May 14, 2002 | 1255 IST
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Money > Business Headlines > Report May 14, 2002 | 1255 IST |
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The interesting gameplan of Ways IndiaSavio G Pinto Ways India, a group company of Home Trade promoter Sanjay Agarwal, has provided interesting insights into the working of the company in a report submitted to financial institutions on its business and revenue model. Given below are some key points presented in the report, which was however turned down by the institutions. Business of the company: To start with, Ways India developed a software package known as Internet Mind Manager which it claimed was an automated software package for managing projects and organisational details online. The company later tied up with a German company, Brokat Infosystems AG, through its regional headquarters for Asia, Brokat Asia Pte, Singapore. Ways India was to be the exclusive country partner of Brokat and was to introduce in India, Brokat's ' Twister' e-services platform, one that could integrate multiple delivery channels and multiple security protocols with back end systems. In order to undertake this activity, the company intended to set up additional infrastructure as well as planned to acquire or takeover existing IT companies to strengthen its market reach and gain domain expertise. The company had also planned to set up Twister competency centres at Singapore, London, Stuttgart, Boston and Silicon Valley to provide customisation and implementation services. Unfortunately for Ways India, Brokat itself initiated insolvency proceedings in December 2001. The financial plan: The financial plan of Ways India indeed makes for some interesting analysis. At the outset, the project cost was estimated at Rs 1.44 billion. Of this, Rs 1.19 billion was to come through an initial public offer. The major chunk of these resources was to go towards funding acquisitions: with Rs 680 million being allocated on this count. The company had also estimated an investment of Rs 206 million towards advertising and marketing. While working capital and investment in infrastructure was estimated at Rs 84 million and Rs 250 million, respectively, contingency and IPO expenses were estimated to be Rs 100 million and Rs 120 million. Incidentally the equity share capital of the promoters was of Rs 250 million only. The revenue model: The business of Ways was structured into three revenue streams 1) Twister India, which had an India-centric focus. According to the company, as per the exclusive country partnership agreement between Brokat Asia Pte and Ways India, it had been agreed to share the Twister sales revenue between Brokat and Ways in the ratio of 3:2. However, the revenues generated from the implementation and customisation of the product was to accrue to Ways India. 2) Twister Competency Centres- on a global scale. Ways India had an agreement with Brokat to develop competency centres in Asia Pacific. The purpose of these centres was to deliver cost-effective solutions to customers. The centres were to undertake implementation and customisation of Brokats suite of products. Ways was to be responsible for the staffing and maintenance, while Brokat would provide advisory services. The competency centres were to predominantly cater to Brokat-related assignments in lieu of which, Brokat would pay Ways revenue of $500 per person per day for 30 persons at each centre. 3) Acquisitions Ways has also listed out acquisitions as a means of revenue growth. The company had identified companies both in India and abroad for the purpose. In the company's view the acquisitions would help not only in a revenue growth but also to get access to a client base. Marketing strategy: Irrespective of anything else, the company had what it felt was a well-defined marketing strategy and had outlined its philosophy behind the marketing strategy in its overall plans. The company had a six-pronged strategy. 1) Firstly to be a market leader by being an early mover. The company felt that it would be important to move in early and tie-up with those who are seriously contemplating e-commerce since " this would have another benefit- it would provide as a referral for other projects in future." 2) Target key decision influencers - the draft project report of the company mentions how " it has been seen that employees of the user organisation do not necessarily influence decisions on IT and IT related issues. In many cases independent consultants are brought in to recommend solutions for proposed investments. These are organisations such as Andersen, PricewaterhouseCoopers and Tata Consultancy Services. Ways India should target not only consultancy organisations but also those who offer hardware and networking solutions for e-commerce applications and those who offer specialised enterprise software. Ways should forge linkages with such organisations through a focused marketing approach." 3)Branding: The company felt that buyers of e-commerce platforms wanted to have the comfort of a brand and that Ways India should highlight its association with Brokat and Brokats success stories around the world in its marketing. The advertising campaigns of Ways India were to reflect this association since it would communicate the international and successful character of their products. 4) Aggressive advertising and promotion strategy- On this front the company felt that " to capture mind-share and to ensure top of the mind recall for Ways India, an aggressive advertising and promotion strategy be followed. Aggressive investments in marketing especially in market creation and expansion need to be done. Aggressive advertising and promotion strategy will also complement the vision of Ways India to be a market leader in its businesses and also build a brand image of Ways and Twister." Other strategies pertain to domain knowledge and prototype approach which would demonstrate to Ways clients the solutions it intended to offer. Powered by ALSO READ:
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