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The Software Vendor Business Environment CSC444F'07 Lecture 1 1 The Software Vendor’s Business • Make money from – Providing software and related services • Software – Must satisfy a need or a want in a market that is • Big enough • Is willing to pay enough to pay the costs + re-invest + profit – Licensed (not sold) + maintenance • Bulk discounts • Negotiable prices – Follow-on revenues are key • Maintenance, Upgrades, Consulting, New related products, ... • Software is quite “sticky” – Cost of acquisition – Need to ensure sold software is used » Not “shelfware” CSC444F'07 Lecture 1 2 Software Releases • Releases are the lifeblood of the software vendor company. – Must get an initial release of a new product out the door. • Must support and maintain that release. • Must market and sell it – Must get new feature releases out the door on a regular schedule CSC444F'07 Lecture 1 3 Software Vendor Structure Shareholders Board of Directors Executive Team Chief Executive Marketing • Sales Client Services Software Development Finance/Administration Shareholders – – – – Owners of the company. All profit and value increase accrue to them They elect the Board True for publicly traded or privately traded companies CSC444F'07 Lecture 1 4 Software Vendor Structure Shareholders Board of Directors Executive Team Chief Executive Marketing • Sales Client Services Software Development Finance/Administration Board of Directors – – – – Represent the shareholder’s interests They appoint the officers of the company Will advise the CEO Responsible for company acting lawfully CSC444F'07 Lecture 1 5 Software Vendor Structure Shareholders Board of Directors Executive Team Chief Executive Marketing • Sales Client Services Software Development Finance/Administration Chief Executive Officer – Appointed by the Board – In charge of running the company day-to-day • By coordinating the activities of the Executive Team – Commits to financial targets (revenue growth / profitability) CSC444F'07 Lecture 1 6 Software Vendor Structure Shareholders Board of Directors Executive Team Chief Executive Marketing Sales Client Services Software Development Finance/Administration • Executive Team – – – – VP’s and “C-Level” officers hired and assembled by the CEO In charge of running the company day-to-day Meet regularly to coordinate activities and to set strategy Functional responsibilities + corporate responsibilities CSC444F'07 Lecture 1 7 Marketing Marketing Product Management Marketing Communications Business Development • Product Management – – – – Defining what products/services the company will sell at what price Preparing collateral materials for partners and sales Coordinate the release activities Key area CSC444F'07 Lecture 1 8 Marketing Marketing Product Management Marketing Communications Business Development • Marcomm – Communicating with the external world – Advertising, press releases, - generate “buzz” – Experts not at product (see prod mgmt) but at knowing how to reach people with a message – Lead generation to feed sales pipeline CSC444F'07 Lecture 1 9 Marketing Marketing Product Management Marketing Communications Business Development • BusDev – – – – Developing new business opportunities New channels to market New geographies New partnerships CSC444F'07 Lecture 1 10 Shareholders Board of Directors Executive Team Chief Executive Marketing CSC444F'07 Sales Client Services Lecture 1 Software Development Finance/Administration 11 Sales • Responsible for achieving the revenue number. • Sales models: – High-level direct sales • Identify decision makers with budget, chase them down, negotiate terms, close – Dialing-for-dollars • Dial out to big lists assembled by marketing – Channel sales • Sell indirectly via other organizations • Paid via base + commission – May not be profit based – Therefore need strong sales management CSC444F'07 Lecture 1 12 Sales Process • Sales “pipeline” or “funnel”, E.G., – – – – – Leads Qualified opportunities Short-listed In negotiations Close • Sales management maintains pipeline – Attaches estimated close date, sale value, and probability of close to predict future revenues – Keeps the pipeline filled • Uses a CRM system CSC444F'07 Lecture 1 13 Shareholders Board of Directors Executive Team Chief Executive Marketing CSC444F'07 Sales Client Services Lecture 1 Software Development Finance/Administration 14 Client Services • Pre-sales support – Technical help for the sales group – Implementation project planning pre-sales • Onboarding / Implementation – Ensuring a customer starts using the software • Account Management – Ensuring customers are happy – Mining to see if they need additional software/services • Customer Support – Help desk CSC444F'07 Lecture 1 15 Shareholders Board of Directors Executive Team Chief Executive Marketing CSC444F'07 Sales Client Services Lecture 1 Software Development Finance/Administration 16 Finance & Admin • • The mechanics of establishing and reporting against budgets Spending controls – Purchase requisitions. Purchase orders, signing limits, ... • • Taxes Financing – Leasing arrangements – Cash management – Investments • Funding – IPO’s – Private investments – Investor relations • Administration – Human resources – Office management – Internal IT CSC444F'07 Lecture 1 17 Shareholders Board of Directors Executive Team Chief Executive Marketing CSC444F'07 Sales Client Services Lecture 1 Software Development Finance/Administration 18