MANAGING BUSINESS MARKET ASSIGNMENT

PRECISE SOFTWARE SOLUTIONS CASE ANALYSIS

PROFESSOR DR. JOFFY THOMAS

Submitted by
SHEFFIN R SAM
EPGP- 10- 067
1. Should Alon plan on introducing Insight at Openworld 2000? Why or Why not?
In my opinion, Alon should not introduce Insight at Openworld 2000 because of the following
reasons:
i. If they introduce the incomplete product in the market then customers might get
confused and they may lose their reputation and credibility as well. There will be no
customer value addition but rather they will lose the customer credibility and the recall
value for the same will be less.
ii. For the customers who are looking for the end-to-end solutions, might not like it as it
is incomplete and they might not get a good picture of the same.
iii. As it is the initial phase they have to be very careful with the competitors who might
copy the same and release the product before Precise may do it.
iv. Also there are lots of ground work needs to be done, like the GUI (graphic user
interface), pricing strategy and sales force etc.
So they should release the product in the market once it is fully ready and functional with an
user interface which can be easily understood and operated by the users. This will increase
their Customer value proposition.

2. What should Precise strategy be for insight? Should they launch a separate sale force
for the new product or sell it through their existing sales force? How good is their
current salesforce?
A Direct selling approach will be best suited for Insight as the product is brand new with
complex functionalities. It is a premium product and hence direct selling with dedicated
and specialized sales force will be able to communicate its competitive benefits to the
customers more effectively.

The Indirect methods of selling available are System Integrators and VARs. They are
experienced in selling well established products with already a defined value and market.
Hence effective performance cannot be expected in case of a new product like Insight
which requires well trained sales force for aggressive selling and promotion. Hence they
should launch a separate sale force for the new product.

Precise currently has one sales team to sell all products through dual channel distribution
system. They have been successful in selling multiple products in the past and have
developed a strong relationship with the DMAs. The average sales rep earned $120,000
with a base salary of 75000 $ and commission ranging from 5-9% based on sales. The
highest paid rep earned about $300,000. Which is below the industry average. As this
product is a premium category, the sales decision would be made by the higher-level IT
executives (CIO or CTO). Precise would need the top guys in the sales industry who have
existing relationships with top level executives. This will enable good communication of
perceived value and can be sold aggressively.
 3. How should Insight be priced? Develop an ROI model for Precise/SQL product.

Savings from DBA Assuming 8 hours a day work and 5 days a week = 45 hours
Time 45 hours per week per week

9.4 / hours per

week Precise software saves 9.4 hours of DBA per week
488.8 yearly time savings as 52 weeks per year
60000 Annual DBA Salary
25.6 Annual DBA salary per hour i.e 60K/ (40*52)
12533.33333 Dollar Savings per DBA per year
10 Number of DBAs
125333.3333 Year DBA dollars savings

Savings from User

Time 194000 Average Daily transactions processed by all users
215 Number of Simultaneous Users
902.3255814 Transaction per User per day
30000 Average End User Salary
33 Average Employee Burden Rate as percent of Salary
Average End user response time before Precise SQL in
15 seconds
25 Improvement in end user response time
3.75 Time saved per transaction
202.0833333 Total Time saved in hours
0.9399224806 TIme saved per user per day
9 Number of working hours in Day
10.44% Percent of time saved per user
9900 Total Employee Cost = Employee Cost * Burden Rate
1033.9 Savings per employee
222291.7 Total Employee Savings

Hardware Savings 1430000 Annual Hardware Budget

30.00% Hardware Cost Saving if Postponed by One Year
 60.00% Probability of Postponing Hardware Purchase by 3 months
64350 Hardware Savings Cost~ 1430000*.3*.6*3/12

Total Savings 411975.0 Hardware Savings + DBA Savings + User Time Savings

DBA installation with 25% discount as cost of per installation

18750 is 25000/ DBA
10 Number of DBA
Total Investments 187500 Total Installation Cost
ROI 219.72% Total Savings / Investments