Question

IMA Ltd.

Material Master Data Solutions

Overview:

In 2019 IMA celebrated 30 years in business. This is a big milestone for the company and clearly demonstrates our credibility and longevity in the market. In 1989 when the company started we were the trailblazers and focused on indirect material data (data related to the spare parts that keep manufacturing equipment running) before there were large ERP (Enterprise Resource Planning) systems. At that time our service allowed customers to find their spare parts quicker which allowed them to repair failed production equipment faster; thereby reducing expensive production downtime. Our sales team is responsible for revenue generation pertaining to the sale of our Material Master Data Management services. These services allow asset intensive organizations the ability to leverage normalized data within their ERP to achieve benefits related to reduced production downtime, better MRO part procurement, and the elimination of excess spare part inventory. For the most part our customers consist of manufacturing companies with multiple sites. The sites can range from a few within a province to hundreds worldwide. Customers such as Pepsi, Honda, and McCain Foods have been long time customers and rely on IMA to ensure their data remains best-in-industry.

The price model for our main revenue stream of project data cleanse has remained the same for the last decade; charges vary based on the work performed to each line of customer data. There are three service levels consisting of a cosmetic cleanse, standardization, and item enhancement with pricing by line item of $1.50, $2.50, and $3.50 respectively. Every project is subject to a $5,000 IT fee for data preparation. The average dataset is 60,000 line items but projects range from 2,000 line items to 750,000 line items. The sales team sells $25 million annually worth of project based dataset cleanse services worldwide. Recurring revenue is currently generated from a data governance solution that allows the customer to maintain the integrity of their newly cleansed data condition using a web based portal for item addition and item modification. Users pay $150 per person per month to access this service. Currently the recurring revenue represents $7.5 million or 15% of the company’s overall sales. The sales team is lean and consists of a team of 6 Territory Managers defined globally by geographic region. They report to a VP of Sales. Customer acquisition cost is high (approximately $5,000) due to the technical demand of this type of project. The sales process typically includes initial introductory web conference, customized data evaluation, sales proposal, ROI calculator, in-person proposal review and negotiations, and final proposal acceptance. Social media and the company website generate most of the leads. Competition is limited globally as we compete in a niche market. We project the total market globally for data set cleanse projects to be $500 million.

In 2017 the owners recognized a change in the market. Customers now have Data Governance teams of their own and attempt to perform the IMA services in-house. The IMA executive team allocated $3 million to generate a SAAS model solution that would provide customers the tools they need to clean and maintain their own data. If nothing was done to adapt to the market changes IMA could risk losing the project based revenue steam. Instead, the SAAS would generate a solution for the changed market while creating a new revenue stream for IMA.

The SAAS solution is branded as uManage Pro and consists of the following:

uManage SEARCH – allows users to effectively search their item master data. Currently the typical ERP is weak at best with its search capability.

uManage DATA LIBRARY – users can access a data repository of over 3 million items to assist with item addition. This is the largest single data repository of its kind in the global marketplace. IMA is the first to allow external users to access the data. It has been created over 30 years and would be costly and timely for a competitor to re-create.

uManage DATA GOVERNANCE – this tool allows customers to maintain their data using an embedded data schema. Doing so ensures consistency amongst the data in their item master while preventing duplicate entries. Data Governance includes both the SEARCH and DATA LIBRARY services.

uManage PRO – includes search, data library, data governance, as well as a full cleansing tool that allows the user to clean their own data. This advanced technology replicates the tools IMA has used for the last decade. AI (neural network) is a significant contributor to the SAAS and is the first of its kind.

Market Pricing

Service                                     Monthly cost per user

SEARCH                                   $     49.00

DATA LIBRARY                         $     99.00

DATA GOVERNANCE               $     99.00

uManage Pro                          $5,000.00 (monthly fee, unlimited users)

The challenge:

The executives at IMA recognized the change in the market in 2017 and made a bold decision to prepare for the changes before it was too late. They should be commended for their foresight and their commitment to change the company to meet the market demands. However, hiring a software development team and creating the technology is only a portion of what it takes to maintain their position as markets leaders. IMA has realized that their current marketing team is unfamiliar with the strategies involved in marketing an innovative SAAS. The VP of sales has admitted that his current team is extremely successful at selling the typical IMA project based services however software, specifically SAAS, is an area that they are not currently skilled to sell. The technology is now completed and IMA is unprepared to take their market leading solution to market.

Options to consider:

1.

Do we train the current marketing and sales team to better understand how to perform

their area of responsibility with regards to SAAS?

2.

Do we hire a new marketing/sales team that specializes in SAAS Social Selling?

Marketing?

3.

Can a third party marketing company be leveraged in the short term to augment the

existing marketing team?

4.

Should there be a test period for any of these ideas?

Question. what will be the sale strategy of the company?

b) who will be targeted market and customers?

c) action plan and financial forecast for one year to reach mention target?

Answer 1

1. Yes there is a need to train the current marketing and sales team to enable them to understand how to perform their area of responsibility with regards to SAAS. Training will set up a benchmark of performance and will give a better understanding of their task and goals to be accomplished. Training is an essential aspect in order to peform and expand the horizon of knowledge and achieveing efficiency. Upgradation of new skill will improve the morale of the team and this should be perceived as an opportunity to learn a new skill. Training will not only help the organisation to accomplish targets and pre-defined goals infact will also help employees to enrich the skills and knowledge. Yes definitely the current marketing and sales team should be trained in regards to SAAS.

2. No there is no need to hire new marketing/sales team that specializes in SAAS Social Selling because the existing employees can be trained better as they are already familiar with the organisation relatively compared to hiring someone new. Recruitment and training from outside can be a time cosuming and expensive process. By committing to top-quality ongoing training for existing employees, will help build a workforce that’s highly skilled, and trained your way. A consistent commitment to quality and ongoing training will improve employee engagement and yield a more productive, flexible organization. As an added bonus, assuming they’re compensated well, current employees will become both more loyal to the company and less interested in looking elsewhere.

3. Yes a third party marketing company be leveraged in the short term to augment the existing marketing team. It seems to be a viable option to add value to the existing marketing team and it will lead to better eposure in terms of learning and upgradation of skills.

4. Yes definitely there should be a test period of 2 -3 weeks in order to evaluate the results and consequences. Its important to know the need of modification, benefits , the need for changes.

Strategic steps for the sale:

• Target your Product & Pricing. ...
• Have a Strong Value Proposition. ...
• Identify Your Profitable Customers. ...
• Build Strong Customer Relationships. ...
• Reinforce Your Value Proposition.

Targeted Market:

• Business Market
• Consumer Market
• Government Markets
• telecommuting workers

Your sales forecast in a business plan should show sales by month for the next 12 months--at least--and then by year for the following two to five years.

1. Develop a unit sales projection. ...
2. Use past data if you have it. ...
3. Use factors for a new product. ...
4. Break the purchase down into factors.