It Consultancy Business Plan for Term Paper

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Figure 4, SAP's Vertical Market Penetration, shows by vertical the total count of companies in the Global 500 overlaid by SAP's customer penetration by vertical. In Discrete Manufacturing for example, SAP has 87% of the total Global 500 accounts in Aerospace and Defense.

SAP's Vertical Market Penetration by Global 500

Five Most Important Trends Influencing Demand for SAP Services

Of the many favorable factors that make the business model of Compass it Consulting Services' attractive, these five following trends are most significant:

SAP's high level of existing overlap on vertical markets relative to the many unmet needs in their customer base provide for a major market opportunity for consulting and integration services

SAP is moving away from supporting R/2,R/3 and R/4 versions of their ERP systems, further driving up the demand for consulting and services from third parties.

Best-of-breed software vendors who focus only on a niche of the total SAP infrastructure are gaining momentum and making the task of integration even more difficult. The result is that many SAP users need guidance on how to integrate their best-of-breed systems with SAP ERP systems.

As SAP increases the complexity of their ERP systems, adapters and connectors built by SAP customers' it Departments are beginning to fail as they cannot scale to the higher levels of performance. This is also a significant opportunity for Compass it Consulting Services.

SAP's launch of a hybrid Software-as-a-Service (SaaS) CRM application and the integration requirements customers have in using their databases with this new hosted model is significant and growing, opening another major opportunity for Compass it Consulting Services.

Target Market Description, Size and Growth Trends

Core business applications generated $30bn in worldwide revenue in 2004, with SAP claiming the leadership position. By 2010, an additional $40bn in Total Addressable Market gets created through organic growth of SAP NetWeaver, mid-market, industry vertical marketing and Small and Medium Business (SMB) programs.
Figure 5, Global Available Market Sizing, shows how significant organic growth is projected to impact the global total addressable market.

Global Available Market Sizing (SAP, AMR Research)

Customer Wants and Needs

Compass it Consulting Services focus' needs to be on the many unmet needs for integration specifically in the processes that manufacturers rely on. SAP's solutions roadmap is shown in Figure 8. In this workflow created by SAP, it is clear that in each step of the process from designing, to selling and finally servicing products the high levels of integration required. At each of the specific system integration points there are issues of legacy data and application support, integration to emerging best-of-breed systems and processes, and support for legacy R/2, R/3 and R/4 ERP systems. Clearly the opportunities from a systematic view of the SAP process workflows in manufacturers' shows significant potential for Compass it Consulting Services.

Figure 8 Industrial Manufacturer's Solution Map (SAP)

Financial Analysis of Compass it Consulting Services

Years ending Mar

Act/Est

Proj

Sales

Gross margin

Operating expenses

Income from operations

Net income before taxes

Net cashflow

Cash balance (deficit)

Total assets

These ratios are based on a combination of monthly/quarterly/annual values

Peak debt as % equity

Lowest current asset ratio (times)

Peak sales/total assets (times)

Net income before taxes as % total assets

Gross margin (as % sales)

Net income before taxes (as % sales)

For ease of reading and further analysis, included in the attached Microsoft Excel file are the following tables by tab in the file:

Financial Summary

12-Month Performance Review

Year Performance review

Balance Sheets by Quarter and Year

Income Statements by Quarter and Year

Cash Flow Statements by Quarter and Year

Global Peer Group Shares vs. U.S.….....

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