35 70 105 140 APRIL MAY JUNE JULY Order base Identified sales New sales Budget target
- 15. TOOLS RESOURCE UTILISATION & FUTURE ALLOCATIONS ▸Team billable work utilisation and optimisation important to maintain profitability ▸Future resource allocation estimates and scenarios provides input for on time recruitments
- 16. TOOLS EXAMPLE OF SOFTWARE DELIVERY MODEL
- 17. SUMMARY RUNNING SOFTWARE BUSINESS IN PLC ▸ Excellent strategy, vision, products, services and people is needed —> But without systematic execution business won’t bloom ▸ Technologies change over years and software is always implemented by talented individuals - but on high level business steerings happens around the same couple basic processes ▸ You need to master a lot of more that just coding e.g. basics of corporate finance, SW development processes, sales support, team work, …