Software Business with Business Software Guest lecture 2016-01-22 - - PowerPoint PPT Presentation

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“Software Business with Business Software”

Guest lecture

• Dr. Bernhard Blüthner

SAL T Solutions GmbH Dresden-M ünchen-Würzburg General M anager

2016-01-22

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Context

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Software Business with Business Software

n SALT Solutions at a glance n What is Business Software? n Key Factors for successful Software Business with Business Software n Service Offerings (Revenue Sources) n Retail Market – typical Niche Market n SALT Solutions Offering for the Retail Market n How to make Software Products for Niche Markets n How to organise a Software Company for Business Software

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SALT Solutions: Facts and Figures

Profile

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Founding 06/2002

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Locations Dresden, Hamburg, Munich, Wuerzburg

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Employees 395 (full time)

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Equity Equity ratio 5,8 Mio. Euro 40 percent

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General Managers and Associates

• Dr. Bernhard Blüthner

Dieter Heyde Markus Honold

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Business Areas Software for industry and commerce

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Subsidiary WSW Software GmbH

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Joint Venture KNAPP IT Solutions GmbH 34,6 36,6 42,6 46,7 52,8 2012 2013 2014 2015e 2016p Sales Development (in Mio. Euro)

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Referenzes

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What is Business Software?

Business software or business application is any software or set of computer programs that are used by business users to perform various business functions. These business applications are used to increase productivity, to measure productivity and to perform business functions accurately.

Subjects for Business Software are Business Processes Typical Categories of Business Software:

• ERP-Software (Enterprice Ressource Management…)
• CRM-Software (Customer Relationship Management…)
• Controlling-Software
• Planning-Software
• SCM-Software (Supply Chain Management…)
• Accounting Software
• POS-Software (Point Of Sale…)

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Characteristics of Business Software

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Decisions for business software are very important for each customer

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Business software is a long-life product. More then 10 years…

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Business software has a strong impact on the efficiency of business processes

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Most implementations are a mix of standard and taylormade components

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…Invalid without Support!

Business solutions often are “heavy weighted solutions!”

Lot of money, lot of impact, lot of risk…

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Key Factors for successful Software Business

n Strategy n Business Model n Service Offering n Investment Capital n Team

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Strategy and Business Model are important… …but may be the market knows everything better!

Strategy is…. what I see when I look

• ver my shoulder!

(Dieter Ammer, former CEO of Tchibo)

Feel free to modify your strategy / business model!

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Imagine…

The Perfect Business Software

One Fits ALL !!!! One Fits ALL !!!

You have: …the perfect idea …a first customer …a small team And you will start SOFTWARE BUSINESS WITH BUSINESS SOFTWARE!

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Service Offering Choose Your Business Area!

Business Software = Software for Business Processes

n Accounting n Planning n Sales n Warehouse Management

Business Processes are Domain Specific. Domain = Business Area

n Industry n Retail n Procurement n Controlling n Transportation Management n … n Wholesale n Logistics Providers

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If you have an investor (or looking for)…

…and you have a great idea… …and you see a mass market… …and you think you are the first one…

Try it!

BUT:

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If you fail, so what, it was the money of the investor, not your`s.

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If you succeed, …it is the company of the investor, not your`s!

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If you don`t have an investor… 4 Possibilities for Service Offerings with Business Software

1. Platform-Based Customizing-Projects (Platforms are SAP, Microsoft Dynamics, Salesforce…). Partnership to the platform vendor is essential, that is the mainstream of the market today. Well structures market, many customers, many competitors. Investment

• nly in marketing and training, references are important.

2. Software-Development (Tailormade Solutions). Very interesting, needs technological and business process competences as well. Sadly there is no “market”, but projects are

• ccasionally possible (“Competence Selling”). No invest, but need of “lucky chances”

3. Own products for special needs (Niche-Products, Niche-Markets). Special expertise in the niche is essential. Medium invest for the project kernel (projects helps to extend your product and your skills). “Ramp Up-Customers” needed. 4. Professional Support (for the 3 possibilities above). Investment in training and some support tools. References needed. Selling support without project very difficult

Mass markets Customers, but no “market” Niche markets

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Own Products for Niche Markets Revenue model (5 revenue sources)

Revenue source Calculation Benefit for the customer The product itself (Standard software) Licence fee (flat rate, per user, per location…); Right to use the software “as is” Implementation project Daily Rate or fix project price Software vendor helps to implement the product Software Update Service Percentage rate from licence fee Conformity to law, new features Support (Standby) Flat rate, depending on Service Level Agreement (SLA) Contractually guaranteed Standby times Support (Incident Management…) Hourly rate Professional support Project Operations

If your company has 30 employess, you have to make 3.000.000 € revenue every year!

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SALT Solutions GmbH Business software for retail companies – our “niche market”

Warehousing Forewarding Point of sale Replenishment Master Data Promotions Planning Controlling Procurement

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SALT Solutions GmbH alexa Retail System for Omnichannel Commerce

n SALT Solutions` own product for the niche market “Retail”

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Preferred sub domain is:

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Fashion Retail

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Germany / DACH

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Revenue between 50m an 500m € p.a.

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Pure retailers or vertical retailers

Only 150 “target accounts” in this market! very special needs; the big platform vendors can serve only with expensive customizing; but our product ca be delivered “out of the box”

15:35

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Big Picture alexa

Platform Technology

• Java
• Oracle
• IBM Cognos
• Microsoft SQL
• Microsoft .net
• iOS

Partner Products

• Checkout System
• Financials
• DMS
• EDI

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Business processes in retail companies – supported by alexa

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Standardised alexa - features for individual requirements

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Alexa RMS (central module) – look&feel

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You can only control, what you can measure… alexa Retail Controlling System

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Mobile components – for stores and logistics

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Partner products – Checkout-Software for retail stores

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Professional support – along the ITIL-Guidelines (ITIL = IT Infrastructure Library – an international standard)

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How to implement alexa in a retail company (6…9 month)

Salt Solutions Product Matrix

Historical growth of product matrix (Frameworks, Products, Domains)

Domain 1 „Retail“ Sub-domains:

• Fashion (Textilien)
• Nonfood (Hartwaren)
• Food (Lebensmittel)

Domain 2 „Logistic Providers “ Sub-Domains:

• Warehousing Providers
• Forewarders

Domain 3 „Industry “ Sub-Domains:

• SAP-minded
• NonSAP

SALT-Framework „Business Applications“ (Java-based) SALT-Framework „Business Applications“ (Microsoft.net-based) SALT-Product „alexa RMS“ (Retail Core Solution) SALT-Framework „Mobile Applications“ (Apple iOS-based) SALT-Product „LogBase“ (Warehouse/Transpor t) SALT-Product „SOLO“ (mobile Selling, Buying) 3rd Party Frameworks „Business Intelligence“ (Microsoft, IBM) SALT-Product „alexa RPS“ (Retail Planning) SALT-Product „alexa RCS“ (Retail Controlling)

• alexa RMS, RPS, RCS
• alexa LOG (= LogBase)
• Solo Buy
• LogBase classic
• LogBase on Demand
• LogBase classic
• LogBase on Demand
• SOLO Sales

2002 2005 2012 2013 2007 2005 2009 2005

Consulting – Integration - Support

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Some challenges, when you make own products for niche markets

You need an organisation like a midsize company, also for small business software products!

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Management: Strategy, key accounting, human ressources, partner management… and all tasks without a competent person…

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Marketing&Sales: sales force, indoor service, marketing (www, print, events…)

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Product manager: Feature planning, release planning, presales consulting

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Product development: software development, quality assurance (Test)

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Consulting / Project Management: …

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Support: Hotline, incident management,

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Administration: Billing, encashment, accounting, payroll… …but on the beginning you don`t need one (ore more) dedicated persons for each of these roles… …with 30 employees you can make a good product and good profit!

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The reference trap

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A customer don`t want to be the first user of a new product

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You need references – the more the better

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Sometimes you must “buy” a referenze – with an “unbeatable” price offer

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When you have some customers, you can increase your market footprint and your product portfolio:

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Old customers – new products

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New customers - old products

Some challenges, when you make own products for niche markets

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Integration is more than software

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Management level: Key accounting!

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Operating department level: establish a personal continuity (Project / support)

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IT department level: conformity to IT-Processes (ITIL)

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Technology level: Interfaces to neighboring systems,

Some challenges, when you make own products for niche markets

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Some challenges, when you make own products for niche markets

The technology trap….

n When you begin to build up the product kernel, your technology stack is up to date. n When your product is mature (after 5+ years), your technology stack is a little bit “old” n When your product has a serious position in the market, your technology will be so old that it has

to be changed! But your Revenues from the past are invested into product features, marketing, sales, organisation…You need fresh money to redesign your product!

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Some challenges, when you make own products for niche markets

The empathy trap….

n Software engineers are competent in handling code / systems / technology n But “handling” of people? n People with other skills, midsets, objectives…??? n No business without empathy to the customer n the customer cannot proof the result of your project before will sign the contract, he can only

proof YOU!

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Summary

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Business Software makes the economy running!

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Innovations are process driven AND technology driven!

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Business software needs technology experts as well as business process experts!

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It is possible to build up a software company without investors!

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Business Software without support is invalid!

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This business is people business. The customers must trust you – they cannot proof your products before they buy, they only can proof YOU!