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Page 1: 1 1 BUSINESS PLAN PT EMPATIX INDONESIA Prepared By In-Touch Strategy. Research. Planning. December 2007

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BUSINESS PLAN BUSINESS PLAN PT EMPATIX INDONESIAPT EMPATIX INDONESIA

Prepared By In-Touch Strategy. Research. Planning.

December 2007

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MARKET OVERVIEWMARKET OVERVIEW[Business Description][Business Description]

• Background• Market Overview• Competitive Overview• Survey

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BackgroundBackground• Empatix is a company providing Enterprise Resource Planning (ERP) solutions in

which the modules and functionalities can be rented or sold to customers, thus Empatix’s ERP solutions work on all devices, such as computers, mobile phone and PDA which have browsers and connected to the internet.

• Empatix is also a leading company provides office application for (mobile office technology) Mobile Phone, PDA, and Computers connected to internet. Therefore, office in your hand can be operated

• Empatix sells the ERP solutions partially and based on modules. The ERP comprises of: Customer; Product, Order, E-commerce Mobile Basket, Accounting, Invoice, Project Management, Salary, Quota, Pick and Pack, CRM (Customer Relationship Management), Management and Economy Reports, Request, Human Resources, to Do, E-Mail and Time Keeping.

• The economy in Indonesia is growing, that means many types of businesses, medium and small, are emerging and starting to feel the need of IT solutions. IT solutions are becoming more critical mainly as it is no longer considered as luxury but a need. With the emergence of 3G /3.5 G technology in Indonesian telecommunication industry, the importance of launching the mobile office technology is gaining the momentum.

• To face Indonesian rapid development in mobile technology, Empatix which originated from Norway, is establishing business in Indonesia based on the fact that many Indonesian companies lack of ERP solutions.

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Objective Of This Objective Of This DocumentDocument

• In order to strengthen the business operation of PT. Empatix in Indonesia, PT In-Touch has been assigned to develop a business planning as a reference to face the market and the investors.

• This document serves as a Business Plan Document for Empatix general direction to ensure the resources of EMPATIX’s business are allocated effectively and profitably across its activities, thus developing and sustaining a competitive edge in the market place.

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Market OverviewMarket Overview

General Situation In Overall Information Technology Market

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Market Overview:Market Overview: SourceSource• This overview is based on:

– General studies on IT market from Newspapers and Magazines

– Infoplan Research Result – Interviews conducted with several IT solutions

providers (small, medium and large IT / Business Solutions Providers)

• There are 5 interviews conducted – UKM (SME) definition based on UU No.9 Th

1995 ( Indonesian Regulation Nr. 9 – 1995).– Presidential Instruction Nr. 10 – 1999– Definition of SME based on International

Finance Corporation (http://www.ifc.org/sma/html.)

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7Market Overview:Market Overview: SourceSource

RespondentsRespondentsNO NAME Company

1 Mr. John Doe (source name will be kept confidential)

Sales Manager Of Big IT Solutions Provider

2 Mr. John Doe (source name will be kept confidential)

Managing Director OfIT consultant and auditor

3 Mr. John Doe (source name will be kept confidential)

Sales Manager of Medium Solution Provider

4 Mr. John Doe (source name will be kept confidential)

Sales Manager Of Medium Solution Provider

5 Mr. John Doe (source name will be kept confidential)

Sales Manager Of Big IT Solutions Provider

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Market Overview:Market Overview: General General OverviewOverview

• Indonesia is highly potential for Information Technology (IT) industries, the competitiveness is relatively small and the untapped market to be explored is relatively big. – Based on EUI (Economist Intelligent Business) considered ranked at 57th

rank from 64 countries in IT competitiveness

• This IT market is still small, but already fragmented. They do not just accommodate big businesses (big enterprises), but nowadays players also accommodate services for UKM (SME) – thus small businesses. – Most ASP / Application Service Provider accommodate services such as

financial software, data base and analysis.

• The growth of IT industry in Indonesia itself is promising, it is around 12 % growth, however still relatively low compared to other

countries: – USA 68% per year– India 35% per year – China 44% per yearSource:

Business Indonesia, NASSCOM, US Dept Of Labor (http://www.doleta.gov/BRG/Indprof/IT_profile.cfm), http://english.peopledaily.com.cn/200408/24/eng20040824_154477.html;

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9Market Overview:Market Overview: General General

OverviewOverview The Challenge In The Challenge In GrowthGrowth • Poor IT infrastructure (non

compliance to certain standard)

• Geographical condition (Indonesia as an archipelago country). – However these challenges will be overcome by

the finishing of PALAPA RING fiber optic network establishment by the end of 2009 to support the acceleration of IT Industry growth.

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10Market Overview:Market Overview: Large Business Solutions Large Business Solutions ProvidersProviders

• They are building IT solutions based on well known brand ERP applications such as Oracle, SAP and Microsoft.– Their clients are very concerned about their application brands rather

than money they spend for IT requirements as they think that it will be a long term investment.

• They mostly sells total solutions (package – products) and they were paid for their consulting hours and (plus) products.

• They are reluctant to sell or build IT solutions from other brands, especially unknown / new brand as their client sees that credibility is based on brands. – The more they focus on a brand, the more their client sees that they

are experts on that particular brand.– Not much effort in selling the products (let the products do the sale by

itself) – Trained by the big ones such as Oracle, Microsoft, SAP, etc thus not

much investment on R&D and technologies.

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11Market Overview:Market Overview: Large Business Solutions Large Business Solutions ProvidersProviders (continued)(continued)

• They do not feel that mobile access solution is a new or additional value for their clients as they have built their own solution.

• They do not feel that big incentive is attractive.

• They have difficulty to employ experts if they have to focus on additional brands.– Thus for Large Business Solutions Providers to

carry more brands means more hassle for them.

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• They are building IT solutions based on any brands of ERP applications.

• Their clients are not too concerned about application brands.

• Their clients prefer to have affordable IT solutions with any brand as long as the brand has sustainable after sales support– Success stories and testimonials of existing (previous) clients

are very important.

• Their clients find that Oracle, SAP or Microsoft are expensive brands while utilization of their functions will not be maximum as the products are too advanced.

Market Overview:Market Overview: Middle And Small Business Solutions Middle And Small Business Solutions

ProvidersProviders

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• They are eager to sell or build solutions from another brand, including new brands as their clients prefer to meet their IT needs with minimum investment.

• They feel that mobile access solution is indeed a new and additional value for their clients as they do not have to build it from scratch (immediate implementation).

• They feel that big incentive is attractive.

• They also have difficulty to employ experts if they have to focus on additional brands.

• They mostly sell in partials and by projects (rarely building a total solution) – However the brands that they are currently carrying are still the

same major brands like Big Solutions Providers, (Oracle, Microsoft, SAP etc )

ADDITIONAL BRANDS TO SELL ARE ADVANTAGES FOR THESE MIDDLE AND SMALL BUSINESS SOLUTIONS PROVIDERS

Market Overview:Market Overview: Middle And Small Business Solutions Middle And Small Business Solutions

ProvidersProviders (Continued)(Continued)

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14Market Overview:Market Overview: CCurrent Market urrent Market PositionPosition

SAP One

Big Local Application

Small Local Application

EXPENSIVEAFFORDABLE

Medium Local Application

SAP

ORACLE

Very Small Business

SAP One

Microsoft

Advanced Entreprises

Specific Application

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• There are many small IT solutions providers– Provided by universities lecturers and students

targeted to very small companies (UKM – Indonesian definition) –

• They sell unsustainable products– Price range Rp 5 million – Rp 15 million (using

small brands).

Market Overview:Market Overview: Additional Additional InformationInformation

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Market Overview:Market Overview: Summary Overview And Summary Overview And

Challenges Occurred In IndonesiaChallenges Occurred In Indonesia Big IT solutions providers are reluctant to build ERP systems with

unknown / new brand. However, medium to small IT solutions providers are interested to do it.

Big-scaled end-users (big companies) do not want to use unknown / new brand of ERP system as they feel it is too risky.

Medium to small companies do not want to use expensive IT systems.

There are not many IT experts in Indonesia. The investment for human resources is high. Thus training from principles will be handy.

Market needs proven record or success stories and finds recommendations from others before they implement any IT system.

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Product OverviewProduct Overview

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Product Overview:Product Overview: BackgroundBackground

• Discuss about the product itself in technical perspective, identified the structures, how does it worked and categorized by its solution.

• Discuss about the product itself in system and

Nature of Business perspective, identified the target market, who is using the solution within the users, and advantage for users if using it.

• Discuss about the competitors, their Strength and Weakness, their differentiation etc.

• Identified its competitiveness by identifying SWOT

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Product Overview:Product Overview: DescriptionDescription

• Business Solution Application– Application that perform

the business activities or/and processes within the company, fully or partially, to make business advantage

• Service Solution Application– Application that give Value

Added or/and differentiation that can emphasis the business advantage of the company

• Business Solution Application– Fully Enterprise Resource

Planning (ERP)– ERP for Small Medium

Business (SMB/UKMM)

• Service Solution Application– Mobile Transaction Engine– Integration System Engine– E-Commerce for Business to

Business (B2B) and (B2C) Business to Consumers

– Content Management System

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20Product Overview:Product Overview: DescriptionDescription Business Solution Application Business Solution Application

(Basic ERP)(Basic ERP)

BUSINESS SOLUTION APPLICATION

After SalesService

Marketing& Sales

OutboundLogistic

OperationsInboundLogistic

Finance and Accounting

Human Resource Management

Administration and Support

Management Information System

Etc….

Main Activities

SupportActivities

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21Product Overview:Product Overview: DescriptionDescription EmpatixEmpatix Enterprise Resource Planning Enterprise Resource Planning

ModelModel

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22Product Overview:Product Overview: DescriptionDescription Basic Physical Topology Basic Physical Topology

Empatix ERPEmpatix ERP

EmpatixDatabase

Applications

Router

LAN Switch

BRANCH OFFICE

Remote MobileOffice

TelcoOperator

Remote Office

Internet

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Product Overview:Product Overview: DescriptionDescription

Services Solution Services Solution ApplicationApplication

Service Solution

BUSINESS SOLUTION APPLICATION

After SalesService

Marketing& Sales

OutboundLogistic

OperationsInboundLogistic

Finance and Accounting

Human Resource Management

Administration and Support

Management Information System

Etc….

Main Activities

SupportActivities

Differentiation

Etc….

Accessable

Informative

Efficiency

Manageable

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Product Overview:Product Overview: DescriptionDescription Services Solution Application Services Solution Application

CharacteristicCharacteristic

• Offer differentiation and the ability to support the Enterprise Resource Planning – Not a form of basic service but rather adds value total

service offering MOBILE ACCESS TECHNOLOGY• Stands alone in terms of profitability and/or stimulates

incremental demand for core service (s) • Can sometimes stand alone operationally • Does not cannibalize basic service unless clearly favorable • Can be an add-on to basic service, and as such, may be sold

at a premium price • May provide operational and/or administrative synergy

between or among other services – not merely for diversification

– Usually support by Telecommunication Service Provider– *Especially for medium to small scale Business solution

provider

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Product Overview:Product Overview: DescriptionDescriptionEmpatix Mobile Access Empatix Mobile Access (Sample 1)(Sample 1)

Journal Facture

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26Product Overview:Product Overview:

DescriptionDescriptionEmpatix Mobile Basket Empatix Mobile Basket

(Sample 2)(Sample 2)

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27Product Overview:Product Overview:

DescriptionDescriptionEmpatix Mobile Basket Empatix Mobile Basket

(Sample 3)(Sample 3)Bookmarks

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28Product Overview:Product Overview:

DescriptionDescriptionEmpatix Mobile Order List Empatix Mobile Order List

(Sample 4)(Sample 4)List Order

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29Product Overview:Product Overview: DescriptionDescription

Empatix Customer Registration Empatix Customer Registration (Sample 5)(Sample 5)

Customer Registration

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30Product Overview:Product Overview: DescriptionDescription

Empatix Quotation Empatix Quotation (Sample 6)(Sample 6)

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Product Overview:Product Overview: DescriptionDescriptionEmpatix Quotation Detail Empatix Quotation Detail (Sample 7)(Sample 7)

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32Product Overview:Product Overview: DescriptionDescription

Mobile Order List Mobile Order List (Sample 8)(Sample 8)

Order List

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Product Overview:Product Overview: DescriptionDescriptionEmpatix Integration Empatix Integration ( sample 1 )( sample 1 )

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Product Overview:Product Overview: DescriptionDescriptionEmpatix Integration Empatix Integration ( sample 2 )( sample 2 )

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Merchant

Store/RetailersPersonal Public Services/

Others

TransactionObjective

Product Overview:Product Overview: DescriptionDescription Empatix Services Solution Application Empatix Services Solution Application

DiagramDiagram

HEAD OFFICE

Router

LAN Switch

EmpatixDatabase

Applications

Users

Users

Service Providers

Financial Institutions

Bank

Other Financial Institutions

TransactionInitiative Transaction

Gateway

TransactionSupport

Users Telecommunication or ISP

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36Product Overview:Product Overview: DescriptionDescription Empatix Services Solution Application Empatix Services Solution Application

CharacteristicCharacteristic• Real Time and Secure access • Integrated to own Empatix ERP or other ERP’s • Efficient system that can be used in Cell Phone or

PDA in the same capacity, since it does not need application installation

• For mobile access using, GPRS, 3G, 3.5G or other access that can provide real time access

• Easy to customize so can be adapted to customer’s business

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Product Overview:Product Overview: DescriptionDescription Empatix CRMEmpatix CRM

• Empatix can work as a stand alone CRM solution– Quotation with pipeline– Communication– Request– Reports– Follow up

• Competitors (web based)– Salesforce– Sugar CRM– Netsuite– It everywhere– And some hundreds small home made solutions

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Product Overview:Product Overview: DescriptionDescription Empatix CMSEmpatix CMS

• Empatix works as a stand alone CMS solution, but are 100% integrated with all other Empatix modules.

• Competitors– Ektron– Syncron– Onbase– Sharepoint– Eprise– And 1000 of small or lager home made

solutions

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39Product Overview:Product Overview: DescriptionDescription

Empatix EcommerceEmpatix Ecommerce• Empatix Ecommerce works as a standalone

ecommerce solution, but are 100% integrated with all other Empatix modules.

• Empatix mobile shop

• Competitors– IBM– SAP– NetSuite– Networksolution– Storefront– And 1000 of small or lager home made solutions

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40Product Overview:Product Overview: Competitors of Business Solution Competitors of Business Solution

ApplicationApplication• Most of market areas are specific in range between big

enterprises and small medium business (international perspective)

• The SME market is very approachable, – however the competitors targeting to the SME market are emerging

• Most competitors are:– Well known trough the market– Providing similar products

• Yet providing unique product, since the requirement is custom made.– Focused on specific business areas

• Specific in services industries especially retail industry – Providing tailor made product, however cannot changing the

business process of the product

• Most of the competitors doing the old fashioned (installed server and application within clients’ premises / offices)– Thus with competitors services – clients need strong IT team.– Therefore EMPATIX service would give the advantage of having

remote server and web-based system compared to competitors• No need for clients to develop specialized IT team.

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Product Overview:Product Overview: Competitors Product PriceCompetitors Product Price

Some Example Of Competitors Product Price

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SAP One

Big Local Application

Small Local Application

Product Overview:Product Overview: Current Market PositionCurrent Market Position

EXPENSIVEAFFORDABLE

Medium Local Application

SAP

ORACLE

Very Small Business

SAP One

Microsoft

Advanced Entreprises

Specific Application

Page 43: 1 1 BUSINESS PLAN PT EMPATIX INDONESIA Prepared By In-Touch Strategy. Research. Planning. December 2007

43Product Overview:Product Overview: Current Market PositionCurrent Market Position

SAP One

Big Local Application

Small Local Application

EXPENSIVEAFFORDABLE

Medium Local Application

SAP

ORACLE

Very Small Business

SAP One

Microsoft

Advanced Entreprises

Specific Application

EMPATIX

ERP

EMPATIX

ERP FOR SME

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S W O T Analysis S W O T Analysis

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45SWOT Analysis:SWOT Analysis: STRENGTHSTRENGTH [1][1]

• Range of product can be modified– Easy access for dialog and

service– Easy to customize– Easy to Integrate– Flexible, easy scaling– Step by step purchasing for new

modules or changes of need

• Total integration between ERP,CMS and E-commerce

• Empatix is a web based technology (Future Trend) – Made for the future, the

framework are constructed based on the most modern way of programming

– Latest in Technology, Fast development and Innovative

• Integrated with mobile services– GPRS system has high priority in

most service providers (compared to sms - lowest)

– Not depending only on 1 (one) internet provider

• Always available through double internet access– By Normal internet access, can be

used in all Browsers– By Mobile Phone / PDA, can be

accessed through mobile gadget or PDA

• Reliable even in slow connection

• Real time

• Empatix has the advantage of having remote server and web-based system – compared to competitors that

mostly would install the server inside clients’ premises, no need for clients to develop a specialized IT team.

• Empatix uses open source software:– MySQL , Fedora, etc

• Low implementation expenses

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SWOT Analysis:SWOT Analysis: WEAKNESSWEAKNESS [2][2]

• High dependence on Internet Connection– Poor infrastructure and unstable connection in

Indonesia

• Require mobile device equipped with internet access.

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SWOT Analysis:SWOT Analysis: OPORTUNITYOPORTUNITY [3][3]

• Internet based business offers abundant opportunities.

• The demand for mobile access technology is growing in Indonesia.

• Many companies start to convert from conventional system to modern system.

• Opportunity to expand the business by cooperating with local internet and telecommunication service providers / companies

• (Work in Progress) Developing cooperation with IBM – Empatix could be run in IBM AS400

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SWOT Analysis:SWOT Analysis: THREATTHREAT [4][4]

• Big enterprises prefer well established brands.

• Conservative companies are reluctant to adopt modern technology– Because they are not technology-literate – thus

uncomfortable to use technology.

• Existing strong competitors with large production and economies of scale capability– Strong after sales service from competitors (from

competitors with stable brands)

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Target Market Target Market Overview Overview

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Target Market OverviewTarget Market OverviewA. RESELLERS • Medium to small IT SOLUTIONS PROVIDERS - companies

B. TELECOMMUNICATION PROVIDERS• Cooperation to get end-users.

C. COOPERATION WITH BANKS

D. END USERS (mostly for campaign or education exposure) • Big companies

– Service-Companies (Expeditions, Distributors, Manufacturers; All companies with heavy distribution system, with ERP System, etc.)

• Medium to small companies– Joint approach with telecommunications providers (such as Indosat,

etc.)

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Target Market Overview:Target Market Overview: Cooperation With BanksCooperation With Banks

• In order to strengthen the market penetration, cooperation with Banks that cater SME or giving loan for SME market is highly suggested.

• Mechanism: – To cooperate with BANKS that cater to SME

markets (mostly giving loan or supporting SME to enhance their business, such as Bank BRI or Financial Institutions)

– Empatix could come as the support that could be suggested by the BANKS or Financial Institutions that aim to support SME.

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Target Market Overview:Target Market Overview: Glossary Of SME Glossary Of SME

DefinitionDefinition

In order to simplify the perception and understanding of the reader

(or parties involved), some definitions and technical words will

be explained in details.

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Target Market Overview:Target Market Overview:Definition of UKM (Usaha Kecil Definition of UKM (Usaha Kecil

Menengah) / SME (Small Medium Menengah) / SME (Small Medium Enterprise) Enterprise)

There are many SME definitions, however recommended SME definition is stated within this

document

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54Target Market Overview:Target Market Overview: SME ( UKM) Definition SME ( UKM) Definition

Indonesian Regulation Nr. 9 Year 1995Indonesian Regulation Nr. 9 Year 1995

Small Enterprise: The business unit with net asset minimal Euro 14,286, (Rp 200 Million) - not including land and business property or has annual revenue maximum Euro 71,429,- (Rp 1 Billion) and owned by Indonesian citizen.

President Instruction Nr. 10 Year 1999:Medium Enterprise :• Having the net asset more than Euro 14,286,- (Rp 200 Million) to

maximum Euro 714,286,- (Rp 1 Billion) not including land and business property.

• Owned by Indonesian citizen .• Independent company and not a sub-enterprises or company

branch that owned, authorized or affiliated direct or indirect to big unit business .

• Company owned by person, legalized corporate (PT) and or not legalized corporate .

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Target Market Overview:Target Market Overview: SME ( UKM) DefinitionSME ( UKM) Definition

IFC (International Finance Corporation) – IFC (International Finance Corporation) – The World Bank GroupThe World Bank Group

Scale Employee

Total Assets Annual Sales

Micro Enterprise

up to 10 up to 67,453.6 EUR up to 67,453.6 EUR

Small Enterprise

up to 50 up to 2,023,608 EUR

up to 2,023,608 EUR

Medium Enterprise

up to 300 up to 10,118,040 EUR

up to 10,118,040 EUR

Source: http://www.ifc.org/sma/html/sma_definition.html

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Scale Employee

Total Assets(in Millon RP)

Annual Sales(on Million

RP)

Technology

System

Micro Enterprise

up to 10

up to 1000(EU 71,429.00)

up to 1000 None

Small Enterprise

up to 50

up to 30,000(EU 2,142,857.00)

up to 30,000 Minimum

Medium Enterprise

up to 300

up to 150,000(EU 10,714,286.00)

up to 150,000

StandardRemarks:

•The company has to be legal establishment

•The company should give tangible services( e.g. not consultant, lawyer, designer)

•For conflicting case, the annual sales, employee, the total assets and technology system (the definition is put in order by priority)

EMPATIX target market 1 EU = Rp 14.000,-

Target Market Overview:Target Market Overview: SME ( UKM) Definition For IT IndustrySME ( UKM) Definition For IT Industry

Defined by In-TouchDefined by In-Touch

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57Target Market Overview:Target Market Overview: Definition Of Medium To Small IT Definition Of Medium To Small IT

ResellerReseller (Focusing On ERP)(Focusing On ERP) Scale Employee Clients Engineers

ExpertiseProductRange

Annual Sales(on Million RP)

Micro Enterprise

Self employed – or Universities professors and students

Small to medium

Standard to good Sells specific modules

Bellow 5,000

(EU 357,143.00)

Small Enterprise

Small – Medium

Standard to good

Modules up to 5,000

(EU 357,143.00)

Medium Enterprise

Medium To Big

Good to advanced

Modules to integrated solutions

Starts to focus on industry specific solutions

up to 20,000

(EU 1,428,571)

Big   Big to large enterprises only

Advanced Industry specific solutions and

Integrated business process solutions and its extended modules

20,000 – above

(EU 1,428,571)

Target market of Empatix

1 EU = Rp 14.000,-

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Target Market Overview:Target Market Overview:

Definition Of Medium To Small IT ResellerDefinition Of Medium To Small IT Reseller Definition Of Engineers Expertise Definition Of Engineers Expertise

[Based On Current Market Situation][Based On Current Market Situation]

• Minimum (Engineers Expertise): – Capability to provide and implement IT solution in basic

requirement. • Only focused on the running of IT applications, not necessary within

company standard (or clients’ SOP / system)

• Standard (Engineers Expertise): – Capability to provide and implement IT solution within

appropriate standard IT environment requirement • Capable in executing client’s SOP / system in a comprehensive IT

system

• Advance (Engineers Expertise): – Capability to provide and implement integrated IT business

process solutions • Capable in optimizing client’s SOP / system in a more advanced

and profound IT system.

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Target Market Overview:Target Market Overview:General Information On SME In General Information On SME In

IndonesiaIndonesia

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60Target Market Overview:Target Market Overview:General Information On SME In General Information On SME In

IndonesiaIndonesia Description On SME in Description On SME in IndonesiaIndonesia

SME - High population (numbers) in total industry (99.9%)

Human resource and labor extensive

capability (99.9%) Low contribution

level towards overall GDP ( 54.74%)

The Strength of UMKM:High perseverance level to hold out of crisis Compliance towards credit installment plan.

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61Target Market Overview:Target Market Overview:

General Information On SME In IndonesiaGeneral Information On SME In Indonesia

Small Medium Enterprises Small Medium Enterprises As Potential Target MarketAs Potential Target Market

• Most of the SME in Indonesia are still having problems in:– Overall Management

including Information Technology, Human Resources, Market Access, Funding Access, etc

• Therefore EMPATIX could be the solutions for SME to gradually enhance their overall system management.

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Target Market Overview:Target Market Overview:Barriers In Approaching Barriers In Approaching SME Target ConsumersSME Target Consumers

The barriers that would occur, would come especially from internal system of the approached companies.

Especially for SME (UKM) target market, thus for those who lack IT exposure still find that :

o IT will change their work behavioro Investment on IT is too expensive and too advanced,

therefore IT is only for big enterpriseso IT needs regular maintenance o IT needs learningo IT needs special skills

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General Strategy General Strategy

• Marketing Strategy• Distribution Strategy• Communication Strategy• Financial Strategy

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Marketing StrategyMarketing Strategy• Engage with solid local partners

• Engage with local IT associations to get insight of the industry and to promote awareness by participating in their events.

• Market education through Campaign– Conducting series of seminars and demo road shows in major cities

in Indonesia (Medan, Jakarta, Yogyakarta, Surabaya, Bali, Makasar)– Participating in Indonesian IT key events– Show success stories and testimonials from EMPATIX existing

clients.

• Combining Advertising and Public Relation programs to establish and accelerate the awareness

• Cooperation with BANKS that cater SME– Empatix could come as the support that could be suggested by the

BANKS or Financial Institutions that aim to support SME.

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Distribution StrategyDistribution Strategy

• All the distribution channel are selling through Partners / Re-sellers – Develop solid partnership with IT solution

providers (mostly medium – to small size).

– Develop partnership with telecommunication Providers, to support the mobile access of office application service.

– Develop partnership with Banks, to support company or enterprise that need fund for IT investment.

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66Distribution Strategy:Distribution Strategy: What IT Partners Should Be Able What IT Partners Should Be Able

To DoTo Do • A Partner / Reseller is assigned a dedicated contact person

responsible for making sure all request and questions are handled swiftly and without delay.

• Partners are given extensive free training and are continuously kept up to date on new functionality, technology and initiatives by Empatix.

• Relationships with the resellers are managed through specialized agreements, and Empatix works with each individually to build mutually beneficial business plans and relationships.

• To maintain and serve Empatix customer, all our partners will be offered extended training in both normal use and different sort of development and integration. This way we believe that both our partners and customer will have mutual advantage of the relationship.

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67Distribution Strategy:Distribution Strategy: What IT Partners Should Be Able What IT Partners Should Be Able

To DoTo Do continuedcontinuedPartner Classification

Our partners will be offered 4 different technical courses. The first one is an extended user training course that all have to participate in. The three other is elective, but the classification and the commission the partner receive will depend on the level of training.

The 4 technical courses are:1. Extended user training2. CSS Implementation3. Empatix framework development4. Empatix Integration

Empatix will also offer specific sales training, and we are at the moment looking after partners to help us with this.

Our partners are divided into 3 different groups. Silver, Gold and Diamond. The classification in further depending on educations/training level and volume.Silver partner, level one in technical training.

• Silver partner * level two in technical training.• Gold partner, level two in technical training.• Gold partner ** level three in technical training.• Diamond partner, level three in technical training.• Diamond partner *** level four in technical training. 

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Communication Strategy Communication Strategy [1][1]

• PR objective– To raise awareness of PT Empatix and its range of products– To raise awareness of PT Empatix as one of the global IT players– To raise awareness of Empatix product being more affordable– To position Empatix as an alternative solution besides existing principals in

Indonesia

• Stakeholders Mapping– Government and regulators (Menristek – Ministry of Research and Technology ;

Menkominfo – Ministry of Communication and Information ; BPPT – Institution of Research and Development of Technology ; etc.)

– IT industry (distributor; reseller and partners)– Media (all media related to technology and media with IT section)– Influencers / Endorsers (IT Experts; analysts)– IT Associations (Aspiluki-Indonesian Software Company Association)– Education institutions (University with IT department)

** Stakeholders could be the endorsers for EMPATIX, thus strengthen credibility.

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Communication Strategy Communication Strategy [2][2]

PR Strategy

1. Support marketing strategy– Support the above marketing strategy– Take part in the conceptual phase of marketing

program discussions to provide PR content– Identify newsworthy stories for publicity

purposes– Support marketing activities with publicity –

press briefing, press conference, interviews, pitching story ideas, press release distribution, photo+caption distribution, etc.

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2. Build stakeholder relations

• Government,regulator, Influencer (IT Expert; analyst)– Gathering

• IT industry and education institutions– Product review and demo– Hands-on seminars– Product upgrade sessions

• Media relations– Continuous media relations to promote good relations with primary, secondary

and possibly tertiary media through regular gatherings, formal as well as informal

– Establish a quick response system for queries from the media and recommended action for each query

– Introduce EMPATIX management to the media through meetings and media visits

– Establish and maintain media database

Communication Strategy [3]Communication Strategy [3]

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3. Generating publicity

– Generating publicity for corporate initiatives, pitching story ideas to the media, adapting and distributing press releases

– Conducting media conferences, media briefings and one-on-one interviews and press tours

– Planning, pitching and managing media educational workshops, roundtables and similar events with the media

Communication Strategy Communication Strategy [4][4]

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4. Press monitoring – Daily monitoring of selected national and regional print

media to identify articles on/or related to Client. • Daily competitive clippings summary sent by email to

EMPATIX. • Identify articles that need immediate attention and send on

same day.

– Enter critical issues raised in articles into the issues management system for processing.

– Evaluation of articles based on a measuring system adopted by Consultant called PREFEX (PR Effectiveness Index).

– Monthly analysis and reports.

– Summaries of top three clips for the week.

Communication Strategy Communication Strategy [5][5]

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5. Issues management

– Set up an issues management system including designation of an issues management team.

– Jointly identify the issues that client faces.– Put in an early warning system. – Outline a recommended plan of action to deal

with the issues. – Example of issues:

• Internet connectivity issues in Indonesia – EMPATIX would have monitoring system – to monitor

internet stability .

Communication Strategy Communication Strategy [6][6]

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Financial StrategyFinancial Strategy

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Financial Strategy :Financial Strategy : RemarksRemarks

• At this stage, it is not possible to construct Balance Sheet and Cash Flow Projection for PT. Empatix, as the financial information is very limited.

• In-Touch proceeds with Income Statement

Projection and Risk Analysis to give a "bird's eye view" to the management of PT. Empatix on the feasibility for the next 5 years (2007-2012).

• Some assumptions and simplifications are employed in the Projection.

• Assumptions could be classified into macro and micro.

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Financial Strategy :Financial Strategy : Macro Macro InputsInputs

• The start up figures used by In touch, are as follows :

Indonesia GDP Growth 6.5%

Initial Investment US$ 1,000,000

IT Industry Growth 12%

Cost of capital 6%

Exchange Rate 1 US$ = Rp 9.300,-

Inflation 6%

Overhead per month To be adjusted Further

Corporate Income Tax 30%

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77Financial Strategy :Financial Strategy : Micro Micro InputsInputs

For micro figures, lots of assumptions and averaging required for the projections, such as :

Amount of investments/capital injected

Sales growth (target) in dollar value as well as number of new accounts, for each customer segment (UMKM and Large)

Type of products sold

pricing scheme, contract terms and conditions, for each segment

Cost of capital :

whether the source of capital is from internal company or involving banks

Fixed and variable costs :

for sake of simplicity, all costs shall be categorized into fixed (mostly overhead and administration) and variable (development, license fee) costs

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Financial Strategy :Financial Strategy : Micro InputsMicro Inputs (continued)

1. In line with the marketing strategy recommendation, it is assumed that there are 4 major product categories as the focus for PT. Empatix :

– Mobile Access, ERP for Small Medium Enterprise, e-commerce and CMS

2. The Mobile Access and ERP have about the same growth. Start with 35% in 2009, 40% in 2010, 45% in 2011 and 50% in 2012. The growth is based on the retained figures of the most recent year. Hence, if the number of customers in 2008 are X, then it will be growing to X + 35% of X in 2009. If the number of customers in 2009 are Y, then it will be growing to X + Y + 35% of Y in 2010

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Financial Strategy :Financial Strategy : Micro InputsMicro Inputs (continued)

3. The reseller fee is 24% as it will be between 17% and 25%.

4. License fee is 18,5% which is 15% + 30% tax.

5. Development fee and sales fee are 25% and 4% respectively.

6. The actual volume (users) are functions of targeted sales growth. As the price are not in Rupiah, exchange rate fluctuations are deemed to have insignificant direct impact to sales volume.

7. A typical SMB (small and medium business) company purchases 5 ERP modules at $ 300/modul.

8. Price per user for mobile access is estimated at $16.5/month or $200 p.a.

9. All users in any current year are brought forward to the next period (no signing off).

10. Overhead costs include administration costs+staff salary, More the first year, and less the second. because need more for training. I person from Norway 6 – 9 months so total expenses around 50 000US$ for the trainer..

11. The initial investment is fully depreciated in 6 years, with straight line method.

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81Financial Strategy :Financial Strategy : FINANCIAL PROJECTIONFINANCIAL PROJECTION

(To Be Processed 18 December 2007)(To Be Processed 18 December 2007)

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AppendixAppendix

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APPENDIXAPPENDIX• Media exposure:

– Print Media• Sinar Harapan, Economy & Business section (Thursday, August, 23 2007)• Suara Pembaruan, Community section ( Sunday, August 26th 2007)• Media Indonesia, Corporate Event section ( Thursday, August 23rd 2007)• Berita Kota (Thursday, August 23rd 2007)• Seputar Indonesia (Sunday, August 12th 2007)• INDO POS, Jawa Pos News Network (JPNN), Tuesday, August 14th 2007• Bisnis Indonesia, Etalase section (Saturday, August 18th 2007)• The Jakarta Post, Section World – Diplomatic Notes (Friday, August 31st

2007)• The Point, Business section ( Thursday, August 23rd 2007)• Bisnis Jakarta (Thursday, August 23rd 2007)• Harian Terbit (Saturday, August 25th 2007)• Bisinis Jakarta ( Thursday, August 23rd 2007)• Investor Daily (Thursday, August 23rd 2007)• Bali Post (Saturday, August 25th 2007)

– Internet Media• www.detik.com (August 24th 2007)• http://web.bisnis.com (August 22nd 2007)