The proposed new long-term selling strategy aims to help Copernicus overcome challenges to future growth, diversify revenue sources, and meet its goals. The key elements of the strategy include focusing on organic growth through hiring managers to expand non-F&A services like sourcing, customer services, and knowledge services. The strategy also involves limited use of joint ventures to help pursue large contracts. This approach is expected to generate higher margins, more large contracts, and increased brand recognition, while maintaining stable costs. If successful, the strategy would help Copernicus maintain double-digit growth, expand internationally, retain its workforce, and diversify its revenue sources in line with its targets.
1. How to go global expanding our business.
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012
2. What are the aims and logic of this presentation ?
Find solutions to meet Copernicus’ fundamental aims:
Retain the highest-quality workforce
Go and grow international
Goals
Maintain the double-digit annual growth
Diversify revenue sources
Road
Analysis of company’s financial data, market analysis and presentation of the current trends that deeply
affect the demand for Business Transformation services.
Result
The idea of the new long-term selling strategy to overcome the challenges, avoid future market failure
and meet all the Goals in the most efficient way.
Warsaw, 06.06.2012
3. Agenda
Executive Summary
Company overview
Most important challenge to overcome
“Success for a company often comes from
the ability to drive the proper
transformation at critical points.
Proposed solutions to the problem
‘Business as usual’ is an expression that can
mean certain death over the long run.
Expected results
Being able to grow and reinvent offerings
is critical to addressing economic
volatility, staying on top of the market, and
remaining competitive.”
Closing remarks
Source:
(Journal of Management Excellence:
Business Transformation. March 2011)
Warsaw, 06.06.2012
4. Executive summary
1
We achieved satisfying financial results,: € 5,3 M of profit and over € 14,1 M of revenue
in 2011. and managed to accumulate considerable cash reserves in the amount of € 7,6 M.
Our profit margin, however, lies below the market benchmark.
2
So as to maintain the double-digit growth and expand our activity, we need to get more big
contracts, which means establishing long-term relationships with customers and providing them with a
wide range of services.
4
Both small&medium and large companies inceasingly depend on more sophisticated business
transformation operations such as Customer or Knowledge Services.
3
We depend on the revenues from F&A services to too great extent. On average 60 % of revenues in
2009-2011 came from F&A services. That poses risk to maintaining sustainable growth.
5
To diversify the sources of revenue we need to grow organically and form periodical joint ventures to
aggressively expand sales of non-F&A services.
6
For large corporations we provide well corporate-suited range of services thus expanding our potential
client base. So far they were our marginal clientele.
7
For our currently fundamental customer base, small and medium sized organizations ,
we implement cross-selling of our wide range of services thus retaining our current clients.
Warsaw, 06.06.2012
5. Where we ARE …
Company Overview
Karol Górnowicz,
Director of
Sales Department
… where we WILL BE
Warsaw, 06.06.2012
6. We have best-qualified workforce satisfied with the job workforce. Our products
portfolio is wide, but we focus on F&A services thus not exploiting the full capacity.
Our portfolio
of services
S&F
S&F
S&P
Sales &
Fulfillment
Sourcing &
Procurement
F&A
F&A
Finance &
Administration
5 managers
CS
Customer
Services
KS
Knowledge
Services
Our clients (revenues as % of total sales)
30 consultants
SME
5 part-time consultants
10 back-office employees
Intern. corp.
Other
How does our finances present
themselves ?
High satsifaction rate
Can we actually do better in the
coming years ?
Our people
Warsaw, 06.06.2012
7. Our satysfying financial results, on average 22 % annual growth of revenue and 25 % annual growth of
profit, contributed to over € 5,3 M of profit and over € 14,1 M of revenue in 2011. We managed to
accumulate considerable cash reserves - € 7,6 M
Our profit margin, however, lies below the market benchmark.
TOTAL REVENUES (€ k)
9500
2009
11590
2010
14134
2011
AVERAGE COPERNICUS’
PROFIT MARGIN: 37%
AVERAGE MARKET MARGIN: 42 %
TOTAL PROFITS (€ k)
Cash (as of 2011): € 7,6 M
3400
4250
5313
What is the structure of our
services ?
Is it optimal from the financial
point of view ?
2009
2010
2011
Warsaw, 06.06.2012
8. The non-F&A services constitute roughly for 10% of the total sales per annum.
This number does not match with the profit structure since non-F&A services yield
approx. 40 percentage points higher profit margin
TOTAL REVENUES (€ k)
4 x 1414
4 x 1159
F&A services yield on
average 21% profit
margin.
4 x 950
F&A
S&F
S&P
CS
KS
8484
6954
5700
2009
2010
PROFITS (€ k)
2011
1063
850
680
510
340
680
2210
Non-F&A services
yield on average 60%
profit margin.
797
638
425
531
2763
3453
1063
850
1190
1488
2009
2010
How does the market for
our services look like ?
1859
2011
Warsaw, 06.06.2012
9. We are the third biggest player in Poland in the SM sector with 17% market share. As for the
international companies, Copernicus has about 4 %. Our position in Europe is marginal.
The market for non-F&A will continue to grow much more rapidly than demand for F&A services.
MARKET SHARE OF BUSINESS TRANSFORMATION SERVICES
POLAND
SME sector (%)
In European scale our position is
marginal.
18
22
Akcentura
12
In-Fosys
Altogether we have approx. 2 %
of the market share
BT Con.
Copernicus
13
40
in SME sector and 0,5 % in
Other
SIP
17
Forecasted annual growth of the European market (%)
International corporations (%)
22
Source: IDG Research (2010)
34
15
10
20
Copernicus – 4%
24
5
F&A
10
5
S&F
S&P
Warsaw, 06.06.2012
CS
KS
10. To sum up our financial situation: we are too strongly dependent on the Finance&Accounting services.
25% annual growth in profit was mostly contributed to the non-F&A services which yet are not in our focus.
CONCLUSIONS
The dynamics of the revenue growth in the F&A services should support
the thesis of the best achievable profitability. The true is – it does not.
The non-F&A services yield more attracitve profit margines.
The growth of revenue of the F&A services is considerable
and reached about 37% per annum and can be considered as
impressive.
But the growth of the non-F&A services , considering their
profitability, is not satysfying.
SOURCES OF REVENUE
KS
CS
S&P
S&F
F&A
4 x 10 %
Considerable dependance on the F&A services
poses risk to sustainable growth.
Diversification of the sources of income has
not really been implemented
60%
2009-2011
Warsaw, 06.06.2012
10
11. What are we missing ?
Most important
challenge to overcome
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012
12. The changing business environment will imply more focus on business transformation services for the
companies. They always follow their clients.
Percentage of technology-literate
at work and as consumers
Percentage of non-technology
literate at work and as consumers
Business
as usual
New business
models
Welcome to the End of „Business as usual” !
The demographics change in consumers and the workforce alone mean
businesses have to change. Therefore there will be a rapidly growing market
for a wide range of innovative business transformation services.
Warsaw, 06.06.2012
12
13. New market conditions are challenging our company portfolio of services.
What do we have to be particularly aware of ?
Consumers
want lower tariffs, more range of products, efficient and reliable service
Employees
want job enablement, efficient tools and processes to perform their job
Shareholders
want increased revenue and controlled costs, for higher ROI
Competitors
influence marketing/cross-selling and rollout of new products/services
Arguments for new
business focus
necessity
„Business as usual”
leads to . . .
What do these changes
mean to our business ?
Warsaw, 06.06.2012
13
14. There are increased incentives for our clients to increase demand for more sophisticated services, such as CS
or KS. Companies must at the same time increase their efficiency – our Fulfillment and Sourcing Services are
well suited here.
To sum up…
Understanding end users’ needs becomes crucial.
This is achievable by expanding knowledge services, customer services.
Business needs support in implementing new business solutions.
This is why they will look for complicated business transformation solutions.
„
What do the experts say about it ?
Small or medium sized organizations have the challenge to come out with products that give the look
and feel of that of big brands. This is a big challenge. That's when alternate, outsouricng models like
customer services and knowledge management are needed.
Large corporate giants have the resources and power to maintain their hold in uncertain situations.
They will aim at maintaing their dominant position and try to keep customers attached to them. They
must optimize their core operations to drive best-in-class efficiency and help fund the transformation
and innovation.
Source: Strategic Review report by Nasscom (2010)
”
What about our long-term
targets ?
Are we likely to meet them
with certainty ?
Warsaw, 06.06.2012
14
15. The realization of our long-term targets is threatened with continuation of current sales strategy.
We need to act quickly and move towards services other than F&A.
• Maintain double-digit growth
Companies increasingly use number of outsourcing
providers , often based on targeting providers with specific
capabilities and/or reputations to specific processes and
activities.
F&A focus does not
support this target
Copernicus’
• Go and grow international
If we want to scale-up the market our services cannot be
based on headcount. It would have to go beyond headcount, on solutions that use domain expertise.
We have to aim at creating business impact.
F&A focus does not support this
target
Targets
• Retain the highest-quality workforce
At the end of the day, the concept of continuous
improvement and business-challenging projects puts the
employee first as well. She or he has the chance to
implement her or his own ideas every day.
• Diversify sources of income
As companies differentiate their outsorcing providers, it is
more complicated to maintain dynamic sales growth
without going international and keeping the best-quality
employees who constitute our competetive advantage.
F&A focus does not support this
target
F&A focus does not support this
target
What will help us meet
customers’ demand and our
long-term targets at the
same time ?
Warsaw, 06.06.2012
15
16. What shall we do to break a
potential growth barrier ?
Proposed solutions
to the problem
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012
17. Increasing revenues from the non-F&A services is our solution. It can be achieved in 4 scenarios.
The organic growth is defnitely most adequate one.
Summary from the internal research of the possible ways of change.
The advantages (+) and disadvantages (-) of the four analyzed scenarios.
Organic growth
+ We have relevant knowledge, top-notch employees and enough cash
+ We have total control over the company. Managing is not complicated
We do not need extra cash for risky ventures and change management
Joint venture
+ We have sufficient resources to meet necessary requirements
+ We brace ourselves for further market expansions
- We risk culture clash, pressure from external partners
Recommended
scenario:
Organic growth
with joint ventures
Merger
+ Possible synergy effects
- No experience with mergers
- Costly, long-lasting process
- Our employees do not like this idea and may leave us
Acquisition
+ New portfolio of valuable clients
- We do not have enough cash resources
- High investment costs with no certain success
What shall we do to
expand revenues from
each non-F&A service?
Warsaw, 06.06.2012
17
18. Sales & Fulfillment
Marketing & Promotion actions
Hire top manager in the Sales&Fulfillment field,
implement efficiency wages
Form periodical joint ventures to get big contracts
Offer our clients competetive service rates, even below bottom line
Implement cross-selling within current and new F&A projects
GANTT
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
H1
2015
H2
2015
Hire top manager
Joint venture
Competetive rates
Cross-selling
Warsaw, 06.06.2012
18
19. Sourcing & Procurement
Marketing & Promotion actions
Hire top manager in the Sourcing&Procurement field,
implement efficiency wages
Compete for the long-term government projects
Offer our clients competetive service rates, even below bottom line
Implement cross-selling
GANTT
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
H1
2015
H2
2015
Hire top manager
Long-term projects
Competetive rates
Cross-selling
Warsaw, 06.06.2012
19
20. Sourcing & Procurement
Marketing & Promotion actions
Customer Services
Hire top manager in the Customer Services field,
implement efficiencyawages Digital Content & Contents mall developed by Guild
ThemeGallery is Design
Design Inc.
Advertise job positions to fresh graduates and hire the best
Form periodical joint ventures with small businesses and start-ups
Advertise our services by off-charge cross-sold service
GANTT
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
H1
2015
H2
2015
Hire top manager
Fresh workforce
Joint ventures
Free services
Warsaw, 06.06.2012
20
21. Knowledge Services
Marketing & Promotion actions
Hire top manager in the Knowledge Services field,
implement efficiency wages
Organize or take part in cyclical business events (conferences, meetings)
Organize topic-related workshops and competitions for students
Cross-sell the services to our current and new clients
GANTT
H2
2012
H1
2013
H2
2013
H1
2014
H2
2014
H1
2015
H2
2015
Hire top manager
Business events
What are the
benefits and
costs of those
actions ?
Target students
Cross-selling
Warsaw, 06.06.2012
21
22. We have enough resources (workforce, cash and knowledge) to implement all actions. The benefits of the
recommended actions outweight the costs incurred.
Marketing & Promotion actions
+ Focus on high-margin projects
+ More big, long-term contracts
+ Increased brand recognition
+ Promotion in the European market
+ Increased information flow and
exchange of experience
+ New contracts and clients coming with
hired managers
+ Increased dependence of our clients
on wider range of services
+ Increased operational efficiency (wages)
+ New experience in business cooperation –
helpful in future global expansion
Benefits
- Extra hiring costs for the top-managers
- Extra operational risk in joint venture projects
- Short-term lossess due to discount rates
Costs
Warsaw, 06.06.2012
22
23. What can we expect to
happen in consequence ?
Expected results
d
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012
24. New selling strategy will provide more sources of revenue, attract big prestigeous contracts and create
incentives to increase operating efficiency.
Revenues
More contracts
New Revenue
Sources
Revenues
from F&A
Costs
Current
Business Model
Big, long-term
contracts
Revenues
from F&A
Efficiency wages
Economics
of scale
Stable costs
PR actions
New
Business Model
Diversification & Sustainability of growth
24
More clients
Stable source
of income
Fixed HR
expenses
Preperation of
new contracts
Cross-selling
Warsaw, 06.06.2012
Efficiency
Advertising
25. At the same time, the organic financial growth must be supported by the substantial growth in the
workforce.
+200%
105
Number of
full-time
consultants
More projects in real terms
More long-term services
More demanding clients
More high-margin projects
35
More ambitious tasks
More information flow
2012
2015
Going global & Retention of employees
Warsaw, 06.06.2012
26. Our new strategy realizes
all company’s targets
Closing remarks
d
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012
27. There were four goals of this presentation concerning the performance of the Copernicus Consulting Inc.
All four goals have received total attention
and were provided with appropriate solutions
Focus on high-margin
projects
Maintain the
double-digit
growth
More big projects
Retain the
highest-quality
workforce
joint ventures
More orders from large
Increased distribution
corporations
of revenue sources
on new services
More experience from
Extra ideas from young employees
Cross-selling strategy
Clients’ dependence
New trade experts
Diversify
revenues
sources
Increased brand recognition
Go and grow
international
Aggressive growth of the
workforce and portfolio of projects
Warsaw, 06.06.2012
27
28. We are competing for the
moment
Thank You!
We are competing for the
future
We are competing for the
relevance
Karol Górnowicz,
Director of
Sales Department
Warsaw, 06.06.2012